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Office of the Press Secretary

For Immediate Release March 4, 1994
                         BACKGROUND BRIEFING

                            March 4, 1994

                          The Briefing Room

3:10 P.M. EST

SENIOR ADMINISTRATION OFFICIAL: What I'd like to do is give a few introductory overview remarks, and then I will ask my colleague to talk about the Oval Office Meeting and the security elements of the discussions today; and then my other colleague, who gets to do soup and meat, along with the economic portion of the discussions.

First of all, by way of a bit of background, I think it's worth looking at this visit in the context which it really should have, and that is as a sort of turning point from what had been, I would say, from the end of 1991 or early 1992 up through at least last fall, a pretty difficult relationship which was focused in very great part on almost exclusively how the nuclear issue in Ukraine would play itself out and how we would have a relationship with a country which had an ambiguous approach to that problem.

If you go then back to last fall when Secretary Christopher went out to Ukraine, we began to really get a shift in the Ukraine's view of that -- basically movement to what I suppose we could simply put as, in our view, meeting the commitments that we had thought were agreed in Lisbon and making them real and tangible and getting to where we thought we needed to arrive on that issue.

That paved the way really for the President's stop in Kiev on the way to Moscow and the agreement statement that was reached in Moscow; which I would say in a sense was the key element to putting the nuclear issue in a sense on the road to what we believe is clear resolution -- I think a view now shared by the Russians as well as the Ukrainians -- and opening the prospect for a very much different kind of ability to conduct relations with Ukraine.

In that sense, I think this visit comes as the, if you will, what I thought you might call two beginnings -- the beginning of the end of our preoccupation with the nuclear issue, though that will continue to be a central problem of our time until we have it resolved. But it also the beginning of a new era in relations toward a kind of normal conduct of business with Ukraine which I think is exactly what we have hoped we could get to -- by this point.

The visit, I think, broadly speaking in that context, had three objectives. First, we wanted to underscore our determination to promote Ukraine's integration into the broader European and world economic and security systems as a fully independent state and full participant. Secondly, we wanted to show our support for Ukraine's independence, sovereignty, and development of its own resources; and to provide a tangible set of funds to make that into what I would call a real commitment that can, in fact, work toward market economy, a nonnuclear status for Ukraine, and a democratic society. And finally, it was the opportunity, and I think the President probably said it better than I could, to put the beginning to what I think is a different kind of bilateral engagement with Ukraine, which is really going to be, in my view, much broader

across the range of things that this government does with sort of full partners and friends in a time when Ukraine is going through some very difficult transition and change.

You all have a package of material, which I'm not going to reiterate. It is the sort of flesh on the bones in terms of the documents that were signed and agreements that were concluded.

The President, I think -- I would only make two other points before I give this over to my colleagues. The President made a real effort to express our understanding and appreciation for the role that President Kravchuk has been playing in this change in the relationship over the last several months. I think it's clear to all of us that he has provided leadership in his government and in his broader political world. That is quite courageous and has been very tough.

This has been in some ways clearly on some of the more sensitive aspects of the nuclear program, on some elements of the economic reform program that is only beginning, a very lonely walk, we think, for him. And he has shown a great deal of courage in essentially making critical decisions at very important moments.

I think we probably informed or tried to explain to you our view of this at the time of the Moscow summit, that we wouldn't have had that trilateral agreement without President Kravchuk's leadership. I think it's also true that we wouldn't be as far along in sort of developing, first of all, the implementation of that agreement and set of commitments as we are without him. And we probably wouldn't have as much confidence as we do that Ukraine really is trying now to grapple with the tough economic and social issues if it weren't for Kravchuk in a sense having a track record at this point of pretty tough decisions.

Secondly, we did spend a great deal of time on the nonnuclear aspects of the relationship this time. And in this, I think, it was a new sort of meeting. There was a great deal of discussion of the economic relationship. The Ukrainians seeking explanations from us about what the United States could do to engage with Ukraine's reform program; we trying to explain what we could and couldn't do.

We also were trying to explore with them options that may be other than bilateral -- in other words, multilateral organizations, or how we might work with allies to promote the kind of assistance that we have with some of the other NIS states, particularly Russia, now that Ukraine seems to prepared to move along.

The other elements that were discussed in some sense -- are gone through here in the agreements. But I would only add in the economic area that there was considerable effort by the President, I thought, to explain that one of the major things that we can hope to see from Ukraine if they are going to carry this process on successfully is some of the steps that will be required to engage the private sector from this country and others in order to get the economic transformation on its feet and moving ahead.

Q Did the President ask if he really is not going to run for reelection -- if his political --

SENIOR ADMINISTRATION OFFICIAL: He didn't at lunch, let's put it that way, where I was. My colleague maybe can say. I'm not sure.

Anyway, let me let my colleague -- then we'll answer some questions if we can.

SENIOR ADMINISTRATION OFFICIAL: We have a whole series of other things here later, is it possible that we could just ask questions? Would that be allowed? That's rude?


SENIOR ADMINISTRATION OFFICIAL: -- little inside story about what went on in the Oval Office? Actually they did not talk about Kravchuk's political future in the Oval Office.

Q Where did they -- anywhere?

SENIOR ADMINISTRATION OFFICIAL: They had a very interesting conversation actually because there was a -- they had something to start out with that was the real progress that's been made since January and since the trilateral accords were first signed, both in Kravchuk's ability to get the things ratified and approved overall by their Rada, by their parliament. And the President congratulated him on that. That meant the trilateral statement, START I and the Lisbon Protocol. And they talked about that process at some length and how -- sometimes it takes some pushing to get things through a parliamentary process.

But then they went on to talk about what I think is the real meat here, and that is the actual progress and implementation that's gone on over the last couple of weeks. And Kravchuk mentioned in the work they've been doing, really on a bilateral basis, with the Russians that there are now no political problems left. They are simply technical problems of getting warheads on trains, getting things moving. They have come, he said, to all the agreements they need to come to with the Russians to begin to get -- to get the process of implementation moving. And, indeed, he reflected a real immediacy in the movement of warheads from Ukraine into Russia. He said that was going to be occurring imminently.

And he really, I think, reflected in the discussions a feel that a lot of things have been resolved, particularly on the compensation questions, because as you know, that's something that the Ukrainians have been very, very concerned about, that they would be properly compensated for the nuclear material in their warheads. And he said both of those pieces had really been resolved. We were pleased to see that because we had had a trilateral process going on through the fall that led to the statement being signed, the trilateral accords in January, and expected to be further involved in a very intense basis with Moscow and Kiev, perhaps, to bring the --to a close some of these compensation questions particularly. But it's really, I think, notable that Russia and Kiev have made a lot of progress themselves in the six weeks since January 14th.

And so the compensation issues and the implementation issues in terms of actually transferring warheads and getting them moving have been resolved. And, in fact, they spoke about trains beginning to transfer warheads imminently, within the next couple of days.

So that was -- I thought that was a very kind of meaty part of the discussion. We then moved on to talk about NPT accession. The President, of course, was very interested. You're probably aware that the Ukrainians have been making a major push. The Kravchuk government has been making a major push -- the Kravchuk government has been making a major push. And we've actually been doing all we can to encourage that by getting some quick turnaround -- Nunn-Lugar assistance, moving to help with the dismantlement of SS-24 systems. We've quickly gotten some assistance on the ground in Ukraine and done some of those kinds of things to help move along the process of implementation of these accords in order to show the Rada that we're really standing behind the Kravchuk government.

Kravchuk's been quite grateful for that. But he said that in fact, the important thing is that all of the conditions to NPT accession were removed by the Rada. And he said that, in fact, today that when they voted on START I and the Lisbon Protocol back on February 3rd, they actually removed all conditions. And he said to the President that the majority of parliamentarians support accession to the Lisbon -- I'm sorry, to the NPT. But he said the fact is -- if it were not for the fact that 200 of the parliamentarians are running and out on the campaign trail, we would have gotten this thing -- we would have gotten this thing nailed down. So he was quite firm about that with the President. And I think that was reflected in the President's remarks today in the press conference when he said, look, we're confident that this is going to go forward. And I think I can concur with that wholeheartedly.

Let me talk for a minute about the new Nunn-Lugar assistance. We, as you know, extended $175 million in Nunn-Lugar assistance to Ukraine in FY '92-'93. Those monies could not be spent until the Ukrainians signed the implementing agreements that allow us then to begin to put money into projects. It's the legal basis upon which we spend money under Nunn-Lugar. Those agreements were not completed until December. So we are at a point of now spending $175 million in FY '92-'93 money; and we have now committed to the Ukrainians -- we've told them our intent to move forward with $175 million for FY '94-'95 -- another two-year tranche of funding.

The FY '94 amount is at least $100 million. And that is firm and clear, and we've been working with the Ukrainians already in trying to figure out what projects we will spend that money on. The first priority will continue to be the dismantlement of SS-19 and SS- 24 ICBMs in Ukraine. We'll continue to put the major amount of funding into that. That's the first purpose of the Nunn-Lugar program. But we will also be spending funds on export control and material accounting and control for nuclear materials. That's what really helps you take account of the nuclear materials problem -- where are the materials in the country.

And then finally a new area for the Ukrainians and one that they are very interested in is defense conversion. And we will be signing a new agreement with them on defense conversion and for the first time beginning to put some money into defense conversion. And the President also referred to that in his discussions.

So we're getting those new amounts nailed down now. And by the time Secretary Perry goes to Kiev in two weeks' time, we hope to have all those details nailed down.

Finally, let me just say a few words about Partnership For Peace. The President reflected that it was indeed Ukraine that was the first of the newly independent states to sign up to the Partnership For Peace. And Kravchuk, I thought, spoke very movingly during the Oval Office session about this. And he talked about what is in Europe today as being a set of very mature democracies and healthy economies. And what we need to do is see -- and security relationships. He said what we need to do is begin to see those things move east. And he said Ukraine can really play a role in making that happen. And the fact that Ukraine is essentially a flagship state in the Partnership for Peace will really help that process to begin to happen. And he included Russia specifically in the process of moving now the mature kind of democracies, economies and overall security relationships of Europe east. He also included Russia in that and talked about how that was an important aspect, working together with the NATO countries in the partnership.

Finally, the last part of the Oval Office before we stepped out and went on -- they went on to the working lunch -- there was a brief photo opportunity for Oksana Baiul and Victor Pretrenko. They came in and shook hands with both the President, the Vice

President and President Kravchuk and some of his staff. It was very, very pleasant, happy moment. A good chance to congratulate these two Olympians. So that was really the end of the meeting.

SENIOR ADMINISTRATION OFFICIAL: Good afternoon. The lunch was covered -- economic issues and also Russia-Ukraine issues, and so I'll be glad to take any questions on those issues that you have.

Q Did the Ukrainians seek any more specific security guarantees than the ones that we've talked about before in Moscow, et cetera?

SENIOR ADMINISTRATION OFFICIAL: They are security assurances, not guarantees that are embodied in a charter --

Q Sorry --


Q I know. I know.

SENIOR ADMINISTRATION OFFICIAL: -- that are embodied in a charter that we're negotiating that was initialed today. But those security assurances will not be extended until Ukraine accedes to the NPT, which has not yet happened.

Q Could you give us some details about these assurances, what exactly --

SENIOR ADMINISTRATION OFFICIAL: Let me do this -- let me ask -- if you have questions on that, my colleague, I think, is the best person to answer them.

Q What about the gas supply situation? Are you familiar with that? What are those options that the President mentioned?

SENIOR ADMINISTRATION OFFICIAL: Let me just say, in the lunch the President, our President, presented his thoughts on the economic relationship, and the gas question came up in a big way in this. And, as you know, the President announced an expansion of our economic aid -- more than doubling -- to $350 million. In January in Kiev the President announced $155 million. So a substantial expansion. That's to underwrite privatization, small business creation, agriculture development, exchanges, that kind of thing.

They also talked about Russia-Ukraine economic relations. And President Kravchuk described along with some others from the Ukrainian side the fact that Russia has taken action in the last 24 hours -- the Russian state gas company, Gazprom, to curtail by a significant amount gas exports to Ukraine, which as you know are very important for Ukraine, which is an industrial country, and which is not an energy producer in any significant way.

And President Clinton and President Kravchuk had a discussion about how this question could possibly -- this problem could be resolved. And President Clinton offered to try to be of help if that was going to be possible. The one thing he did ask -- offer -- and specifically as well, President Clinton -- would be to send a U.S. economic delegation to Ukraine fairly soon to talk about this issue, to talk about the issue of drawing the IMF and World Bank and Ukraine closer together, because that's what Ukraine needs. Ukraine needs to develop an economic reform program. And until it does, it's not going to be able to receive substantial international financial assistance. And this group would also review some of the bilateral issues.

Q Can Clinton be of immediate help?


Q Yes.

SENIOR ADMINISTRATION OFFICIAL: I don't think so. We don't have the capability under our foreign aid legislation -- AID doesn't have it -- to extend oil or gas assistance to any country on a credit or loan basis. It's not something we do. And there's also the problem that we're not very close by to Ukraine. It makes sense for Ukraine and Russia to work out this problem.

The problem is that Ukraine has paid its debt to Russia and to Turkmenistan for oil and gas. The debt is substantial. It's a little bit over a billion dollars.

Q would the U.S. try -- or could the U.S. try to approach the Russians to -- them to maybe not to cut off oil -- gas right now on a political level, I mean; speaking of extending credits?

SENIOR ADMINISTRATION OFFICIAL: But we haven't decided to do anything specific yet. It was a general -- the nature of the conversation was that President Clinton understands how serious this question is for President Kravchuk. He also understands the importance of good Russian-Ukrainian relations on economic and security issues. So there was a general commitment to try to help with the problem, but there wasn't -- there weren't any specific commitments made.

Q political intervention hasn't been ruled out yet?

SENIOR ADMINISTRATION OFFICIAL: Well, it hasn't been ruled out or in. I mean, this problem has just come up in the last 24 hours. And we wanted to get a sense today of how the Ukrainians viewed it. I'm sure we'll be talking to the Russians about it, too.

Q Does this change your thinking at all on opposing Kazakhstan sending a pipeline through Iran instead of using the one through Russia?

SENIOR ADMINISTRATION OFFICIAL: I don't think at this point it really affects our position on that. And, of course, we're not directly involved in the pipeline issue. We are involved to the extent that some of our American companies have an interest, and therefore we have an indirect interest.

Q Could I just clarify -- you said that you don't think there's anything that can be immediately done; but yet the President understands that is an emergency situation for them. Is there a process underway internally here to deliberate about, yes, indeed there is nothing we can do immediately?

SENIOR ADMINISTRATION OFFICIAL: Well, let me give you a little bit of background. This is not a new problem. There have been a number of cutoffs of gas and oil to Ukraine and to other countries in the region -- the Baltic countries, for instance -- from both Turkmenistan, which is a gas producer, and Russia, an oil and gas producer, over the past two years. It's not a new story.

There are lots of factors that go into these issues. And they're complicated, tied up -- not only in the economics, but the politics of the situation. And we just have an interest in stability between Russia and Ukraine. And we exercised that interest last year when we essentially became the intermediary in the trilateral negotiations on nuclear weapons. I can't see that kind of

thing happening in this particular case because it really doesn't lend itself to it.

We were, in a sense, an active party to the nuclear question because the weapons were pointed at us and we're a nuclear power. Here we are a friendly country to both of the countries concerned. We'll just try to use our influence with both countries, to counsel both to help them move towards a resolution of the problem. So the President is interested in doing that, but he didn't offer anything specific. He did offer a U.S. economic delegation to go to Ukraine soon to review this question and others. And that is as specific as he got.

SENIOR ADMINISTRATION OFFICIAL: Let me just say a few words about the security assurances issues. This was actually something they did discuss in the Oval Office -- but, mainly to pick up on where we left off with the trilateral statement in January. That statement contains the security assurances that we are going to extend to Ukraine when they accede to the NPT. So it's a preview of the security assurances.

And it really focuses in a couple of areas. One is the nuclear security assurances that are associated with the Nonproliferation Treaty. Another is an assurance of Ukraine's territorial integrity and sovereignty that was extraordinarily important during the course of the Rada debate over the trilateral statement. It was back in late January, early February, before the February 3rd vote.

The fact that Kravchuk had an assurance of this, down in writing, signed not only by Clinton, but also by Yeltsin, was extremely important and very effective with the Rada deputies. And he talked about that this morning in the Oval Office. And he said he expects to continue to get the same effect out of the assurances as they continue to work with the Rada toward NPT accession.

Another important part of the assurances is an assurance against economic coercion. And that is something that is part of the whole body of the language of the security assurances. Now in recent weeks, Ukraine has shown a great deal of interest and actually suggested to us that they would like to have a consultation clause associated with the security assurances and we have worked out such a consultation clause. So that's actually a kind of new element. It just says that if any concerns arise touching on the security assurances that the parties will consult, the parties to the assurances will consult because it will be a document that involves not only --

Q Is this a U.S.-Ukraine consultation clause, or are all the parties that sign that

SENIOR ADMINISTRATION OFFICIAL: All the parties have agreed to it, so it's Russia, Ukraine and the U.K., the three depository states for the Nonproliferation Treaty.

I'm happy to say that we heard just yesterday afternoon, actually, that the French have now agreed, as well, to extend security assurances to Ukraine. And they will be working with Ukraine to develop security assurances, I assume along the same lines that we have developed.

Q In very practical terms, what does it mean, "security assurances"? What does that mean -- if Ukraine is threatened in any way? How does it work?

SENIOR ADMINISTRATION OFFICIAL: What it does, in fact, in this case it allows an important first step to be taken. It sets up a consultation process where the parties can sit down and in a

very serious way talk through what we are going to go through. In all of these cases it is clearly a very serious process of working out in the diplomatic realm some solutions to these problems.

Q Is that -- there's been reporting in the last month or so that the security issue was not -- the assurances we've given had not been sufficient for the Rada and that it continued to be a big issue there. Did you get any sense of that?

SENIOR ADMINISTRATION OFFICIAL: It's not the evidence we have, based on what we've seen and, indeed, based on the vote pattern. On February 3rd, there was a majority, really a simple majority for NPT accession even at that time. But it was a situation where they had not gotten the two-thirds majority that they wanted. And we -- as I said, we heard from Kravchuk this morning that he continues to use them as an important tool in his work with the Rada and believes them to continue to be a very effective tool.

Now, I think the fact that, for example, the French have now agreed to extend security assurances as well will be an additional factor that will provide an additional strengthening to the tool. So I it's a very important and worthwhile step, and we're very pleased the French government has agreed to take it.

Q Are all these assurances part of the NPT?

SENIOR ADMINISTRATION OFFICIAL: They are actually, yes, they are the positive and negative security assurances associated with the NPT. That's part of what is in the security assurances document, but they are also other kinds of assurances such as the assurances for, as I said, of sovereignty and territory integrity and economic coercion.

Q What is the basis for those?


Q Why does that apply to Ukraine and not to Bosnia?

SENIOR ADMINISTRATION OFFICIAL: Well, they in fact apply to CSCE member parties.

Q Is Bosnia not a member state?

SENIOR ADMINISTRATION OFFICIAL: Well, of course. But I'm afraid I don't understand your question.

Q There's no guarantee of territorial integrity for Bosnia, obviously.

SENIOR ADMINISTRATION OFFICIAL: Well, I think that the situation here is one in which we're working a U.N. process in Bosnia that has been a hard process. There's no question about it. In Ukraine we're working a situation there where we have essentially a good trilateral process going. There are other interested parties including our European allies, and we welcome that. They are a little bit different situations.

Q Doesn't it undercut the assurances you've given to Ukraine if the example of Bosnia is so fresh in everybody's mind?


SENIOR ADMINISTRATION OFFICIAL: The Ukrainian Rada doesn't seem to think so.

Q Can I ask one broader question, which is the issue of Kravchuk's speech. Are you assuming that he will -- as you know, you all have briefed us heavily on how you anticipated that he would

run his campaign as a nonnuclear candidate -- blah, blah, blah. Are you too Kravchuk-centric? Is that how you do that? Yeltsin --

SENIOR ADMINISTRATION OFFICIAL: It's the first I've heard of that. (Laughter.)

Q Are you assuming he's going to be there to carry out the continuation of this program?

SENIOR ADMINISTRATION OFFICIAL: He made an interesting statement last week that he wasn't quite sure he would run for reelection.

Q I think it was more -- as reported it was he was not going to run.

SENIOR ADMINISTRATION OFFICIAL: But the interesting feature of their political system is there may not be an election in June for president. It's akin to the Russian situation.

Q Are you assuming he made that statement as a pressure to not have these elections?

SENIOR ADMINISTRATION OFFICIAL: I don't know why he made the statement. All I know is -- I mean, in answer to your question, I think it's likely there will not be elections, and I think it's likely he will serve out his full term. So he will be around for awhile.

In answer to your final question --

Q That was a joke.

SENIOR ADMINISTRATION OFFICIAL: (Laughter) -- we deal with governments that are in place.

Q You don't have to give me the Yeltsin --

SENIOR ADMINISTRATION OFFICIAL: I would only add, though, that's one of the reasons you want the Rada on board in ratifying these agreements -- that it isn't just Kravchuk.

Q he imply when he said that there won't be election in June, or is it your understanding?

SENIOR ADMINISTRATION OFFICIAL: I think it's just our sense of the political situation.

Q Did he comment on that -- elections?

SENIOR ADMINISTRATION OFFICIAL: Not in the course of the discussions.

Q How long is the rest of his term?


SENIOR ADMINISTRATION OFFICIAL: We should point out there are parliamentary elections scheduled for March 27th. The elections we are referring to here were the prospect of presidential elections in June.

THE PRESS: Thank you.

END3:40 P.M. EST