EMBASSY OF UKRAINE TO THE UNITED STATES OF AMERICA

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April 8, 1998
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Washington -- An independent, secure, democratic and prosperous Ukraine is a keystone in the architecture of the new Europe, and the United States will continue to support genuine movement towards political and economic reform, said Deputy Secretary of State Strobe Talbott.

Talbott delivered opening remarks April 8 at the Workshop on Ukraine-NATO Relations sponsored by the Harvard University Project on Ukrainian Security and the Stanford-Harvard Preventive Defense Project. The workship was held at the Brookings Institution in Washington.

"As long as Ukraine moves forward with economic and political reform, we will maintain the wide array of programs and initiatives that have made Ukraine the forth largest recipient of American assistance in the world -- and the number one recipient in the former Soviet Union," Talbott said. The United States will also continue with the U.S.-Ukraine Binational Commission, he added, and "we will sustain our effort to help integrate Ukraine more fully into international institutions and structures."

Talbott cited many of Ukraine's accomplishments, such as its peaceful transition to independence, its decision to join the Non-Proliferation Treaty as a non-nuclear-weapons state, its efforts to resolve ethnic differences, and its efforts to reach out "across divides of history and geography to its neighbors, particularly Russia."

However, he stressed the need for additional political and, particularly, economic reform, saying Ukraine "has inhibited its ability to do two things which are, quite simply, vital for its own long-term viability: provide a prospect of prosperity for its own now-enfranchised citizens and integrate with the outside world. These twin disabilities put Ukrainian security itself in jeopardy."

Talbott discussed a wide range of other issues, including Ukraine's "Distinctive Partnership" with NATO; the March 29 parliamentary, municipal and local elections; the future of the Ukrainian Communist Party; and the limits on U.S. aid to Ukraine mandated

by Congress unless there has been "significant progress" on a number of specific disputes involving the entry of U.S. firms into the Ukrainian market by the end of this month.

Following is the text of Talbott's remarks:

THE NEW UKRAINE IN THE NEW EUROPE

An Address by Deputy Secretary of State Strobe Talbott
at the Workshop on Ukraine - NATO Relations
sponsored by
The Harvard University Project on Ukrainian Security
and the Stanford-Harvard Preventive Defense Project
April 8, 1998

Text as delivered

Thank you, Ash [Carter], for that introduction and for the invitation to be with you at the start of this timely and important conference. Thanks also for the privilege of serving with you during the first term. You were a terrific colleague and traveling companion, including on some memorable visits to Kyiv.

Let me also acknowledge a number of friends here, especially on the Ukrainian side. It's always good to see Ambassador [Yuriy] Shcherbak, who frequently comes to my office at the State Department to set me in the right direction. I listen to him with respect and admiration, and I try to do what he tells me to. I'm not sure I always succeed.

I also particularly want to single out my counterpart in the Ministry of Foreign Affairs, Anton Buteyko, and Ambassador Boris Tarasyuk, who has so ably represented Ukraine in Brussels. Anton, Boris and I have logged many hours together, especially back in '93, when, in earlier jobs, we worked together on what became the Trilateral Accord. Ukraine is lucky to have diplomats of their intellect, skill and, I might add, tenacity. The United States is lucky, too, because it's in our interest that Ukraine itself be tenacious in the consolidation of its independence and its security.

Before going any further, let me convey to all of you greetings from Secretary Albright. She is today briefly back in Washington between trips, and she asked me this morning to stress the significance that she attaches to the issues you'll be discussing over the next two days. It was almost exactly a month ago that the Secretary was in Kyiv for what she regarded as a highly productive visit. She believes that the partnership between NATO and Ukraine is vitally important to our effort to help build a Europe that is whole and free, prosperous and at peace for the first time in its history.

The means for achieving that goal, as we see it, are largely institutional -- or, as is often said, architectural. The task of constructing a new Europe requires us to adapt existing structures where possible and to build new ones where necessary. The size, scope, job descriptions and membership lists of these institutions are different, but their missions and their compositions are often overlapping. In some key respects, they are mutually reinforcing. Together, they make up the superstructure of the new Europe.

NATO has a unique role to play in this overall scheme because it alone has military muscle. As we've seen, that particular form of strength is still necessary in post-Cold War Europe. From Bosnia, Croatia, Albania and Kosovo in the Balkans to Chechnya, Nagorno-Karabakh, Abkhazia and South Ossetia in the Caucasus, more Europeans have died violently in the last five years than in the previous forty-five.

Had it not been for NATO's exertion of force in 1995, Bosnia today would still be at war. And, of course, NATO has not acted alone. The Implementation and Stabilization Forces in Bosnia have drawn on the military manpower and resources of partner countries that were, only a decade ago, part of the Warsaw Pact. Ukraine was among the earliest contributors to the peace efforts in Bosnia and Croatia, and it has paid a sad price in the loss of some of its finest young men.

But NATO is not just a military organization; it is also a political one; it is a catalyst for strengthening -- and extending -- the values, the institutions, and the ideas that the member-states have in common: democracy, rule of law, respect for human and civil rights, tolerance of ethnic and religious differences, and civilian control of the military.

NATO has always had that political function and responsibility, including in its old, Cold War incarnation. In the '50s, the Alliance provided the security umbrella under which Germany and France could achieve their historic reconciliation.

Today, NATO fosters integration and cooperation between what we used to think of as East and West. The expansion of NATO has already been a powerful factor in cementing the reconciliation between Germany and Poland.

And the very prospect of NATO membership has encouraged positive, peaceful trends in Central and Eastern Europe. Partly in pursuit of their goal to join NATO, a number of Central European states have intensified their internal reforms and improved their relations with each other. The recent accords between Romania and Hungary are one example. Another is the improvement in relations between Romania and Moldova. And still another is the beginning of negotiations between Romania and Ukraine on the complex issue of exploitation rights on the Black Sea shelf. In fact, all Ukraine's western neighbors have resolved disputes and improved relations with Ukraine and with each other. In that respect, NATO enlargement has already contributed substantially to Ukraine's security.

But for this salutary dynamic to continue, the door that the Alliance leadership opened last July in Madrid must remain open. Were it to be otherwise -- were the door to swing shut behind Hungary, Poland and the Czech Republic, or were it to swing shut behind the second tranche of new members -- the Alliance and its enlargement would not only fail to be a force for integration; it would become the opposite: it would create a new dividing line, a new Iron Curtain, a new gray zone, a new strategic limbo, only further to the East. It would foment among the nations that were excluded mutual suspicion, military competitiveness, insecurity, instability, perhaps even disintegration and violence.

Hence the principle of the open door. The NATO Summit in Madrid last year affirmed that principle, and the NATO Summit here in Washington a year from now will reaffirm it.

A corollary to the open door is the principle that every sovereign state has the right to decide on how it wishes to provide for its own security. That includes the right to decide on its relationship to NATO. Some countries aspire to full membership. Others prefer to remain non-aligned but to cooperate with NATO.

Either way, NATO will respect their decision. The Alliance, of course, has its own say in what sort of relationship it develops with non-member states. But defining that relationship is exclusively a transaction between NATO and the country in question.

No third party has a veto. That principle is enshrined in several bedrock OSCE documents: the Helsinki Final Act of 1975, the Charter of Paris of 1990, and the Budapest Summit Declaration of 1994. And, not incidentally, it was reaffirmed in the NATO-Russia Founding Act signed in Paris last May.

Russia and Ukraine have both said that they do not seek entry into the Alliance at this time. Whatever their future position on this issue, we hope that both governments will see that, in practice as well as in theory, enlargement is not a threat to any non-member of the Alliance; rather, the process reinforces security and stability across the whole of Central Europe. It was aggression and conflict in that region, after all, that drew the Ukrainian and Russian people into two world wars in this century.

Let me be very clear: We respect and accept Ukraine's position that NATO membership is not on its agenda at this time, just as we respect and accept similar positions on the part of Sweden, Finland and other countries. But we also believe that should Ukraine one day decide to seek entry into the Alliance, the door will remain open.

Meanwhile, Ukraine has decided that it wants a Distinctive Partnership with NATO, and NATO has agreed. As several people here know, a lot of work went into the selection of that word "distinctive." Some of us literally thumbed through the thesaurus to make sure we ended up with exactly the right adjective. Part of the task -- strategic as well as semantic -- was to ensure that the NATO-Ukraine relationship had independent, indeed distinctive significance, while taking into account the importance -- to the U.S., to Ukraine, to NATO -- of Russia's own evolving relationship with the Alliance.

This was simply the latest manifestation of a now-familiar challenge -- managing the trilateral, or triangular, relationship among the U.S., Ukraine and Russia. Minister Buteyko, Ambassador Tarasyuk, Ash Carter, Bill Miller, Bob Hunter and I have been working together on that exercise in complex geometry since early in 1993 -- and to good effect, I think.

Under both Presidents Kravchuk and Kuchma, Ukraine has been generally supportive of NATO's effort to reach out to Russia -- and rightly so. After all, it is very much in Ukraine's interest that Russian reform and integration with the West remain on course.

Despite this general and very welcome Ukrainian support for NATO's expanding partnership with Russia, there has been a tendency among some of our Ukrainian friends to compare the particulars of that partnership too directly, and too competitively, with Ukraine's own growing cooperation with the Alliance. President Clinton and his fellow leaders of the Alliance see NATO-Ukraine and NATO-Russia as separate initiatives that are both of vital importance to the Alliance and to the future of Europe. They are committed to letting each relationship take its own shape at its own pace in the months and years ahead.

They are also committed to supporting and encouraging close ties between Ukraine and the Russian Federation. We salute both governments for the impressive progress they have made toward that goal, particularly in the Treaty on Cooperation and Friendship that they signed in May of last year. That breakthrough will help buttress the architecture of the new Europe.

It was not coincidental that Ukraine and Russia signed their treaty the same month that NATO and Russia signed the Founding Act. The Ukraine-Russia Treaty helped establish a solid underpinning for the Madrid Summit in July, at which President Kuchma joined President Clinton and the other 15 Alliance leaders in signing the NATO-Ukraine Charter. In other words, together -- in their sequencing and in their interlocking contents -- the Treaty, the Founding Act and the Charter were a classic example of structurally sound diplomatic and security architecture.

Since Madrid, we've been making good on the promise of the Charter. In December we held the first Ministerial-level meeting in Brussels of the our new consultative forum -- the NATO-Ukraine Commission. Boris Tarasyuk and Bob Hunter were instrumental in getting the Commission up and running. Building on their good work, we've continued to broaden the dialogue between our senior governmental leaders, our ambassadors, our experts, and our military officers. We've also expanded NATO's contact with the Ukrainian people through the Alliance's Information Office in Kyiv, the first such facility in any country inside or outside the Alliance.

During her visit to Kyiv last month, Secretary Albright discussed the growing relationship between NATO and Ukraine in her meetings with President Kuchma and other Ukrainian leaders.

So all in all, we're off to a good start. But we've got to intensify our efforts to translate dialogue -- which, by definition, is mostly talk -- into practical, tangible programs and initiatives that will bring the Alliance and Ukraine closer together in meaningful and mutually beneficial ways. We must move from blueprints to masonry and carpentry.

That's the sort of activity that goes on in a workshop -- and that, appropriately, is what you're calling this conference. I notice from your agenda that the next session is on "making the NATO-Ukraine Charter real," and that the one after that is on Ukraine's role in the Partnership for Peace. I'd suggest that those two topics are closely related, if not identical, because the most immediate and useful thing we can do to make the NATO-Ukraine Charter real is to ensure that Ukraine -- the first former Soviet republic to join PFP in 1994 -- intensifies its participation. I realize that Ukraine wants to move beyond PFP to a new, genuinely "distinctive" level of cooperation, but before that can happen, Ukraine must take full advantage of the opportunities it already has before it.

Just as one example, we hope Ukraine will accept the Alliance's invitation to station a second a Ukrainian officer at the Partnership Coordination Cell at SHAPE. That would allow Ukraine to step up its involvement in joint planning between the Alliance and the Partners on projects like SFOR in Bosnia and NATO-sponsored PFP exercises. There are numerous additional ways in which we can do more and do it faster, which I'm sure Frank Miller, General Krawciw, and Jeff Starr will want to discuss during your workshops.

In the remaining minutes of these remarks, I would like to turn from the purely military dimension of Ukraine's security to the political and economic dimensions, which are no less important and, I'm sorry to say, considerably more difficult.

Walking toward the open door of NATO -- or, for that matter, the EU, the OECD, the WTO or any other of the core institutions that bind together the successful democracies of today's world -- is a daunting challenge for a country as disadvantaged by history as Ukraine. It requires changing the entire shape and direction of society. That means courageous, forward-looking leadership from the top; it means making hard, often painful choices; and it means earning, and maintaining, the support of citizens who have only recently, for the first time in their lives, been empowered with the right to vote in real elections.

One of those elections took place ten days ago, on Sunday, March 29. Nearly 70% of the electorate voted for parliamentary, municipal, and local officeholders. The polling was far from flawless, but international observers have pronounced the preliminary results generally free and fair.

Thus, for the second time since independence, Ukraine has peacefully chosen its political representatives by democratic means. That is a milestone for any young democracy. It's not just the first election but the second and the third and the fourth that begin to make voting a habit -- the breathing in and breathing out of the body politic.

These latest elections also suggest that Ukrainians are dealing with their ethnic and cultural differences through peaceful, democratic means. Exit polls indicate that members of the Russian- and Polish-speaking minorities tended to vote for candidates on the basis of their stand on issues, not on the basis of their ethnicity. This, too, is good news. It helps rebut the prophets of doom who, not long ago, predicted that it would be on the rocks of ethnic separatism that the Ukrainian ship of state would founder.

And so the elections a week and a half ago were a step forward -- albeit a rather wobbly one -- in the process of Ukrainian democratization.

The actual results of the elections, however, are more problematic. Let me offer a few carefully chosen words about those results, mindful that the choices the Ukrainian people made on March 29th were theirs and no one else's to make.

Overall, close to sixty percent of the total vote went to centrist or reformist candidates. But the Communist Party led the balloting in a majority of localities and won the largest bloc of seats in the Verkhovna Rada. Quite clearly, the Communists and a number of other anti-reform parties were successful in tapping into widespread popular discontent with declining living standards and rising corruption and crime.

We in the U.S. Government are continuing to observe and assess the results of the election and its aftermath. As we do that, we are keeping in mind a number of factors. Let me touch upon several.

First, the ability of the Communist Party -- or anyone else -- to turn back the clock is severely limited. Ukraine's continuing need for access to international investment capital and development assistance is stronger than the siren song of a certifiably bankrupt ideology. The GDP has declined by 60% since 1991, and recent risky ventures into international financial markets have further burdened the country with massive short-term debt at high interest rates. Both the International Monetary Fund and the World Bank have made clear that they will withhold further support until Ukraine makes progress on a number of long-postponed economic reforms, particularly the restructuring of the energy and agricultural sectors and the imposition of greater discipline in government spending.

There is another point we should all keep in mind as we assess the election. It is not unheard of for a party, even though it calls itself Communist, to adjust to the realities of the present rather than falling back on the failed policies of the past. For example, in both Lithuania and Poland, the Communist Parties' experience with the responsibilities of governance has transformed them into something like mainstream social democratic parties. And in Hungary, the Socialists -- the successors of the Communist Party -- have implemented the most far-reaching privatization program in the former COMECON space. Moreover, it was the Socialists in Hungary and their confreres (I'll resist saying comrades) in Poland who negotiated their countries' terms of accession for entry into NATO and who paved the way for accession negotiations with the European Union.

Of course, the Ukrainian Communist Party is by no means a clone of those other parties. It exists in different circumstances, and it has its own track record and platform. And those are none too encouraging. The Ukrainian Communists have worked with other so-called leftist parties in the Rada to block many of the reforms that Ukraine needs most. What's more, the Communists' stated policy goals include the reversal of some key elements of Ukraine's privatization program, the partial renationalization of industry and the banking system, and the reconstitution of something that sounds ominously like the Soviet Union.

This doesn't mean that the Communist Party now rules Ukraine. Far from it. It does mean, however, that President Kuchma is faced with the daunting challenge of trying to reunite the fractured political center, even as he works with the Left to get economic reform moving again.

We will do everything we can to help. But we need Ukraine's leaders to help us help them. A particularly important area of concern is the country's openness to foreign investment and international business.

As many of you are aware, our Congress has mandated that unless Secretary Albright can certify by the end of this month that there has been "significant progress" on a number of specific disputes involving the entry of U.S. firms into the Ukrainian market, American assistance to Ukraine will be drastically reduced. We currently have a team in Kyiv reviewing the facts and the trends. I will be honest: last week, Ukraine's senior economic team -- led by Deputy Prime Minister for Economic Reform Tyhypko -- was in Washington, and what we heard from them was not very encouraging.

Let me stress a key point that everyone should keep in mind as the U.S. and Ukraine work together on this issue over the next several weeks: our goal is not only to insure a level playing field for American business in Ukraine; equally important is the need to encourage reforms that will allow Ukraine to attract the foreign investment it so desperately needs.

We are well aware that the Ukrainian economy will not evolve -- or, for that matter, deteriorate -- in a political vacuum. Quite the contrary, Ukrainian democracy faces its next test in 18 months, in the October 1999 presidential election. Politicians from across the political spectrum, in both the legislative and executive branches, may be tempted to defer difficult decisions so that they can say and do things that they believe will earn favor with the voters. To put it bluntly, that is time that Ukraine simply does not have to waste. And we can only hope that elected officials will see that wasting time is bad politics, since a year and a half of finger-pointing, demagogy, empty promises and inaction on economic reform will only make things worse in October of 1999, not better.

So the choice that Ukraine faces today is not really between reform on the one hand and, on the other, a return to what the Communists may have advertised as the good-old-days of the Soviet system; rather, it is a choice between forward movement and stagnation, between developing traction and remaining stuck in a deepening rut.

That brings me back to the principal topic of this conference: Ukraine's security. The interplay between the workings of Ukrainian politics and the Ukrainian economy is very much a security issue, and right now, it is a security vulnerability.

In its foreign policy, Ukraine has moved forward. Many in this room have helped to make that progress possible by steadily improving Ukraine's relations with its neighbors and with the Euro-Atlantic community as a whole. But as a result of what it has done -- and, more to the point, not done -- within its own borders, Ukraine has inhibited its ability to do two things which are, quite simply, vital for its own long-term viability: provide a prospect of prosperity for its own now-enfranchised citizens and integrate with the outside world. These twin disabilities put Ukrainian security itself in jeopardy. That's because Ukraine is not just a new state -- it is in certain respects a fragile one. And the biggest source of its fragility today is an economy that is failing to produce the kind of benefits that people in other post-Communist societies have begun to take for granted and that repels rather than attracts foreign investment.

All this is a very real cause for concern about what lies ahead for Ukraine. But there are reasons for optimism as well. On more than one occasion, the Ukrainian government, with the support of the Ukrainian people, has made courageous, far-reaching choices that have contributed in fundamental ways to their own well-being, to regional stability and to the good of the international community at large. That was true of the peaceful way in which Ukraine gained its independence in 1991. It was true of Ukraine's decision in 1994 to join the Non-Proliferation Treaty as a non-nuclear-weapons state, and more recently it has been true of Ukraine's principled decision to cease all cooperation with Iran's nuclear program. Another cause for gratification and congratulation is the way in which Ukraine has resolved ethnic differences within its borders and reached out across divides of history and geography to its neighbors, particularly Russia.

These achievements -- these examples of national and international good-citizenship -- are reasons for what might be called strategic optimism with regard to Ukraine's future. They are also tangible incentives for the major industrialized democracies to persist in their supportive engagement with Ukraine.

As for the United States, as long as Ukraine moves forward with economic and political reform, we will maintain the wide array of programs and initiatives that have made Ukraine the forth largest recipient of American assistance in the world -- and the number one recipient in the former Soviet Union. We will also continue to provide expertise and ideas through the U.S.-Ukraine Binational Commission led by President Kuchma and Vice President Gore, which has already proved itself as a valuable mechanism for cooperation on a broad range of important issues since it was created just under a year ago.

By the way, the Vice President and President Kuchma had an extremely good telephone conversation earlier today. It was clear that Mr. Kuchma is anything but discouraged. Quite the contrary, he conveyed to the Vice President a determination to meet all the difficulties Ukraine faces -- political and economic -- and to continue leading the country in the right direction.

We will be at Ukraine's side as he does so. We will sustain our effort to help integrate Ukraine more fully into international institutions and structures. That means further collaboration in the Euro-Atlantic Partnership Council and in the OSCE. It means continuing to work with Ukraine toward eventual membership in the World Trade Organization, the Central European Free Trade Area, the European Union, and the OECD. And, of course, we will continue our joint construction project to build a distinctive partnership between Ukraine and NATO.

We will do all that because so much depends on our success helping Ukraine achieve its own best aspirations for itself. That brings me, in conclusion, back to what, for us, is a first principle: an independent, unitary, secure, democratic, prosperous, self-confident, integrated Ukraine is a keystone in the architecture of this new Europe. I borrow that metaphor from Sherm Garnett advisedly, knowing full well (as he does) that the keystone keeps in place the arch in architecture; if the keystone crumbles, the structure collapses. We cannot let that happen -- for Ukraine's sake, or for our own.

Thank you very much.