The trade sector contributes considerably to the economic growth of the island. Due to its small domestic market and the open nature of its economy, access to international markets is of utmost importance. Because of its location, Cyprus has always had strong economic ties with other countries.
As a result, trade has always played a crucial role in the development of the economy. Cyprus’ accession to the EU represents a turning point, which has affected Cyprus’ international trade, fostering exports as a driving force in the economy. This was developed even further with Cyprus’ adoption of the euro on 1 January 2008. With regard to the commodity structure of Cyprus exports, manufactured products account for 69%, agricultural products (raw and processed) for 31%. The European Union is Cyprus’ most important trading partner. In 2012, domestic exports to the EU reached around 51.6% of domestic exports, mainly to the UK (13.7%), Greece (11%) and Italy (5.6%). In addition, 16.2% of total exports went to Near and Middle Eastern countries, and 9.5% to other Asian countries.
In 2012, domestic exports reached the amount of €645.3m showing an increase of 3.1% from the previous year. The main products exported from Cyprus in 2012 were pharmaceuticals with a share of 25.1% of total domestic exports and dairy products (10% of the total).