[Weekly Compilation of Presidential Documents Volume 30, Number 9 (Monday, March 7, 1994)]
[Pages 436-438]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Joint Statement on Economic and Commercial Cooperation

March 4, 1994

    The United States and Ukraine believe that expanded bilateral 
economic ties and commercial cooperation can make a significant 
contribution to strengthening their relations and developing free 
markets, economic growth and jobs in our two countries. Both countries 
are committed to making greater efforts to develop commercial projects 
based on trade, joint ventures and foreign direct investment, 
recognizing that individual commercial and investment decisions must be 
made by the enterprises concerned.

Trade

    Both countries attach great significance to their bilateral 
Agreement on Trade Relations which came into force on June 22, 1992, and 
are committed to carrying out its full provisions, including those 
covering the protection of intellectual property.
    The United States and Ukraine have agreed to establish a special 
Bilateral Commission on Trade and Investment, chaired on the U.S. side 
by the Department of Commerce and on the Ukrainian side by the Min- 

[[Page 437]]

istry of Foreign Economic Relations. The Commission will prepare an 
action plan for promoting bilateral trade and investment. The two 
countries will set a date for the first meeting of the Commission early 
in 1994. The Department of Commerce also intends to organize a trade 
promotion mission, including U.S. company representatives, to Ukraine.
    The two countries recognize that measures taken to reduce tariffs 
and non-tariff barriers can provide an important stimulus to bilateral 
trade. The United States appreciates the importance of market access for 
economies in transition, such as Ukraine. In this regard, the United 
States, on March 3, 1994, extended to Ukraine the benefits of the U.S. 
Generalized System of Preferences. This provides Ukraine with duty-free 
access into the U.S. market for some 4,400 products. During 1994, U.S. 
technical experts will visit Kiev to provide Ukrainian exporters and 
officials with information on the operation of the GSP program.
    The United States and Ukraine desire to provide liberal and 
reciprocal access to each other's market for goods and services. The two 
countries are committed to avoiding trade frictions and to facilitate 
access consistent with fair trade practices and their respective trade 
laws. They also intend to review and seek to remove technical barriers 
to trade related to standards, certification and testing of products.
    In these efforts, both sides will be guided by the principles of the 
GATT. The United States is a contracting party to the GATT and supports 
Ukraine's interest in formally applying for GATT membership. The United 
States is prepared to provide technical assistance to help Ukraine 
implement a trade regime consistent with GATT membership and to consult 
with Ukrainian authorities concerning the process and terms of GATT 
accession.
    The United States and Ukraine will also continue their ongoing 
discussions regarding the establishment of an effective export control 
regime that will allow Ukraine increased access to U.S. goods and high 
technology and allow Ukraine to participate fully in the COCOM 
Cooperation Forum. The U.S. is ready to provide technical assistance to 
help Ukraine create a national export control regime.
    The two leaders noted Ukraine's interest in acquiring the status of 
a full and equal partner in the Missile Technology Control Regime 
(MTCR). The United States and Ukraine will cooperate closely to help to 
achieve this goal, which will make an important contribution to 
international efforts to stem proliferation of ballistic missiles.

Investment

    U.S. private investment in Ukraine can make an important 
contribution to Ukraine's transition to a market economy by providing 
capital, jobs, improving product quality and manufacturing efficiency 
and introducing management and technical know-how. Both sides agree the 
Avoidance of Double Taxation Treaty and Bilateral Investment Treaty, 
providing comprehensive protection for investors, are important steps 
and could stimulate private capital flows. Such agreements need to be 
accompanied by administrative, tax, regulatory and legislative changes 
in Ukraine to improve the overall climate for investment and to provide 
the necessary security and stability that investors seek. Identifying 
barriers to investment and exchanging information on ways to improve the 
investment climate in Ukraine will be an important objective of the 
Bilateral Commission on Trade and Investment.
    The U.S. Overseas Private Investment Corporation has agreed to 
organize a conference on investment in Ukraine to be held in Chicago in 
July 1994. This will follow up on an OPIC-organized investment mission 
which visited Ukraine in 1993.

Science and Technology Cooperation

    Both sides agree to continue with exchanges of information in the 
area of science and technology and to cooperate in identifying 
opportunities for scientific and space research collaboration. They 
agreed to conclude a bilateral Science and Technology Agreement to 
formalize government-to-government cooperation and to establish a 
coordinating mechanism to foster bilateral science and technology 
cooperation. With the October 25, 1993 signing of a protocol for a 
Science and Technology Center in Kiev,

[[Page 438]]

both sides place a priority on getting this Center operational as 
quickly as possible. The two governments agreed to cooperate in the 
field of outer space and to hold early meetings of experts to consider 
specific issues and areas of cooperation in this field.
    In addition, the leaders agreed to establish a special Joint 
Commission to facilitate cooperation in areas of high technology and 
scientific research and development.

Cooperation in Defense Conversion

    The United States and Ukraine recognize that defense conversion is a 
priority task for each country and that cooperation will enable each 
country to meet that task more efficiently and effectively. To advance 
this cooperation, the two countries have established a United States-
Ukraine Committee on the Conversion of Defense Industry, co-chaired by 
the U.S. Deputy Secretary of Defense and the Minister of Engineering, 
Military-Industrial Complex and Conversion of Ukraine. On January 5, 
1994, U.S. Deputy Secretary of Defense Perry and Ukrainian Deputy 
Minister of Engineering, Military-Industrial Complex and Conversion V. 
Pavylukov signed a statement of principles governing the work of this 
Committee. According to this statement of principles, the Committee will 
serve as a channel of communication between the Governments of the 
United States and Ukraine on the most important questions of cooperation 
in defense conversion.

Support for Ukrainian Reform

    The two leaders continue to place the highest priority on the 
success of political and economic reform in Ukraine. The United States 
will provide up to 350 million dollars in economic assistance in Fiscal 
Year 1994 to support Ukraine's transition to a market-oriented economy 
and a democratic society. The United States extends this assistance with 
the understanding that full disbursement of this assistance will be 
contingent on Ukraine's proceeding with its process of reform, without 
which this assistance cannot be fully effective.
    The United States and Ukraine also agree that international 
financial institutions, particularly the IMF and the IBRD, have an 
essential role to play in helping Ukraine create and implement a 
comprehensive reform program. The international financial institutions 
can provide significant financial resources to support such a program. 
The United States encourages Ukraine to work closely with the IMF and 
the IBRD in implementing a program of bold economic reforms. The United 
States, for its part, is prepared to exercise leadership within the G-7 
to mobilize additional, multilateral assistance to support a 
comprehensive reform program.
    Both sides recognize that the extent of commercial and economic 
cooperation currently existing between the two countries is far below 
its potential. They agree that the principles and objectives elaborated 
in this statement are the best basis upon which to expand rapidly trade 
and investment. 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. The United States and Ukraine 
agree to work together to achieve these goals and to continue a process 
of reform which will provide the basis for the future prosperity of the 
Ukrainian people.

Note: An original was not available for verification of the content of 
this joint statement.