THE WHITE HOUSE

Office of the Press Secretary

                 PRESS CONFERENCE OF THE VICE PRESIDENT 
                    AND PRIME MINISTER CHERNOMYRDIN

                                Room 450
                     Old Executive Office Building                   

4:15 P.M. EST

THE VICE PRESIDENT: Thank you very much for joining us this afternoon. The Prime Minister and I will make brief remarks before we get to your questions.

I'm grateful for the opportunity to sign this agreement. I will say to those of you who are witnessing it that the Prime Minister and I have the privilege of witnessing signatures on 18 other agreements in the Indian Treaty Room just a few short minutes ago, before coming to this ceremony.

I would like to begin this statement by extending my sincere thanks to you, Mr. Prime Minister, and to all of your colleagues on the Russian side for joining us for what was another productive session of our U.S.-Russian Joint Commission on Economic and Technological Cooperation. And in thanking our colleagues on the Russian side, I would like to personally thank my colleagues in the administration who have worked extremely hard during these past few days, and actually, during the six months since the previous meeting of this commission, in order to ensure that our time together with our Russian friends here in Washington was a real success. And it has been.

Earlier today, Prime Minister Chernomyrdin and I met with President Clinton. We reviewed the results of our discussions these past three days, and I was happy to report to the President that our joint efforts are continuing to show real results, lifting the lives of our citizens and strengthening the cause of reform and democracy.

The list of our accomplishments speaks for itself. Together we're creating a healthy and open climate for trade and investment that will create real jobs and real opportunity for an ever-growing number of our citizens. But much more can be done, and we are prepared to help by making available financing for investment, and by accelerating Russia's integration into the global economy.

I'm pleased to announce that the Overseas Private Investment Corporation signed agreements this week worth more than $335 million for five U.S. projects in Russia. OPIC's President, Ruth Harkin, who is here today, is someone I would like to express thanks to for your leadership and good work.

I'm also proud of an agreement we reached to jump-start American investment in Russia's regions. The Prime Minister and I firmly believe that we must look beyond the realm of national governments to strip away the obstacles to investors who want to reach beyond Moscow and develop business opportunities in Russia's heartland. To kick off this process, the Prime Minister and I will travel tomorrow morning to Chicago to learn more about the concerns and the hopes of business people who are on the front lines of Russia's growing market. And I look forward to hearing what they say.

Incidentally, I'm glad that going along with us will be our co-chair -- our vice chair on the U.S. side, Secretary Bill Daley.

We're also making great progress in transforming the weaponry of the Cold War into the tools of peace and economic prosperity. As a result of agreements we have reached through our commission, nuclear warheads are now being turned into electricity to light the factories and schools that will lead our nations and our children to a safer future. For example, in the next five years, this $2 billion commitment to Russia will result in the irreversible conversion of material equivalent to 7,000 nuclear warheads into diluted fuel for use in electric power plants.

And just as we are finding ways to fuel progress by converting tools of war into agents of peace, we also are working together to make the energy we use safer, cleaner and more widely available not only to our own citizens, but to markets around the world. I'm also pleased by the remarkable steps we have taken to ensure that our nuclear facilities will be forever secure and free from foul play, accidents and misuse.

In other areas of cooperation, our physicians, scientists and business people are now working together to explore new ways to treat disease, create jobs, protect our environment and test new frontiers in space, science and technology. And the results are benefitting both of our peoples.

For example, today we took steps to support new projects that would improve the availability of medications in Russia while providing new opportunities for U.S. business. We also are working to help fight disease in Russia, working alongside our Russian partners in this commission, by creating important new initiatives to deal with the problems such as lead poisoning, diphtheria, alcohol abuse, anemia, iodine deficiency and malnutrition.

Our engineers and researchers are conquering new frontiers not only here on Earth, but in outer space and in cyberspace, and our governments are summoning the courage and the vision to use technologies that were once the secret province of intelligence agencies to illuminate new vistas of knowledge about our environment, our seas and lakes, our forests, and even the Arctic Ocean.

These are but a few of the many example of how our bold, new partnership is serving our most fundamental national interests. And the Clinton administration, speaking on behalf of the President, intends to do more. In the budget that he proposed to Congress yesterday, President Clinton called for funding a new initiative called the Partnership for Freedom. This initiative would sustain our support for the economic revitalization of Russia and the other new independent states by increasing commercial, academic, and professional partnerships.

Let me be clear about one thing -- we invest in Russia not simply because it is the right thing to do but also because it is in our nation's best interest to do so. America's best traditions have been to engage, not to retreat. And we know that smart investments now will yield long-term dividends, measured in our nation's security, prosperity, and the well being of our citizens.

In separate discussions, responding to the instructions from our Presidents, the Prime Minister and I also reviewed preparations for the upcoming meeting between President Clinton and President Yeltsin, which, as the Prime Minister and I announced earlier today, will be held on March 20th and 21st in Helsinki, Finland. This will be a very important meeting. We expect that, among other things, the Presidents will address bilateral arms control, European security, and a number of economic issues of great importance to our citizens.

In our meeting earlier this afternoon, the President and I outlined to the Prime Minister how we're prepared to move forward in each of these areas. On economics, we made clear that our focus is investment. This, above all, is what Russia needs to achieve growth and to meet the aspirations of its citizens.

On arms control, we made crystal clear that reducing nuclear weapons is obviously in both countries' interest. Our people are safer because of the progress we have already made in reducing the nuclear threat, and continuing this process is at the core of U.S.-Russian security relations. Our focus now is to bring START II into force and get on quickly with further reductions in START III.

We also had a good exchange on European security issues. Our vision remains one of an undivided, democratic and stable Europe in which Russia participates as a full and constructive partner. The new NATO is an essential element of the future European security structure. We envisage a robust NATO-Russia relationship as a key element in Europe's evolving security architecture.

Obviously, this is a complex matter. But I am encouraged by our discussions. From the beginning, we have taken great care to address this issue with our Russian friends in an open and honest manner. There have been no surprises, nor will there be any surprises. On a few matters, we have agreed to disagree. But even there, we have narrowed the range of disagreement and the discussions are continuing.

NATO itself will continue its talks with Russia later this month, and President's Clinton and Yeltsin will discuss this intensively when they meet in March. On a couple of matters, we tasked a working group to get to work beginning this afternoon.

On a final and more personal note, I would like to say how pleased I am, Viktor Stepanovich, by the remarkable progress of our commission. We took the time, just the two of us, to look back over the previous three and a half, almost four years. And when you look at where we started and how much has been done in these eight commission meetings, and add it all up, it is something that we're very happy to report to you has made a tremendous difference for the people of the United States and for the people of Russia.

And as the work of this commission shows us, there is much more that we can yet do. We have to cover the distance between the past of the Cold War and a future of cooperation and progress. As we do so, we must not be deterred by isolationists in either country, whatever their political stripe, left, right or center. We cannot and we will not retreat from the path of engagement, friendship, partnership, and democracy. The cause of freedom and the right of our people to prosperity and security in a world at peace requires that we do no less.

Thank you very much. Spasibo bolshoye, Mr. Prime Minister. (Applause.)

PRIME MINISTER CHERNOMYRDIN: Mr. Vice President, ladies and gentlemen, friends, we have arrived here in the United States in order to meet with our permanent, I would say, partners now, and with my friend, Albert Gore, and to lay the foundations of our successful dialogue of our two Presidents in the next summit meeting between the two Presidents.

This subject matter occupied a central place in our discussions both with the U.S. President Bill Clinton, as Vice President Gore has just mentioned. And I relayed to President Clinton the message from President Yeltsin, which mentioned the discussions between us.

We spent a few hours -- a number of hours in the discussions tete a tete, and we managed to achieve considerable progress in the agreement of the agenda for the meeting, and as was mentioned in the announcement of the meeting of March 20th and 21st in Helsinki, and on a number of other issues.

And I would like to stress here, and avoid repetition, we also discussed the tempo achieved by our commission, and issues, and the problems that we addressed demonstrate the level of our relationship, what we need to achieve and what we want to achieve in our relationship. And I'm confident that the results of our commission will lie in the fact that we will have to formulate the objectives of the relationship between the United States for the foreseeable future and for the next years to come.

It is important not only for Russia and the United States, but for the entire world as well. And I am confident that during today's present meetings and during the meeting with the President, I became confident that the objectives will become clear and they will be easier for others to understand our objectives and final aims and, as they say, for those who live in our planet.

And from the bottom of my heart, I would like to say thank you very much to all our colleagues on the U.S. side who has been working with us for many months, more than three years, and to my colleagues on the Russian side who also, without sparing their efforts, were addressing the issues laid before them.

We discussed foreign policies and international issues, and the discussion was constructive. In 1997, we will see -- all of us -- we will see a threshold, threshold of relationship between the United States and Russia. We all will have to make difficult decisions -- primarily involving European security and strategic armaments. Of course, not everywhere and in all issues our points of view coincide. On some issues, some significant divergence of views do exist. But it is precisely for this purpose to remove such disagreements that we meet. And I believe from that point of view, we have an opportunity now to be satisfied.

For example, we reiterated our confidence that the expansion of NATO will make the situation in Europe more complicated. But we will have to continue the dialogue. We will have to continue to talk. And the time spent today in frank discussions and talks convinced me once again, we will have to continue talking and discussing in order to understand what is behind the issues and what could be the possible consequences.

I'm in full agreement with my colleague Albert Gore that the European security structures of today are for all Europeans, including Russians. It should be one and only. It is in our interests. Perhaps we are talking different language, but I believe that during all our meetings and discussions and explanations, we will manage to understand each other better. Our concerns are now becoming clearer and more understandable to the United States. And I'm confident if our concerns are taken into consideration the nature of the North Atlantic alliance will change.

I do not exclude the possibility of concluding a document on the basics of relationship between Russia and NATO -- a fundamental and internationally obliging manner.

We instructed our agencies, ministries of foreign affairs, and others to continue the work now and in the near future on such a proposal. I'm confident that the meeting between Ms. Albright and Mr. Primakov, and then our presidential meeting will help to find a solution.

It gives me the satisfaction to note that we've managed to reach understanding in many other political and military issues. I foresee today your questions on the course and deliberations of the 8th commission. We have just completed the Washington round of this commission, and we summed up the four years of the work of this commission, determined priorities for the near future. In some instances, we looked as far ahead as the year 2000 -- 160 documents that were signed up to now, we've added today just a few minutes ago 18 or 19 documents. All in all, we will have four documents resulting from the work of our commission.

In recent years, speaking of results, I have to cite here a few numbers. The trade turnover increased by twofold, and the businesses in America are more active on the Russian markets. We have seen very good examples of cooperation in the energy, aircraft industry, some interesting projects we witness in the aerospace industry, car industry, telecommunications, biomedical and other industries. We have considerable progress in business relationship in the public health and agriculture. Resultative and constructive negotiations continue in the areas of environment protection where we note extremely great personal contribution of Vice President Gore.

At the same time both sides state that today's level of economic cooperation is far from being adequate to the present state and potentiality of the Russia and the United States.

We came to a conclusion that we need a new beginning in the investments and high technologies. I must admit that we have advanced considerably in the preparations of the program for the next four years. We intend to summarize this program on the next 9th session; perhaps on some issues even earlier. The new frontiers that we intend to reach demand new formats for the work of our commission. We intend to pursue the regional part to involve businesses because of the utmost importance. And it is no secret that our agreements will be implemented only provided that businesses are involved actively on both sides.

Tomorrow in Chicago, where we will fly tomorrow with the Vice President, we will meet with the representatives of both American and Russian business interests on many areas of cooperation. I believe that such discussions with our participation will become a regular feature. It will impart an additional impetus to the mutual contacts.

Our relationship has a number which is related to legal activities. We ask our partners to remove Russia out of the action of the Jackson-Vanik Amendment. We want to be recognized as a market economy. We do not want to be subject to any market limitations. We have some serious questions to ask of our American partners, and today's visit has a very important parliamentary element.

I had very interesting meetings with the leaders of both chambers of the Congress, with senators, members of the House of Representatives, with the participation of our parliamentarians. I attach great importance, utmost importance to the first meeting of the working group, Duma-Congress, which should address the issues of legal support for the economic cooperation between our two countries. We have witnessed a number of interesting suggestions and initiatives, including a housing initiative. And I intend to facilitate with all my resources initiatives of Capitol Hill.

In the 20th century, Russia has suffered numerous disasters, and we intend to make them a thing of the past so that nobody ever would fear our Russia. Russians and Americans have so much in common, and it is for us to learn to understand each other better and to know each other better. The two great peoples, the two great nations and powers must and should live in peace and trust. We have everything ready for this.

Thank you very much for your attention. We are prepared to answer your questions. (Applause.)

THE VICE PRESIDENT: We have some Russian journalists here as well as Americans, so we'll try to evenly distribute the questions.

Q I have a question for the Prime Minister. I wonder if you personally consider the enlargement of NATO a threat to Russia. If so, in what way is it a threat? If not, what message to you give by way of explanation to the Russian people for why it is not a threat?

PRIME MINISTER CHERNOMYRDIN: I personally do not believe -- I do not think -- and it's not a matter of threat, it's the matter of understanding what's behind this process, what do we want to achieve by this. We say today of a single European security structure with the participation of all democratic countries. Russia is a democratic country today, and we would not like to see such separation. We would like to understand what is NATO today -- today. What will it be tomorrow. And then, it will become clear to everyone.

I would like to repeat here, we do not -- we are worried about the expansion of NATO internally, shall we say; domestic worries present with regard to expansion of NATO. We do not want to have any separation alliance, any reasons for establishing military blocs and alliances. There are possibilities and there are historical chances that we have to use. But for this, we will have to work and work together, leaders of the states and governments. This I see as the most important factor.

Q Tass Agency to Vice President Gore. This is a mirror image of the previous question. The European countries who are striving to be accepted into NATO say openly they are afraid of the threat of Russia. Do you believe that Russia could be the source of threat?

THE VICE PRESIDENT: I think that Russians sometimes hear that concern when it is not being expressed. The desire of countries in Eastern and Central Europe to join NATO comes from a desire to have stability, peace, an atmosphere in which they do not feel it is necessary to devote a lot of their budgets to building up their own military forces. I'll give you an example. Just last week, Hungary and Romania entered into a new treaty that resolved a longstanding border dispute that had inter-ethnic dimensions. It was easier for them to resolve that dispute because they anticipated in their minds the possibility that at some point in the future, it might be possible to join NATO.

Now, that has nothing to do with the perception of Russia; nothing at all. The fear that is most important here is almost an existential fear. Now that these countries are newly-independent, just in the last decade, how do they deal with the question of security that every nation has to confront? For the last half-century, they have witnessed their neighbors in Western Europe steadily growing toward higher and higher levels of peace, stability, and prosperity because they have joined together in this organization that takes away those kinds of concerns. And so, naturally, they want that stability and peace for themselves.

I think sometimes this eagerness to reach out for NATO membership is misheard by some in Russia as primarily reflecting some concern about Russia's transformation being stopped and Russia going down another road. I don't think that's the principal reason at all. In point of fact, the real problem this -- the real reason this issue has been difficult for everybody to deal with is because we have two transformations going underway simultaneously, both triggered by the decision on the part of Russia to leave the former Soviet Union and bring about its dissolution.

The transformation in Russia is one that has created a democracy with free markets and political freedoms. And that transformation is continuing, and they're going through the changes that are going to attract large investment flows into Russia. At the same time, the independence of all the countries in Eastern and Central Europe that used to be under the sway of the former Soviet Union has led to a transformation there. And in their case, they are searching for new security arrangements -- as part of that transformation, not as part of the transformation of Russia.

Q Prime Minister Chernomyrdin, I had what was going to be a complicated question, but I can simplify it this way: Are you satisfied with the answers to the question you just heard from Vice President Gore? (Laughter.)

PRIME MINISTER CHERNOMYRDIN: That's why I say we'll have to continue meeting, have to meet more often and discuss more often. I can tell you one thing -- I'll make the thing simpler. NATO, in general, which will turn 50 in two years, was created as a military alliance aimed against the Soviet Union. Then, the Warsaw Treaty was established as a countermeasure -- the Warsaw Treaty was established. And the missiles on both sides were aimed at each other. The time has passed, the Soviet Union is no more, the Warsaw Treaty is no more. Russia has become and is becoming a different democratic country. But NATO, while NATO has remained, what kind of NATO has remained? What is or what tasks has NATO to address? We would like to understand. That's what we would like to understand. Hence our concerns in Russia. Hence, when NATO is mentioned, the entire Russia is joining its ranks, both opponents and proponents are joining together.

That is why we say, let us understand. And I said in my statement, we will not avoid and dance around this issue. We'll be working on the conclusion of a serious, legally binding document between Russia and NATO. But at the same time, we say, do not rush things.

And I can say, my apologies for a simplified answer. In July, where there will be no discussion of the expansion of NATO, only to invite some countries to join NATO. The joining will take place some two or three years later. Then we will have some things to surmise and to understand and to think over -- what is NATO?

THE VICE PRESIDENT: The Prime Minister is, of course, correct. The meeting in July is to issue invitations. I said earlier that part of the work of our commission is to transform warhead into usable fuel. I'm reminded that our method of dealing with some of these questions is somewhat similar. We're trying to take questions that could divide us and transform into answers that can help us keep this process on track.

Another Russian question and then I'll get to you, Barry.

Q A follow-on to the previous reply. Did you discuss a possibility of transformation of NATO from the military to a political alliance? If so, how much is it linked with a domestic political situation in Russia?

THE VICE PRESIDENT: The evolution of NATO's strategic concept has been underway and will continue in response to developments such as the conclusion of a NATO-Russia charter. So in that sense we did discuss the evolution of NATO's strategic concept.

I'll take a second Russian question and then come -- because they both stood up simultaneously.

Q The question to the Prime Minister, please. Viktor Stepanovich, on the economy, NATO is the sun of suns for us now. In the statement you identify three regions for future cooperation investment. Is this only a beginning and the list would be expanded? Is this a pilot project? Could you list the regions involved and what will be the mechanism to identify additional regions? And will they be free economic zones?

PRIME MINISTER CHERNOMYRDIN: These are the three first regions, indeed, as a pilot project where the mechanisms will be tested. I do not exclude that such regions could be economic zones, but not necessarily. Secondly, of course the list would be expanded. We will continue work.

Q Mr. Vice President, to break the stalemate in the Duma on START II, are you beginning to suggest that the United States is now prepared to begin negotiations on START III? And, of course, you understand how that would help the Russians adapt to START II?

And, Mr. Prime Minister, as we say politically in this country --

THE VICE PRESIDENT: This is a -- question, Mr. Prime Minister? (Laughter.)

Q Mr. Prime Minister, is there any way, as we say in this country, Mr. Yeltsin can deliver the Duma on START II? It's been a long, long wait.

THE VICE PRESIDENT: Let me answer the first part of the question and then turn to Viktor Stepanovich. The only word in your question I have trouble with is "negotiations" because -- let me phrase the answer without that word. Yes, we have started discussions about the possibility that we could together create guidelines for what START III could accomplish. And yes, we anticipate the possibility that our two Presidents, in their meeting in March, might have discussions on this topic. The value of such guidelines would be to show both countries how we could move to lower levels of warheads in both countries without requiring the expenditures necessary in either country to comply with the START II levels and mix of forces during the period of time when negotiations might continue.

Moving more quickly downward in the number of weapons on both sides can make both nations more secure, can avoid these unnecessary expenditures in both nations and meet the mutual goals of both nations. So I think that we've made some progress in getting closer to a meeting of the minds, but frankly, these are complex questions, as you know very well, and it will take some time on the part of our experts to go over it with a fine-toothed comb, but as a matter of general principle, I think we made some progress there.

PRIME MINISTER CHERNOMYRDIN: For us, the question of the START II is very important -- very. It was signed in 1993, and today as you understand is '97, no signature, no ratification. It has a political and military bearing and economic bearing, this treaty, quite naturally. And we would like the Duma to treat it with utmost seriousness, and it is doing so.

The issue cannot be addressed now solely in the context of the issue of the START II. Once again, this question will certainly be linked with other issues -- all other issues -- of course, including the European security, which is not quite consonant to interests of ours. And the difficulty is today of these issues when we discuss the European security, START II is Russia-United States -- very serious and important nuclear issue. The price is too high here. But some other issues are imputed into it which we would not like to be converged with the START II issues.

The First Deputy Speaker of the Russian Duma is here. He is a better versed person in this. But I think our Duma is -- our thinking place is thinking, and the decision, the solution will be adequate.

THE VICE PRESIDENT: I do think that the guidelines I alluded to, if successfully created, could make it significantly easier to describe why START II is so much in the best interests of both countries. And, of course, in the absence of ratification staying at START I levels would be very expensive for both countries, and not a desirable outcome.

I'll take another American question.

Q Mr. Vice President, Mr. Prime Minister, there were reports out of Moscow today in which the Russian Defense Minister says that defense funding is so inadequate in Russia that the Russian nuclear weapons control system might soon collapse if that inadequate funding were to persist. Does that coincide with your understanding? Did you address this issue in your discussions, and what can be done about a situation that sounds in dire straits?

PRIME MINISTER CHERNOMYRDIN: I haven't heard about this. I don't think that the Minister of Defense can throw about such weighty words just without reason, without good reason. I know him well enough. Mr. Rodionov is a serious person, a thinking person, understanding and reasonable person. And I don't think he'll throw about such words.

Was it a written message in a newspaper? Well, I understand now. It means it was never said. (Laughter.)

THE VICE PRESIDENT: We've run overtime. We'll just take a couple of more. Yes.

Q For the Prime Minister, can you give us an honest assessment as possible on the health of Mr. Yeltsin? How focused is he? How many hours a day is he able to work? Has his authority been eroded because of his health situation?

PRIME MINISTER CHERNOMYRDIN: I will be frank with you, so take no offense. I am not sitting right now next to the President. But as the Prime Minister, I know that today, all the issues that necessitate the decision taken together with the President are being taken care of by the President. Yes, the President is not able to be constantly in the office now. He is not in good enough health for this. Two complications -- I mean, the procedure and the disease -- is too much. It's too serious for one person in such a short period. And I understand there are a number of medical experts here, those who understand.

The President is recovering and he oversees all the necessary issues. The President is the one person that we miss very often, including myself, to address some other issues. But I would like to reiterate, this is all that could be remedied. The President is active both politically -- he meets at the highest level and he does everything that he has to do in the country. He talks over the telephone. He is working. But he needs some time to completely recover.

THE VICE PRESIDENT: Is there another Russian question?

Q Yes, yes. Vice President Gore, the question is, in the event the Eastern countries enter to the NATO, Russia would lose their traditional weapons markets. And do you think that the decision to adopt them would result in the losing by Russia of the portion of the weapons market? And what could be done about it?

THE VICE PRESIDENT: This is a question that, in the first instance, should be directed to these countries. What they choose to do to satisfy their security needs is up to them. And I think there is a good understanding of the fact that these countries, desiring the stability that I talked about earlier are the ones who are really driving the question of how we get a new European security architecture that gives them the confidence and peace and stability that they want. All these other questions are appendant or secondary and will in any case be questions that they will have to address.

I said we'd run over. I'll just take -- just one more and then we'll have to close.

Q Thanks. From the New York Times, Mr. Vice President and Mr. Prime Minister, you said that on issues where you had agreed to disagree, you had narrowed some of the differences, and you said there was a working group to handle a couple issues. Would you be specific about both matters, please -- either one of you?

THE VICE PRESIDENT: I said we had narrowed the range of disagreement, primarily by developing a clearer understanding of what each other's perceptions and positions are. Frankly, I think that going beyond that would probably not be helpful -- helpful to you, I understand, but not helpful to the process -- because now we're in to the details that can best be addressed by the working group that we have established. And I honestly think that opening that up and picking over it would hurt the chances for progress, which I'm convinced is very real.

Q Not even a subject matter, I mean --

THE VICE PRESIDENT: European security -- the new European security architecture.

Thank you all very much. (Applause.)

THE PRESS: Thank you.

END 5:05 P.M. EST