N Cyprus trade deal sparks concern

The two communities have been divided since 1974

Turkey and the Turkish Cypriot leadership in northern Cyprus have signed a trade agreement that could lead to tension between Ankara and the European Union.

The accord removes trade obstacles to allow goods from the breakaway Turkish Cypriot territory to reach foreign markets via Turkey.

The Northern Cyprus administration is only recognised by Turkey, which means its goods are in effect embargoed internationally.

Analysts say the agreement could strain relationship with the European Union and hamper reunification talks on their divided island.

Under the deal, Turkey and the Turkish Cypriots - which already have a common currency - pledged to reduce port and airport taxes. Turkey would also encourage foreign investments in northern Cyprus.

Turkish Deputy Prime Minister Abdullatif Sener said the agreement would integrate northern Cyprus with Europe and the whole world.

However a spokesman for the Greek Cypriot government called the deal "illegal and a provocation for Europe and the international community".

Stalemate

The European Union expressed regret that it was not consulted before the agreement was signed on Friday.

"We will clearly be checking it with regard to all the associations and customs agreements that we have with Turkey," EU spokesman Eric Mamer told Reuters news agency.

Turkey has its own customs agreement with the EU - which it hopes to join.

The Greek Cypriot south - which is considered outside Turkey as the legitimate government of Cyprus - is due to join the EU next year.

Talks to reunite the island are stalled.