The Association Council Agreement signed between the Republic of Turkey and the Turkish Republic of Northern Cyprus on 6 August 1997 envisaged the establishment, on the basis of sovereign equality and partnership, of an Association Council in order to determine the measures aimed at deepening the existing cooperation and solidarity between the two countries in fields of foreign policy, security, defence, economy and finance to advise their governments on the implementation of these measures and to monitor their implementation. The Association Council, established within the framework of this Agreement, held its first meeting in Ankara on 31 March 1998.

The following delegations participated in the Association Council meeting on behalf on the Governments and the Parliaments of the two countries:

Republic of Turkey:

H.E. Prof. Dr. Şükrü Gürel Minister of State

H.E. Mr. Güneş Taner Minister of State

H.E. Mr. Işın Çelebi Minister of State

H.E. Mr. İsmail Cem Minister of Foreign Affairs

H.E. Mr. Necdet Menzir Minister of Transport

Mr. Mümtaz Soysal Member of Parliament

Mr. Demir Berberoğlu Member of Parliament

Mr. Algan Hacaloğlu Member of Parliament

Mr. Hüseyin Arı Member of Parliament

Mr. Ünal Erkan Member of Parliament

Turkish Republic of Northern Cyprus:

H.E. Mr. Taner Etkin Minister of Foreign Affairs and

Defence

H.E. Mr. Salih Coşar Minister of Finance

H.E. Mr. Erdal Onurhan Minister of Economy

H.E. Mr. İlkay Kamil Minister of Interior and Rural

Affairs

H.E. Mr. Mehmet Bayrak Minister of Communication and Works

Mr. Onur Borman Member of Parliament

Mr. Kenan Atakol Member of Parliament

Mr. İrsen Küçük Member of Parliament

Mr. Hüseyin Celal Member of Parliament

Mr. Mehmet Emin Karagil Member of Parliament

At the Association Council meeting,the parties reviewed the recent developments pertaining to the Cyprus question; exchanged views on the joint approach to be adopted; determined the measures to be taken for the deepening of their partnership relations, and decided on the following:

1. The policy of tension and escalation pursued by the joint Greek-Greek Cypriot front continues to threaten peace, stability and security in the island of Cyprus and in the Eastern Mediterranean. In this context, the massive arms-build-up, the construction of air force and naval bases and the planned deployment of missiles on the island have had a serious destructive effect on regional stability. The integration process concluded between the Greek Cypriot administration of Southern Cyprus and Greece in the military and economic field, is being finalized today in the political field as well with the commencement of the accession negotiations between the European Union and the Greek Cypriot administration.
2. The opening, by the European Union, of accession negotiations with the Greek Cypriot administration in spite of the 1960 Agreements concerning Cyprus constitutes a serious violation of international law. With this approach, the European Union is making a historic mistake by destroying the very basis of the existence of two peoples with equal, political and legal status, on which the independence of the island is based upon. By leading to the virtual integration of South Cyprus with Greece, the European Union will bear the heavy responsibility of a permanent division of the island. The European Union does not have the right to make one-sided decisions and to create obligations regarding the future of the island of Cyprus and to destroy the existing balance between Turkey and Greece in the region. Turkey and the TRNC will not accept the legal, political and economic consequences that may arise for the island of Cyprus as a result of the EU's opening of accession negotiations with the Greek Cypriot administration.
3. In the face of these grave developments,Turkey and the TRNC will continue to be the guardians of peace and stability in the region. As a Guarantor country, Turkey, under all circumstances, will continue to protect its rights and interests over Cyprus which emanate from international treaties, and to fulfill its legal obligations towards the TRNC and the Turkish Cypriot people.
4. The EU's interference with the Cyprus question; at the instigation of Greece;has reached an unacceptable level with the decision taken by the EU at the Luxembourg Summit, and the commencement of the accession negotiations has completely changed the nature of the Cyprus question. As a result, the previously envisaged framework and parameters of a solution have been destroyed as a result of pressure and threats by the Greek/ Greek Cypriot front and due to the EU's unabated interferences.
5. In the face of these developments which threaten peace and stability in Cyprus, the primary aim should be to secure the peaceful co-existence of the two states, side-by-side by solving their fundamental differences. The Turkish Republic of Northern Cyprus is the cornerstone of peace in the island and in the region. Turkey and the TRNC are determined to continue with their peaceful approach. Within this framework, we support the peaceful and constructive proposals of the President of the Turkish Republic of Northern Cyprus. H.E. Mr. Rauf R. Denktaş, which have been communicated to the Greek Cypriot administration of Southern Cyprus on 6 March 1998 and consider these proposals as an important opportunity in the search for a peaceful solution in Cyprus. Unless the existence of two separate people, democracies and states in the island is recognized it will not be possible to make any progress towards a joint solution in Cyprus.
6. The Association Council has decided to take the following steps in order to deepen the existing special relationship between the two countries, in the political, economic, educational and cultural and defense fields.

6.1. Until the TRNC takes its rightful place in the international community as a sovereign and democratic state, Turkey and the TRNC will continue their joint efforts aimed at removing the restrictive measures being imposed on the TRNC internationally, and enabling the TRNC to freely enter into political, economic, cultural and sportive relations with all countries. All the necessary steps will be taken for the integration of the TRNC with the international community. The steps to be taken towards this end will be discussed and decided upon within the context of the Permanent Political Consulting mechanism established between the respective Foreign Ministries of the two countries.

6.2. Bearing in mind the necessity of protecting in stages, the developing sectors of the TRNC economy, it has been decided to establish a joint economic zone between the two countries with the main objective of providing for the free flow of goods, services and capital, transfer of technology and free flow of investment within the framework of the harmonization of customs and free trade conditions.

Towards this end, the parties will advise their respective Governments to make the necessary legal and technical arrangements in order to realize the objectives set out in the Guarantee for Investments Agreement, Agreement of State Aid to Investments and the Agreement on Cooperation in Trade and Economy, signed between the two countries.

Within the context of the Association Council, a Joint Economic Committee is established with the aim determining joint economic and financial policies and developing a strategy for development and progress and laying out regional plans within the framework of Joint Economic Zone. In this connection:

• The economic relations between the two countries will be developed as necessitated by the Joint Economic Zone, and the harmonization process will be completed within two months upon the entry into force of the Agreement on Cooperation in Trade and Economy.
• The existing cooperation in the fields of tourism, education, transport, communication, energy, agriculture, industry, trade, investment, credit-financing and money-banking, will be improved in line with this objective.
• With the aim of accelerating the development of the tourism sector in the TRNC means will be enhanced to overcome problems in the field of transportation and marketing.
• Real and legal persons in Turkey and the TRNC who wish to make investments in the latter, will equally benefit from the incentives available for Turkey's priority regions of development.
• Projects to transport water from Turkey by sea surface and through a pipeline, which are of paramount importance for the socio-economic development of the TRNC, will be completed as soon as possible.

6.3. The existing close cooperation between the two countries in the fields of culture and education, including higher education, will be improved and further deepened. A Joint Committee is established to this end.

The Association Council will continue to carry out its functions with determination to protect the interests of the two countries. The Association Council will hold its next meeting in the TRNC within a three month period.