3803 GmlFIDEfffL' L THE WHITE HOUSE WASHINGTON DECLASSIFIED PER E O 13526 'l on - 011 3 ft 1 3a I0 1 01-e» Kt 11 SUBJECT Expanded Plenary Meeting with President Kuchma and Ukrainian Delegation PARTICIPANTS U S The President Ambassador Miller Secretary of State Christopher Treasury Secretary Rubin National Security Advisor Lake Deputy Chief of Staff Bowles Deputy Secretary of State Talbott Treasury Under Secretary Summers ACDA Director Holum Commerce Counselor Kalicki OPIC President Har in NIS Assistance Coordinator Morningstar State Chief of Staff Donilon S NIS Senior Coordinator Collins OSD Assistant Secretary Carter JCS General Christman NSC Senior Director Blacker Treasury Deputy Under Secretary Lipton NSC Director Pifer Notetaker Ukraine President Kuchma Acting Prime Minister Marchuk Acting First Deputy Prime Minister Pynzenyk Acting Deputy Prime Minister Mityukov Acting Deputy Prime Minister Acting Minister of External Economic Relations Osyka Acting Deputy Prime Minister Acting Defense Minister Shmarov National Security Council Secretary Horbulyn Acting Foreign Minister Udovenko Presidential Chief of Staff Tabachnyk Acting Minister of Economics Shpek First Deputy Foreign Minister Tarasyuk DATE TIME AND PLACE _May 11 1995 5 15-6 00 p m Mariyinskyy Palace Kiev -CON FI DEN'f IAL Declassify on OADR From the Nunn-Lugar collection of the National Security Archive MEMORANDUM OF CONVERSATION COiCfllJEN'rIA L CONFIQENTIAl President Kuchma I want to welcome the P- resident and his distinguished delegation to Kiev We have been awaiting your arrival My just-concluded conversation with President Clinton confirms to me that the U S -Ukrainian relationship has a bright future ahead I suggest we listen to the information developed by members of our delegations while we the Presidents met R ' ' I agree U Acting Foreign Minister Udovenko We had fruitful discussions with Secretary Christopher and delegation during which we emphasized the importance of President Clinton's visit to Kiev We discussed the state of relations between the United States and Ukraine The Ukrainian side expressed gratitude for the political moral and financial support extended by the United States We dealt with various issues and emphasized the necessity of exchanging ideas regarding international problems There may be a number of joint initiatives ¢ We informed the American side of the current state of UkrainianRussian relations including some positive developments We also informed our counterparts of the negotiation on a treaty of friendship and cooperation and of the negot i ations on the Black Sea Fleet which have not been successful I have the impression that the United States is interested i n the further development of Ukrainian-Russian relations We also _discussed in detail issues related to European security including the expansion of NATO We informed our American interlocutors of our contacts with NATO and of our c ontacts regarding an invitation for the Ukrainian President to attend the Halifax G-7 summit Not all of our proposals were accepted right away but we have defined the scope of the issues and developed a mechanism for discussing them Kf Secretary Christopher We worked through a number o f issues and I would make two or three points We talked about border areas between Ukraine and its neighbors I emphasized the point that border demarcation between Ukraine and Russia might be useful Second we talked about the irnpbrtance of respect for minorities and about Russian Foreign Minister Kozyrev's remarks about use of force to protect Russians outside of Russia Any action by Russia regarding Russians living abroad must be consistent with OSCE principles i -f' We discussed the importance of Nunn-Lugar funds for dismantling nuclear facilities in Ukraine Despite the tight budget in the united States there remains strong support for the Nunn-Lugar program We also discussed the support that we wil l try t o give as Ukraine closes Chernobyl by the year 2000 J e1 -€rnff I DEN f IAL r • hlC lnr ITIAI From the Nunn-Lugar collection of the National Security Archive President Clinton CONFIDEM'f'IAL CONFI J NTf Al The inadequate financing of the budget creates a number of problems for Ukraine One is debts to Russia Turkmenistan and others We discussed cooperation in a variety of areas taxation budget reform government bonds servicing foreign debt the banking sector and privatization We are getting good help from the U S side for example on restructuring the energy sector We would like further help channeled to social services and social protection e7 President Kuchrna I can confirm that the United States seems much closer to Ukraine than other countries e- President Clinton It is kind of you to say that Perhaps the reason is that we came to appreciate earlier than the Europeans the strategic importance of Ukraine to all of Europe in the 21st century If you look at the map you can make the case that peace in a broad area depends on what happens to Ukraine and Turkey A second reason is the large number of UkrainianArnericans We are pleased to have this kind of partnership Secretary Christopher told me that the Ukrainian team is impressive and good to work with 2f Secretary Rubin I agree There is a remarkable team on the Ukrainian side that has considered in a very serious way where Ukraine has to go We have a good relationship with the Ukrainian economic team We can help with the World Bank and IMF and can provide technical assistance I have raised with G-7 finance ministers the promises that have been made with respect to Ukraine and will do so again as Halifax approaches I am impressed by the development of private and capital markets Where we can be helpful we will try to do so Acting Minister of Foreign Economic Relations Osyka We discussed trade and investment between tne U S and Ukraine at a special working group with Commerce Counselor Kalicki OPIC President Harkin and NIS Assistance Coordinator Morningstar We are satisfied by the fact that trade is up by 30 per ent over 1994 and the general value of investment is up as well Credit lines have started working and a number of projects are now I cmJFI DE n IAL From the Nunn-Lugar collection of the National Security Archive Acting First Deputy Prime Minister Pynzenyk We had an interesting discussion with Secretary Rubin and delegation focused on economic reform and the problems facing Ukraine We are satisfied that Ukraine has received a stand-by rogram and are very grateful for U S support for bilateral balance-ofpayments assistance and stand-by credits We have the impression that it is the United States not Europe that is Ukraine's neighbor European promises seem to be paper it is unclear what other conditions Europe will put forward on its assistance I Q1' GOHFIDgHTIAl CONF18ENTIAL We still however have some problems in trade regimes and securing investment Therefore the working group agreed to a list of issues to discuss the general trade regime between the two countries issues on trade preferences and anti-dumping issues regarding GATT WTO accession and issues regarding lifting bilateral limits on trade A second group of issues includes sectoral analysis of private investment and general privatization including a study of business in the NIS A third group of issues includes analysis of complete investment projects We also decided to create a special working group headed by Ambassador Miller to discuss implementation and successful completion of investment projects ' President Kuchma Perhaps Mrs Harkin would respond U OPIC President Harkin This is my third trip to Ukraine in three months I want to second what Minister Osyka said There are many projects which need to be worked on a case-by-case basis I want to thank President Kuchma for his attention to OPIC projects It has been a pleasure to tell the American business community about the strides being made in Ukraine and the great opportunities J2'f President Clinton There will be a meeting on trade and investment later this year OPIC President Harkin Yes this 1s in Mr Kalicki's area and U it will be held in July President Clinton And what about next year U Commerce Counselor Kalicki The Ukrainians will come to the United States for another conference sponsored by the Joint Commission on Trade and Investment U President Kuchma Are there other issues we should discuss U President Clinton Is there anything else we can do to help with your drive to energy independence What are your options What else could be done by the United States to assist WY President Kuchrna Energy is the number one issue for us It is a matter of survival We are working closely with the U S side which knows our needs on several projects that involve the World Bank and EBRD We have to breathe life into these 21' CONFIDEHTL' L r- __ 1 -1 n l lTI II I From the Nunn-Lugar collection of the National Security Archive underway such as the investment fund for ·0kraine and agricultural trade credi t insurance facility I emphasized our gratitude to the U S side for its help on these CONFI O TIAL COHFIDEN' 'IF President Kuchma A number of American visitors have raised the issue of insurance if this could be resolved it could lead to an influx of private capital into Ukraine U2'f' OPIC Director Harkin There 1s both political risk insurance and commercial insurance I know a couple of American companies that are interested in trying to help on commercial insurpnce such as AIG from New York e1 Acting Minister of External Economic elations Osyka We decided to discuss these issues There are two groups of questions that we would like to deal with in greater depth sectoral programs and insurance programs J21 President Kuchma I told President Clinton that there are several areas where we really need investment first agricultural production processing storage and transportation where there is no investment at the moment and second oil processing and the energy field We are not talking about general insurance but pri ority problems President Clinton We have done work on these U OPIC President Harkin President Clinton Yes we have U Does Ukraine have a commodity exchange yet J21 Acting Minister of External Economic Relations Osyka We have a commodity exchange program and are helping to fund a financial sector We now have a program of technical assistance and U S experts helping us to expand this network J 2'f Acting First Deputy Prime Minister Pynzenyk I want to say that agricultural produce is increasingly sold through agricultural exchanges and freely exported The volume of exported produce is increasing Regarding energy our balance-of-payments deficit is due to the consumption of energy We have large gas deposits but need investment A related issue is our dated technology which -EONFIDENTIAI r-- From the Nunn-Lugar collection of the National Security Archive National Security Council Secretary Horbu yn We are cooperating with the United States first of all in the area of nuclear energy We are talking with Westinghouse and AB B and examining bids from these two companies As regards fossil fuel the situation is very critical We will need U S expertise to find the best solution We started talking first about Chernobyl because it is an issue of interest to the whole world We want to be independent in getting nuclear fuel for our power plants We have our own uranium deposits and want to use U S instead of Russian tools on this •'• u CONFJDENTIAl - COHFIDEH'f AL makes for high energy consumption We woGld like help on this The volume of investment does not have to be large but it could mean big gains 1n energy savings We would like to form a joint investment fund for U S companies to participate in this 21 President Clinton Ways to make progress on using energy more efficiently should be given careful thought There are environmental benefits U S private companies are investing now in energy savings and splitting the benefits with consumers This is a very important issue As you rebuild your economy you can save tens of billions of dollars if you institute energy conservation $21 Secretary Christopher projects jir President Kuchma conclude U The World Bank is very favorable on such Thank you I believe at this point we should End of Conversation co v FI DS lT I AL- From the Nunn-Lugar collection of the National Security Archive ·-