THE WHITE HOUSE
Office of the Press Secretary Helsinki, Finland ________________________________________________________________________ For Immediate Release March 21, 1997
Joint Statement on U.S.-Russia Economic Initiative
President Clinton and President Yeltsin have committed to a joint initiative to stimulate investment and growth in Russia, deepen U.S.-Russian economic ties and accelerate Russia's integration with global markets. In so doing, the Presidents underscored the vital importance of bold measures to complete Russia's historic transformation to a market economy. This transformation is in the mutual interest of the United States and Russia -- to meet the aspirations of the Russian people for a more secure and prosperous future, and to encourage trade, investment and new jobs in both countries. Both Presidents affirmed their commitment to achieve the vast potential of U.S.-Russian economic cooperation.
The Presidents discussed recent economic developments in their countries and objectives for the future. The process of unprecedented transformation of Russia into a democratic nation that respects private ownership and the principles of a free market is continuing. In the past five years, a once non-existent private sector has emerged to produce 70 percent of Russia's national income and employ 55 percent of the Russian workforce. With basic market structures now formed, markets, not the state, increasingly allocate resources and drive prices and business decisions. Private banks, capital markets and commodity exchanges are emerging as the new institutions underpinning Russian economics. Inflation has been sharply reduced, and Russia has begun to enter international capital markets. Taking into account these changes, the United States and Russia will consider problems connected with the regulation of trade between the two countries, take steps to increase access to each other's markets, and establish the appropriate conditions to extend Most Favored Nation status to Russia on a permanent and unconditional basis.
President Yeltsin outlined Russia's plans to enact and implement a new legal regime that convincingly demonstrates Russia's commitment to attracting foreign and domestic investment. His highest economic priority is a tax regime that both meets the revenue needs of the Russian government and stimulates legitimate business, including actions on the value-added tax, excise tax, and both corporate and individual income taxes. Russia will act to pass a new tax administration law that clarifies authorities, responsibilities, fines and the ability to resolve disputes. In the energy sector, measures will be taken to pass legislation that brings into full force Russia's Production Sharing Agreement law and provides the authority to develop PSA fields. New efforts will be made to ratify the U.S.-Russia bilateral investment treaty. The Presidents committed to deepen cooperation to fight economic crime. President Yeltsin highlighted his plans to consolidate the rule of law and to strengthen Russian legislation aimed in particular at combating money laundering and organized crime. President Yeltsin stressed the importance of the quick adoption of a new criminal procedure code. He will pursue the substantial completion of this agenda by the end of 1997. Further, the Presidents committed to work together to meet the challenge of attracting investment in order to utilize the vast human and natural resources that Russia possesses.
President Clinton stated that U.S. Government agencies will maximize support under their programs to finance American investment in Russia. U.S. efforts will include intensified efforts for project finance, political risk insurance and investment funds through the Overseas Private Investment Corporation; expanding financing for transactions involving equipment exports through the Export-Import Bank that will result in capital investments in the Russian economy; and additional investments through the U.S.-Russia Investment Fund.
The Presidents applauded plans announced by Vice President Gore and Prime Minister Chernomyrdin to launch a regional investment initiative that will attract resources to key regions, including the Russian Far East, to demonstrate the impact of joint efforts on policy reform and investment finance and to create new channels of commercial cooperation between regions in both countries. The United States and Russia recognize that Russian action on its economic agenda is key to building investor confidence and creating the demand needed to translate American financing into real investments in Russia. Toward this end, President Clinton is seeking additional funding in 1998 to expand U.S.-Russian economic cooperation, with a focus on tackling barriers to investment and doubling exchange programs between Americans and Russians, including the introduction of a new program to forge long-lasting connections between young, highly qualified individuals likely to emerge as influential leaders in future U.S. and Russian societies. The Presidents looked forward to the work of the joint Capital Markets Forum, which will bring together public and private sector participants to support the rapid development of Russia's capital markets.
Presidents Clinton and Yeltsin affirmed that cooperation to integrate Russia's economy into the global economic system represents one of their most important priorities. The United States and Russia will intensify their efforts to accelerate Russia's integration into the international economic community. The Presidents set as a target that both sides would undertake best efforts for Russia, on commercial conditions generally applicable to newly acceding members, to join the World Trade Organization in 1998, and to join the Paris Club in 1997 assuming agreement on conditions of membership. Together, the United States and Russia will define tasks which need to be accomplished and set targets for their completion in order to achieve this objective. They also count on making considerable progress toward Russia's accession to the Organization for Economic Cooperation and Development.
The Presidents agreed that Vice President Gore and Prime Minister Chernomyrdin should broaden and intensify the work of the U.S.-Russian Commission on Economic and Technological Cooperation. The Presidents welcomed the Commission's efforts to move beyond cooperation between federal governments to foster regional and local ties between the peoples of their countries. They noted the Commission's important achievements in the fields of trade and investment, energy, environment, health, defense conversion, agriculture, space, and science and technology. They recognized the Commission's leadership role in carrying forward bilateral relations into the twenty-first century.
Presidents Clinton and Yeltsin expect that as the century turns, their joint initiative will result in a strategic economic partnership between the United States and Russia that will decisively strengthen bilateral ties and positively shape changes in the world economy. They look forward to a prosperous and market-oriented Russia as a full partner in the premier organizations that will define economic and trade relations for the twenty-first century. This will allow Russia to take its place among the community of nations contributing to a new international economic order where open markets and free trade foster global prosperity and the well-being of American and Russian citizens alike.
FOR THE UNITED STATES FOR THE RUSSIAN FEDERATION: OF AMERICA:
Helsinki March 21, 1997