1994: THE YEAR IN REVIEW: Ukraine's presidents in the United States (12/25/94)

1994: THE YEAR IN REVIEW

Ukraine's presidents in the United States

During 1994 the Clinton administration shifted from its earlier policy of alienating a nuclear Ukraine to the United States playing broker to the Tripartite Agreement of January 14 between Ukraine, Russia and the U.S., cajoling Ukraine along the path of economic reform with the promise of expanded U.S. assistance, and hosting Ukraine's two presidents to official Washington visits.

With Ukraine committed to disarming its nuclear arsenal, President Leonid Kravchuk, prior to his departure to Washington for a March 3-5 official working visit to reap the rewards, told a press conference, "This visit will become the turning point in relations between the United States and Ukraine." President Kravchuk, independent Ukraine's first leader, is the former Communist Party ideologue turned nationalist whose administration had focused largely on establishing a Ukrainian identity independent of the Soviet Union.

On March 4 U.S. President Bill Clinton announced at a joint press conference at the White House that the United States would expand its assistance package to Ukraine to $700 million through 1995. Half of the $700 million was Nunn-Lugar funds allocated for dismantling Ukraine's nuclear weapons, $175 million of which was promised to Ukraine in May 1993.

In a Joint Statement on the Development of U.S.-Ukrainian Friendship and Cooperation signed by Presidents Kravchuk and Clinton, the United States affirmed the importance of Ukraine's "sovereignty, independence and territorial integrity" and stated that it and "other nations are prepared to extend, in the form of a multilateral document, security assurances to Ukraine once the START 1 Treaty enters into force and Ukraine becomes a non-nuclear-weapon state party to the Nuclear Non-Proliferation Treaty."

It was Ukraine's no-nonsense second president, Leonid Kuchma, however, who pushed ratification of the NPT through the Ukrainian Parliament and received the promised security assurances from the United States, Russia and Great Britain on December 5.

During President Kravchuk's official working visit, the seed for Ukraine's economic reform was planted by the Clinton administration. The United States extended Generalized System of Preference (GSP) status to Ukraine, which provided the former Soviet republic with duty-free access into the U.S. market for 4,400 products, and supported Ukraine's interest in applying for GATT membership.

The two countries agreed to establish a special Bilateral Commission on Trade and Investment to expand commercial relations, co-chaired by Commerce Secretary Ronald Brown and Foreign Economic Relations Minister Serhiy Osyka, which held its inaugural meeting during the November 21-23 official state visit of President Kuchma.

Presidents Kravchuk and Clinton signed an Avoidance of Double Taxation Treaty and a Bilateral Investment Treaty, which provides comprehensive protection for investors in Ukraine, but stipulated that the agreements needed to be accompanied by administrative, tax, regulatory and legislative changes in Ukraine to improve the over-all climate for investment and to provide the necessary security and stability that investors seek.

In addition, the U.S.'s expanded economic assistance to Ukraine of $350 million, double the amount promised in January by President Clinton in Kyyiv, hinged on Ukraine proceeding with its reform process and stipulated that full disbursement of assistance was contingent on Ukraine taking concrete steps toward economic reform.

A Joint Statement on Economic and Commercial Cooperation signed by Presidents Kravchuk and Clinton specifically addressed this issue and noted that "The United States and Ukraine acknowledge, however, that before the full potential of their trade and economic cooperation can be realized, Ukraine must intensify adoption of a free-market system, including such elements as a dynamic private sector, the freeing of prices, and a fully convertible currency."

Much of the assistance the U.S. committed to Ukraine was not disbursed following the March meeting, as President Kravchuk was unable to push through economic reform.

The United States also stated that it was "prepared to exercise leadership within the G-7 to mobilize additional, multilateral assistance to support a comprehensive reform program." The pledge bore fruit.

The United States was instrumental in mobilizing a G-7 assistance package in Naples in July, an IMF recovery plan released in Madrid in September, and another G-7 assistance plan pledged in Winnipeg in October. The U.S. also negotiated a debt deferral program between Russia and Ukraine, and a rescheduled payment plan between Ukraine and Turkmenistan.

"We have emerged on a new and very clear path. Relations between Ukraine and the United States are now those of two friendly countries with similar strategic concerns," said President Kravchuk of his official working visit.

Mr. Kravchuk also said the process of denuclearization will help facilitate the process of economic transformation. "When we eliminate all the nuclear weapons in Ukraine, we will be getting rid of financial obligations associated with them, and will open the doors for Western reform programs to come to Ukraine. But I would like to state that the process of nuclear disarmament in Ukraine is not directly linked with economic reforms in Ukraine. We have always treated this problem in relation to security guarantees, so when we talk about linkage, we mean the probable consequences of the processes," he explained.

When President Kuchma arrived in Washington for his November 21-23 official state visit, he came armed with Parliament's accession to the NPT and a radical economic reform program for Ukraine. "We have observed what influence the United States has on other countries' relations with Ukraine, and this has been both positive and negative," President Kuchma told a press conference prior to his departure.

President Clinton repeatedly praised Mr. Kuchma during the pre-Thanksgiving summit for resolving Ukraine's nuclear future and reforming its stagnant economy. In light of Ukraine's accession to the NPT, President Clinton announced at a joint press conference at the Old Executive Office Building on November 22 that the United States, Russia and Great Britain would provide Ukraine with security assurances on December 5 and that the U.S. will expand military relations and increase aerospace cooperation with Ukraine.

The United States expanded aid to Ukraine for a second time in 1994 by $200 million during President Kuchma's visit. While half of the assistance is targeted for technical and economic support, the other half comprised balance-of-payment support intended to help Ukraine cover its external financing requirements over the next several months as it implements International Monetary Fund and World Bank reforms. No other newly independent state has been accorded balance-of-payment support from the United States.

A Charter for American-Ukrainian Partnership, Friendship and Cooperation, signed by Presidents Kuchma and Clinton on November 22, reiterated U.S. support for the independence and territorial integrity of Ukraine and Ukraine's commitment to democracy and market reform. In it, the United States emphasized its willingness to provide financial and political support for Ukrainian reforms, both bilaterally and through international financial institutions.

Economic relations between Ukraine and the United States were further expanded during President Kuchma's state visit, with the signing of a Joint Statement on Expansion of Trade and Investment by Foreign Economic Relations Minister Osyka and Commerce Secretary Brown. The statement acknowledged that the U.S. recognizes Ukraine as an economy in transition to a market system, and notes that the U.S. Export-Import Bank has proposed a Project Incentive Agreement to facilitate EXIM's support for projects in Ukraine.

In addition, the Overseas Private Investment Corp. (OPIC) and Ukraine signed three protocols for financing and insurance guarantees totaling $39.6 million.

The Ukrainian Parliament's accession to the NPT opened the door to expanded Ukrainian-U.S military cooperation. On November 22, Presidents Kuchma and Clinton signed a Bilateral Civil Space Agreement, the first ever agreement on space cooperation between the two countries. President Clinton announced that his administration was committed to expanding Ukrainian cooperation with the North Atlantic Treaty Organization (NATO) and that the U.S. would make funds available to Ukraine under the Warsaw Initiative to support Ukraine's participation in the Partnership for Peace program. In addition, Ukraine and the United States are scheduled to participate in over 35 cooperative military programs in 1995.

"Taking into account the role and place of the United States in world affairs, we can underscore that the level of relations we have reached with the U.S. is in the national interest of Ukraine, and this favorable relationship helps Ukraine strengthen its security and international authority," said Mr. Kuchma of his state visit.

What distinguished President Kuchma's state visit to the United States from President Kravchuk's official working visit was the official reception from Washington. The state visit accorded President Kuchma a 21-gun salute at an official state arrival ceremony on the South Lawn of the White House and a state dinner at the White House attended by the likes of singer Michael Bolton, and actors Jack Palance and Kathleen Turner.

President Kravchuk official working visit allowed for a 19-gun salute at a full honors arrival ceremony at the Pentagon and dinner at the State Department hosted by Vice-President Al Gore and his wife, Tipper.

Both presidents met with President Clinton, Vice-President Gore, Secretary of State Warren Christopher and Secretary of Defense William Perry, as well as leading figures at the U.S. Treasury, the IMF and the World Bank.

Both met with OPIC President Ruth Harkin and addressed representatives of major corporations interested in the Ukrainian market, breakfasted with Zbigniew Brzezinski, national security advisor to former President Jimmy Carter; and met with members of Congress. Both presidents were hosted to receptions at Ukraine's Embassy to the United States, laid wreaths at the Tomb of the Unknowns and bouquets at the grave of President John F. Kennedy at Arlington National Cemetery, and visited the Taras Shevchenko monument downtown.

During the November summit, President Kuchma, who had traveled to the United States as a people's deputy in April to, among other things, meet Vice-President Gore, visited the U.S. Holocaust Memorial Museum. There, he presented Miles Lerman, chairman of the U.S. Holocaust Memorial Council, with a list of Ukrainians who saved Jews during the second world war and a container of earth from the site of Babyn Yar, where thousands of Jews, Ukrainians and others were massacred by the Nazis. Mr. Kuchma was joined by Rabbi Yaakov Dov Bleich, chief rabbi of Ukraine, and Iosef Zissels, president of the Association of Jewish Organizations and Communities of Ukraine, for a tour of the museum.

President Kuchma also addressed the Center for Strategic and International Studies and the National Press Club, met with NASA Administrator Daniel Goldin and visited the NASA Goddard Space Flight Center.

During the New York leg of the U.S. visit, President Kravchuk officially opened Ukraine's Consulate General in New York on March 5. "The fact that a Consulate General of Ukraine opened in the largest American city shows that our country is beginning to take on a key role in international relations," President Kravchuk said at the dedication ceremony.

He was honored at a reception at the United Nations; attended by 650 Ukrainian Americans and foreign diplomats, and attended a dinner at The Plaza with businesspersons interested in the Ukrainian market.

During his visit to New York, President Kuchma addressed a special plenary meeting of the 49th Session of the U.N. General Assembly on November 21. There he underscored that, while Ukraine had fulfilled its commitment to denuclearize and accede to the NPT, the West had not provided aid as had been promised. Prior to his address, President Kuchma met with U.S. Ambassador to the United Nations Madeleine Albright and U.N. Secretary General Boutros-Ghali.

He was honored by the Ukrainian American community at a dinner attended by close to 1,000 at the Marriott Marquis, and visited with Ukrainian American Church leaders and parishioners at St. Vladimir Ukrainian Orthodox Church and St. George Ukrainian Catholic Church.

Both presidents met with representatives of the Ukrainian American, Jewish and business communities while in New York.

During both visits, all three presidents - Clinton, Kravchuk and Kuchma - had an opportunity to visit with Ukraine's darling, Olympic gold medalist Oksana Baiul, who was a member of President Kravchuk's March delegation to the U.S. and a guest at President Kuchma's November state dinner.

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