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6 July 1998
For immediate release
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Statement By Mr. Tarasyuk, Foreign Minister Of Ukraine

National Press Club
Washington, DC, July 6, 1998

With this press conference allow me to strengthen the tradition that has developed over the past seven years. It was customary for my predecessors to address this esteemed audience at the National Press Club. Years go by, new faces appear in this room, yet the warmth and enthusiasm of this audience are still here. And another thing remains unchanged -- that is the main direction of the foreign policy of Ukraine, and I see it as a guarantee of the Ukrainian-American strategic partnership.

Today I would like to share some of my thoughts on several most important issues for Ukraine, in particular its foreign policy. The top priority of foreign policy of any country is a reliable and prosperous economic background. Successful economy and democratic environment ensure foreign policy’s efficiency and effectiveness.

I should say that in the last few years Ukraine has achieved great progress, the scope of which is almost impossible to comprehend without taking into account its recent past. Following the adoption of Constitution, we took steps to affirm civil society, passed a new democratic election law, and enjoyed good human rights records.

We brought inflation under control. We introduced a new currency and managed to maintain it stable. Progress was made during the past year in privatizing businesses, in improving market mechanisms and in ensuring the historic transfer of collective farmlands to private ownership. In fact, privatized enterprises produced more than 51% of total industrial output in 1997 with 38% of Ukraine’s labor force employed in the private sector. This helped industrial output and GDP, for the first time during transition to a market economy, to have a positive trend.

Especially drastic and impressive were the changes in Ukraine’s economic performance during recent months. It has given the IMF grounds to seriously consider the granting of the three year Extended Funding Facility loan to Ukraine.

The investment climate in Ukraine has become more business-friendly, and in 1997 Ukraine attracted an additional 760 million USD in foreign investments. The United States remains the largest foreign investor  in Ukraine, with 332.6 million dollars invested overall.  In Ukraine today, over 250 American companies operate. Well-known companies such as Coca-Cola, Monsanto, Cargill have successful business there. We import agricultural machinery from John Deere and Case, which assist Ukrainian producers in setting up the production phase and maintenance. General Motors has recently announced its plan to assemble 20,000 cars on Ukrainian soil. This is to name but a few examples. However, it would be unrealistic to say that American investors have no problems in Ukraine, which is undergoing such critical transition. Ukraine recognizes the existence of disputes, and is working to settle them in a constructive and civilized manner.

Creation of political support for market reforms is one of the urgent priorities for the Ukrainian government. Cooperation with the US, its support and assistance, particularly, in Ukraine’s aspirations to integrate into European and Euro-Atlantic structure, its bids to join GATT/WTO, as well as Ukraine’s cooperation with international financial institutions, can hardly be underestimated.

The talks that I will have today and tomorrow at the Department of State, White House and on Capitol Hill will allow both sides to further explore the possibilities to enhance and diversify Ukrainian-American strategic partnership, to materialize our mutual aspirations, including in economic area.

During recent months we managed to open up new avenues for Ukrainian-American cooperation, particularly in the fields of nuclear energy and space exploration. It was a logical development that the US supported Ukraine in joining  MTCR, and the two sides reached an agreement on nuclear cooperation.

Now the time has come to back up these agreements with practical action. We are looking forward that the agreed projects will be carried out, particularly as far as the Kharkiv initiative is concerned. During my visit, we will discuss the conclusions made by the US officials, who visited Kharkiv last June. I am certain, they came up with some ideas which will be translated into an arrangement to be reached as a result of the discussions of President L. Kuchma and Vice-President Al Gore when they meet in Kyiv on July 22-23. We hope that these projects will be technologically and financially adequate to the region's potential.

During my meetings with Secretary M. Albright,  and with Secretary W. Cohen on the eve of the second session of the Kuchma-Gore Binational Commission, we will address a wide range of topics on the Ukraine-US agenda, most specifically, our cooperation in the area of security and nonproliferation. We will discuss the ways to correct the dangerous situation resulting from recent nuclear tests in Southern Asia, and to assure the viability of the NPT regime. Ukrainian delegation is preparing serious proposals for consideration of the first meeting of experts of the Special Task Force on non-proliferation.

We will also address some issues of our trade and economic cooperation, particularly, in implementation of Ukrainian project of Caspian oil transportation. This project provides the shortest way for Caspian oil to the European markets. It is environment-friendly, politically secure and consistent with the policy of ensuring multiple pipelines routs for Caspian oil delivery to the markets. The Ukrainian project does not compete with the Baku-Jeyhan route. It rather complements it.

This week has become a vivid proof of intensity and productivity of Ukrainian-American dialogue. Just a few days ago the first meeting of the Law Enforcement Working group held in Washington revealed a constructive approach and strong will of the two sides to join their efforts in combating such international calamities with national implications as money laundering and corruption, drug trafficking and trafficking in women and children. They confirmed mutual resolve to sign in the next weeks the Mutual Legal Assistance Agreement and explore the possibilities to establish an Operational Strike Force to combat organized crime.

On July 8, an interim meeting of the Committee on Sustainable Economic Cooperation will be held in Washington, followed by a regular session of the Committee on Trade and Investment. Ukrainian and US officials will have open discussions on how to improve the investment climate in Ukraine and create a favorable environment for businesses, which ultimately will promote our economic growth. They will also address a very important issue of facilitating access of Ukrainian goods to the US markets that is essential for building-up a market economy in Ukraine. It is also very important for strengthening economic growth we have registered in January-May for the first time since our independence.

I think, there are not so many countries in the world that keep such intensive political dialogue at the highest level as we do. The second session of the Ukraine-US Binational Commission Kuchma-Gore will become a visible embodiment of the idea of a Ukrainian-American strategic partnership. I am happy, that our strategic partnership, founded on mutual respect, shared hopes and values, is very strong. We enjoyed a constructive dialogue that helped to solve many a problem in our bilateral relations, and fostered better understanding and interaction between our Governments and peoples. I strongly believe that the cooperation with the US has been crucial in consolidating Ukraine as a stable, democratic, viable partner and ally of the United States, strategically located between Central Europe and Russia.

One of the main problems that Ukraine faced several years ago was to secure its place in the world and to assure friendly external environment for its economic and democratic transformations. For this purpose President L.Kuchma put forward as our strategic foreign policy course integration into European and Euro-Atlantic structures together with developing and consolidating friendly relations with our immediate neighbors, first of all Russia. I would like to emphasize that a special aspect of Ukraine's foreign policy has always been a build up of mutually beneficial, balanced and good neighborly relations with Russia. Russian direction is important for foreign policy of any European nation and for such a player of global scope as the US. Moreover, in this connection, the latest economic and financial turmoils in Russia, could not but alarm all of us.

As to Ukrainian-Russian relationship, I would like to say that recently we have been successful in resolving numerous delicate issues. Most notably, we have signed the major political treaty which fixed mutual recognition of  territorial integrity of both nations. In the earlier years of our independence, almost 50% of all exports went to Russia. Such  dependence on the market of one nation, although a friendly one, is unlikely to strengthen anyone’s national security. Now, the Russian share of Ukrainian exports dropped to 24%. A big difference. Simultaneously, our exports to Western and Central Europe, as well as  to Asia and America, have grown. Such reorientation has occurred not without Russia’s assistance, since it introduced numerous quotas for Ukrainian commodities. Russia even introduced double taxation of Ukrainian goods that has not been applied to any other country. As a result in 1997 alone trade dropped in $ 3 bln.

I would like to stress that when I am talking about reduction of exports to Russia, I am not speaking about some senseless and artificial blockage of economic relations with this country. In this room, I think, all are pragmatics, and hardly there is anybody here who would cut a tree that brings fruit. We are talking about essential issues of national security and diversification of trade relations that were economically unjustified before due to cost, tariffs, licensing, etc.

Therefore, we are actively developing industrial cooperation with Russia, in those areas where combining our efforts is essential and productive. Say, the establishment of potentially beneficial joint ventures in the aero- and outer-space, oil and gas industries. Examples include the coproduction of aircraft engines, implementation of joint project to manufacture Antonov-70 aircraft, which could become a basis for a future large aircraft of the 21st century, joint manufacturing of Tupolev-334 aircraft, tractor equipment, buses, and possibly joint exploration of oil and gas fields in the Black Sea and Sea of Azov. With this positive economic background, finally, there is some progress in the solution of the problem which the Russian side for a long time has refused to settle. I mean the process of delimitation of our borders with Russia. We are not going to erect another Berlin Wall but a civilized border. Transparent for law-abiding people but obstacle to illegal migration, drug and arms trafficking under strict control.

Another aspect of our foreign policy, that I mentioned earlier, is Ukraine’s integration into European and trans-Atlantic structures. This direction was declared by President of Ukraine as of strategic priority. This is the basis of our foreign policy.

Ukraine views the existing trans-Atlantic and European political, economic and security structures, such as NATO, the European Union, OSCE, Council of Europe, as essential and crucial ones with regards to ensuring stability and security in Europe. Ukraine was one of the first countries in Central and Eastern Europe to welcome enlargement of the European Union and NATO, specifically, the "NATO open door" policy. The very process of admitting new members to these organizations is viewed by Ukraine as extension of the zone of stability, democracy, and prosperity on the European continent.

At the same time, we could not but notice, and Ukraine is not alone in this, some adverse implications of the EU enlargement that should be avoided. We can easily foresee the worsening of the bilateral cooperation in economic, humanitarian and other areas between the new members and their neighboring nations in Central and Eastern Europe not included in the first wave of the enlargement process. Drastic changes in the current trade, customs, and visa regulations on the bilateral level will lead to worsening of economic situation in the countries left outside the EU. The gap between the level of involvement of different countries into European integration process will widen, and it is already resulting in emergence new dividing lines in Europe, and appearance of new threats to its stability and security.

Ukraine is highly sensitive to the dangers that I have just mentioned. Moreover, some of our partners in Europe, strange as it is, are still inclined to view Ukraine as everything but not Central and Eastern European nation. It would be ridiculous to claim, as some do, that growing cooperation of Ukraine with EU, and its further admission, will create problems for the Union, while admission of other CEE countries will not.

Well, let me say that any new member in the family does create problems, but are there any parent who would not desire a child only because he or she will lose some sleep? Every child is dear to his parents, every European nation, including Ukraine, is dear to our old continent. We do our best to convince our counterparts in Brussels. I wish our problems were not irrelevant to you. We absolutely welcome our Romanian, Bulgarian and other neighbors’ admission to the  EU. And the sooner the better. While they are supporting us, for we are one, we are the Central and Eastern Europe.

I am perfectly aware that Ukraine must cover its part of the road towards the united Europe on its own. However, how can you move ahead if the gate in front is closed, and you don’t know whether it will be opened before you?

Recently, the Ukrainian delegation headed by Prime Minister V. Pustovoitenko has presented at the first session of the Ukraine-EU Cooperation Council in Luxembourg, our vision of the rapid Ukraine’s integration into the Union. Simultaneously we made an official request for association status and following EU membership. We hope to hear a positive reply during the Ukraine-EU summit, to be held next October in Vienna.

I am speaking about European affairs in America, not only because USA was traditionally and integrally involved in finding the ways to resolve all major European problems. As experience has shown, the US, located away from Europe and having the ability to develop its full vision, is often capable of understanding European problems better and deeper than some Europeans.

Ukraine, on its part, further promote its traditionally active and consolidating role in the region. Recently, such approach has found its materialization during the Yalta summit when a new international Organization of Black Sea Economic Co-operation was established. Further development of Ukraine’s regional key role was demonstrated at Kyiv round of consultations on confidence building measures in the Black Sea region.

In order to have a more comprehensive discussion of the whole range of regional problems Ukraine has proposed to host the summit conference of the Baltic and Black Sea nations. The leaders of a dozen of countries of the region, parliamentarians and scholars who will gather in Crimea in September of 1999, will discuss cooperation of the Black Sea and Baltic states, specifically, how to create united Europe without dividing lines.

The stability and security of our region and of Europe as a whole to a large extent depend upon the political and economic stability of Ukraine. By supporting and assisting Ukraine, the US ensures a more stable and prosperous Europe. By helping Ukraine, it invests in the peaceful future of the world.


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