MGR: Can you give us an overview of the current economic, diplomatic, and cultural relations between Cyprus and the UK?
Rafti: Cyprus and the United Kingdom enjoy a long, rich and multifaceted relationship. Our historic ties are evident in the deep connections that exist at all levels of our societies and governments. People-to-people contacts, our respective diasporas -a very large Cypriot community in the UK and around 70 thousand British residents in Cyprus- and the plethora of areas within which cooperation is pursued, form the foundation for the evolving partnership between our countries.
Within the framework of the Commonwealth, the United Kingdom and Cyprus share a historic bond, which binds them as well to the other 54 members of the Commonwealth family, working under the same umbrella on matters of huge significance, like sustainable development, climate change, the rule of law and sustainable governance and so many other priorities that form part of the Global Agenda. The Republic of Cyprus remains vastly appreciative of the Commonwealth family’s unequivocal, steadfast and continued support for its sovereignty, independence, territorial integrity and unity.
In the economic field, the relationship between Cyprus and the UK has historically been very close. Tourism and trade deserve to be singled out as key sectors of economic activity between the two countries. Cyprus has traditionally been an important tourist destination for the UK despite a somewhat downward trend recently, as a result both of Brexit and the effects of the pandemic.
The UK is also a significant trading partner for Cyprus with imports of goods from the UK averaging 6.9% of the total volume and exports of goods to the UK averaging 7.6% in the period 2010-2021.
A number of bilateral agreements create a framework that facilitates economic cooperation, fiscal stability and transparency in the relations between the two countries. This framework is also being updated and enriched when necessary, and we can mention in this regard the amendment of the Double Taxation Agreement in March 2018, concerning the taxation of pensions.
In the field of education, our ties are very strong as the UK is the second most popular destination for Cypriot students abroad, a reflection of our historical ties and the widespread knowledge of English by Cypriots. We note the extensive collaboration between Cypriot and British academic and cultural institutions (Cyprus Institute with Cambridge University, KIOS research center with Imperial), TNE programs and the operation of branches of British universities in Cyprus (UCLAN). We note, however, the decline of the number of Cypriot students at British universities due to increased fees as a result of Brexit. It is important that we jointly explore ways to facilitate the mobility of Cypriot students to the UK as no program has been established, as of yet, to replace ERASMUS.
Our cooperation in the field of culture is rich and varied The Cyprus High Commission hosts a large number of cultural events and activities, catering not only to the Cypriot community in the UK but also promoting cultural relations between the two countries and the Commonwealth.
Partnerships with museums, universities, and galleries have multiple and mutually beneficial outcomes.
Cypriot artists and cultural products have featured in the biggest festivals in the UK, including the Raindance Film Festival, London Design Festival, London Festival of Architecture, London Book Fair, and Glasgow International, among others. A very close collaboration exists with the Royal Commonwealth Society and with the Commonwealth Foundation. In 2019 a Cypriot writer, Konstantia Soteriou, won the Commonwealth Short Story Prize whilst this year during the celebrations for the Commonwealth Day at Westminster Abbey, Amalgamation Choir, a Cypriot women’s acapella choir, performed with great success.
We witness also a close collaboration between the Cypriot Department of Antiquities and British museums in the areas of history and archaeology. The Leventis Foundation sponsors the three main galleries of Cypriot antiquities in the UK Museums, in the British Museum, the Ashmolean Museum and the Fitzwilliam Museum. Cypriot history and archaeology is also taught or researched in major British Universities.
As in the field of education, Brexit has presented a number of challenges with regard to the mobility of artists and cultural goods, as we note in this case as well the absence of a framework for the transfer of goods.
MGR: What initiatives or programs have the Ministry of Foreign Affairs implemented to enhance the economic ties between Cyprus and the UK?
Rafti: The signature in November 2022 of a Memorandum of Understanding on Establishing a Strategic Framework of Cooperation between the United Kingdom and Cyprus, by the Foreign Secretary of the United Kingdom and the Foreign Minister of Cyprus, can serve as the foundation for our evolving partnership following the United Kingdom’s exit from the European Union. This Memorandum can steer our cooperation in ways that safeguard the United Kingdom’s and the Republic of Cyprus’ shared interests in Europe, the Commonwealth and globally. It concerns our deep cooperation that spans the whole spectrum of policy areas, from foreign policy to security and defense, to education and culture, science and innovation, trade and tourism, and the environment. Through this engagement, we can continue and further foster tangible cooperation initiatives and people-to-people contacts, enable exchanges between civil society and encourage the transfer of know-how and expertise.
Additionally, the MoU on non-military development in the British bases in Cyprus signed last year, is an important achievement for both countries with real impact on the day-to-day lives of the local population.
MGR: How does Cyprus view the UK’s role in the Eastern Mediterranean region, particularly with regard to energy exploration and security?
Rafti: In light of the Russian invasion in Ukraine and its impact on Europe’s energy security, the Eastern Mediterranean can play a significant role in addressing the current energy crisis. Cyprus proceeded in developing its own natural gas resources, attracting the interest of several major oil and gas companies, including Shell. Cyprus, pursuing a policy based on promoting regional cooperation, has managed to establish an attractive business environment based on the rule of law. The energy sector is an area of cooperation that more can be done between Cyprus and the UK. Considering the special relationship between the two countries, Cyprus would welcome the participation of more British companies in tenders with regard to energy projects in the future. Maintaining stability and security in the Eastern Mediterranean is a prerequisite for the development of any initiative for cooperation and energy planning. Cyprus, as a pillar of stability and progress in the region and a trusted partner, can provide an alternative and reliable energy corridor from the Eastern Mediterranean to Europe. Given our shared strategic interests in the region, in addition of being both island states, we can jointly work to advocate respect for international law, including the law of the sea.
MGR: How has Brexit affected the relationship between Cyprus and the UK, particularly in terms of trade and investment?
Rafti: Unavoidably, the exit of the UK from the E.U. and subsequently from the European single market, has resulted in reduced trade between the two sides, including the trade relations between Cyprus and the UK, at least in the short term. Going forward, the Comprehensive Trade and Cooperation Agreement signed between the E.U. and the UK after Brexit, can provide specific opportunities and serves as a solid basis for preserving our longstanding friendship and cooperation. Further cooperation could be promoted between the two countries, with a view to further expanding our trade relations, whilst respecting the provisions of the Withdrawal and Trade and Cooperation Agreement.
MGR: What role do you see Cyprus playing in the broader context of EU-UK relations, particularly as the UK establishes new relationships outside of the EU?
Rafti: The Republic of Cyprus, as a member state of the European Union, has a significant role to play in the broader context of EU-UK relations. Cyprus is strategically located at the crossroads of Europe, Africa, and the Middle East, making it an important player in the region. As such, it can serve as a crucial gateway for the UK to access and engage with these regions. Cyprus has the will to play a constructive role in strengthening EU-UK relations and as the UK seeks to establish new relationships outside of the EU, it would be beneficial for both parties to engage so that Cyprus can leverage its strategic location, historical ties, and diplomatic efforts for their mutual benefit.
MGR: What future opportunities do you see for further collaboration and partnership between Cyprus and the UK in the areas of trade and investment?
Rafti: There is significant potential in further expanding the trade and investment relationship between our countries. There is room for further collaboration in the sectors of health, education, financial services and hospitality. There is also room for improved relations in trade, in terms of both goods and services. In the area of exports of goods, Cyprus can increase the exports of dairy products and especially traditional Cypriot products with Protected Designation of Origin such as halloumi, and also in pharmaceuticals. In the services sector, tourism presents significant potential, namely through the development of new tourist products such as agrotourism, gastronomy, cultural, athletic and medical tourism
In terms of facilitating post-BREXIT trade, a possible way to facilitate trade affected by barriers, border issues, and VAT problems, is to register new companies within the EU, through which UK companies can trade goods and services. Moving operations in part to an EU member state presents tax advantages. For those UK businesses considering establishing a foothold in the EU, Cyprus is not simply a viable but rather a very attractive option, given the high standard of living, good weather, and the widespread use of English in Cyprus.