Bill Clinton photo

Background Briefing by Senior Administration Official

June 21, 1994

The Briefing Room

3:20 P.M. EDT

MS. MYERS: The following briefing, as you know, is ON BACKGROUND. [Name-1 deleted] will talk about Russia, Russia policy generally, about the upcoming G-7. [Name-2 deleted] will come along shortly and he will be prepared to talk in more detail about the Gore-Chernomyrdin events of the next couple of days.

SENIOR ADMINISTRATIVE OFFICIAL: Good afternoon. This has been, and will continue to be, a particularly active time in our relationship with Russia and Ukraine and the Baltic countries. And I just thought I'd list a couple of things that the President's going to be involved in, and the Vice President, over the next few weeks, and then be glad to take any questions you've got.

As you know, Prime Minister Chernomyrdin has just arrived at Andrews. He's here for a three-day official visit. He'll be staying in Blair House. He'll have meetings with the Vice President, many, many hours of meetings. He'll culminate with a meeting with the President on Thursday. My colleague from the Vice President's staff is going to be down here in about a half hour to take your questions specifically on the Gore-Chernomyrdin process.

Tomorrow, Secretary Christopher will be meeting with Foreign Minister Kozyrev in Brussels. They'll be discussing a wide variety of issues, including North Korea and Bosnia, a lot of the other conflicts around the borders of the old Soviet Union. But most importantly, Russia will be formally joining the Partnership for Peace tomorrow -- that's a quite important development for the President's new European policy that he articulated on his January trip.

July 6th, first stop of the next European trip, the President visits Riga, the capital of Latvia. He's going to have a meeting with the three Baltic presidents. He's going to be the first American president to visit a Baltic country. And that is going to -- I think that speaks to the fact that the President has been centrally involved over the last 12 to 14 months in the effort to convince Russia to get its troops out of Latvia and Estonia, a process that we think will be completed by the end of this summer.

And, of course, in Naples, Russia and Ukraine will both be major issues discussed by the G-7 leaders -- economic reform, nuclear power safety, political reform. There's then, of course, a special day, on July 10th, the second full day, where the G-7 has political and economic discussions with President Yeltsin and, for the first time, the G-7 and the Russian government issue a common statement on some of the major political and economic issues that are of concern to both sides.

That's July 10th. That's the second full day in Naples. So that day is entirely devoted to the G-7's relations with Russia. And then following that, the last event that the President will have in Naples is a bilateral meeting with Yeltsin, followed by a press conference. And that will be about two hours long. That will effectively, I think for both leaders, set up the summit meeting that they're planning to have here in Washington in the early autumn. So it's an active time.

I would also say in closing, before we go to questions, it's a hopeful time. I think that U.S. relations with Russia, with Ukraine, with the Baltics, other countries of the region including Kazakhstan are very sound, and they're on track. And I would contrast that with the general mood here in Washington in January after the President's last trip when a lot of people -- commentators, academic experts, some members of the press -- feared and said they feared that reform was going to end in Russia, that the trilateral agreement that the President and Kravchuk and Yeltsin had signed was not going to hold together, and that somehow the policies put in place in 1993 by the President and this administration were not --did not fit the bill.

I think if you fast-forward to today, six months later, on the economy, the Russian economy is stronger today than it was six months ago. There's been a vastly improved economic performance. Some of you may have seen some of the articles in the press on this. But Chernomyrdin has stuck to a Gaydar-like line on the budget and on inflation. Inflation over the last four months has been in single digits on a monthly basis. The Russian government has presented to the Duma, the new legislature, a very conservative budget. The IMF has recently awarded a new loan to Russia and has a major new loan in the works, if everything goes right, for the end of this year.

Q: How much for each?

SENIOR ADMINISTRATIVE OFFICIAL: The IMF awarded a $1.5 billion loan -- this is two months ago -- to Russia because Russia had made the progress.

Q: And the new one?

SENIOR ADMINISTRATIVE OFFICIAL: Well, if everything goes right, Russia and the IMF will achieve what they call a stand-by agreement by the end of this year that would be worth about $4 billion.

But the point is on the economy while it is still a very difficult time, and you really shouldn't -- we shouldn't exaggerate the progress because things could turn around, the progress has been there, it's been positive. And I think it's surprised a lot of people in Washington and around the world, and we think it speaks to the fact that the Russian government is committed to reform and that we have the right policies in place to support it.

I would also just point out one more additional thing, and that is that we have paid a lot of attention to Ukraine lately. I'll be glad to take any questions on that. But the trilateral agreement, which is the cornerstone of our relationship -- this is the agreement that permits the removal of the nuclear weapons from Ukraine into Russia -- is working and, in fact, it's ahead of schedule, the schedule the three presidents set out in January.

So having said that, I'd be glad to take any questions that you've got.

Q: The criticism lately has been that if your policy is correct, its execution may not be so good. And there have been shakeups reported, or coming, particularly in the aid program administration. Can you talk about what changes you are planning on and where the shortfalls have been?

SENIOR ADMINISTRATION OFFICIAL: Okay. I think the policy has been well-conceived and, in general, well-executed. I would say -- I would just point to you first, before I get to the aids czar question to the nuclear safety and also the nuclear weapons issue where we put in place, with the help of disbursements from the Congress through Nunn-Lugar, a very ambitious program to try to make sure that Kazakhstan, Belarus and Ukraine became nonnuclear countries in the future; and that is happening. We have signed agreements with all three countries to remove the weapons. And I think it's been not only well-conceived, but well-executed.

I would say on the economic side, President Clinton has provided the leadership since he took office in getting the G-7 to commit to major programs of assistance. And beyond that concept, those programs are being implemented through member governments; notably, the United States, but also through the IMF and the World Bank.

Now, on the question of bilateral aid, let me just say a couple of things. The President promised $1.6 billion at Vancouver -- $1.6 billion in aid to President Yeltsin, to the Russian Federation. One hundred percent of those funds have been obligated. That's a pretty good record.

The President then received from the Congress at his request an additional $2.5 billion in economic funds at the end --the last day of the fiscal year, at the end of September. That money has largely been unspent. The reason for that is we don't want to spend money in the absence of programs.

We have spent the intervening time working with the Russians and Ukrainians and Armenians and the others trying to design programs which can then be, we hope, effectively funded. I think we have come to the conclusion over the last couple of weeks that we need to implement those programs rapidly and effectively.

We have on our hands, if you will, a multibillion-dollar aid operation, and it is true that we are hoping to find and to hire in the next couple of weeks a new person to run the aid program. The President hasn't made a decision. No names have gone to him formally. We've talked to a lot of people, but that's where w are on that one.

Q: Well, it sounds like, when you're talking about need to design effective programs, that you're conceding the $1.6 billion may not have been well or effectively spent. Just because it's all spent is not necessarily a measure of success.

SENIOR ADMINISTRATIVE OFFICIAL: Actually, not at all. The Vancouver package was a very specific package of short-term measures. I think $900 million of it was in agricultural goods. And other measures -- some projects that were left over from the Bush administration, some new initiatives that have been conceived in the first two or three months of the Clinton administration. That was all spent, and I think that the concept behind it was sound and we stand behind it.

What I'm saying is that the President has given us very clear priorities on where he wants us to spend the money, but it is best to be patient when you design those programs to make sure they're going to be adequately designed and that the money's going to be well spent. One of the problems, of course, in this part of the world, is that the general economic conditions are such and the state of the economy is such that there is a wide possibility for the misuse of funds if you're not careful how you spend them. And we prefer to be careful than to be quick and sorry.

And the decision to go to the new aid coordinator is essentially a reflection of our feeling that we've got to take great care with it, but we also have to do a better job at implementing it rapidly once we've got the structures up. And the structures are now all about up.

Q: How do you account for their economic progress? And what does the belonging to part of NATO mean now for Russia?

SENIOR ADMINISTRATIVE OFFICIAL: On the first question, the economic progress has not been dramatic. I think it has been consistent and has been important. The major factor is the Russian government has committed itself to macroeconomic stabilization.

And that means to trying to keep the inflation rate down, trying to stem the explosion of credit that we saw last year, trying to keep the budget under control -- basically living within their means. That was not the case in 1992 and through part of 1993. That is the case now, and, I think, in part is the case because Russia understands that in order to receive the billions of dollars in Western assistance that it would like to receive, it has to meet certain conditions.

Conditionality, whether it's U.S. programs or the IMF or World Bank programs, is a very important principle. I think it works. So I would generally say that's the answer to the first question.

The answer to the second question is Russia is going to be a member of the Partnership for Peace like all the other countries that have joined. It will sign up to military exercises with NATO and with other members of the Partnership for Peace, to closer military integration and cooperation. There will be no special relationship for Russia in the Partnership For Peace. When Kosyrev signs up tomorrow, he will sign up the same way that the Czechs and the Poles and the Estonians and the Ukrainians signed up.

I will say, however, given Russia's size and importance to NATO, it is going to be normal, natural, for Russia and NATO to have a very active relationship outside of the Partnership for Peace on any number of questions. And you would expect that given the fact that Russia is a major power, and given where it's located geographically.

Q: Kosyrev said that he would sign tomorrow, and there's a document of protocol stating and stressing the status of Russia as a superpower. Could you tell us a bit more about that? And why, when you say Russia won't have special relationship with NATO, there seems to be in this protocol NATO has accepted to grant Russia a lot of what it demanded.

SENIOR ADMINISTRATION OFFICIAL: Well, let me just tell you what's going to happen tomorrow. Kosyrev will present Russia's documents to NATO. That presentation and that process will be identical to the way in which all the other countries signed up.

Beyond that, I don't believe it's correct to say that there will be a protocol signed. From our perspective, what will happen is, I think, that NATO will issue a statement on the content of the meeting that takes place tomorrow between Kosyrev and the NATO leaders. And that statement will describe our intentions for a broader relationship with Russia outside the purview of PFP.

Q: And it won't be signed?

SENIOR ADMINISTRATION OFFICIAL: I'm not completely sure about that, but I don't believe it will be signed. But let me take that question and try to get back to you tonight.

Q: It's only a statement, as far as you know?

SENIOR ADMINISTRATION OFFICIAL: That's right, that's right, a statement.

Q: But another thing. Do you plan -- does the administration envisage Russia becoming a full member of NATO one day?

SENIOR ADMINISTRATION OFFICIAL: Well, as you know, the President spoke to that in his January trip. The President's views, our very clear views are that NATO is going to expand eastward, that NATO must expand to play a useful role in the future of Europe's security, but that we're not at this time willing or, I think, even able, given conditions in Europe, security conditions, to say which countries will join and which countries won't. But we're not excluding any countries at this time, either.

Q: Including Russia, because we had more sources --

SENIOR ADMINISTRATION OFFICIAL: Including Russia. No one's excluding Russia.

Q: There were NATO sources this morning in Brussels saying that, in fact, there was no real plan for Russia to become a member of NATO, a full-fledged member of NATO one day.

SENIOR ADMINISTRATION OFFICIAL: There are no current plans for any country to become a member of NATO at this point. But I think we have been very clear about this -- we're not excluding any country, including Russia, from future membership.

Q: When you talk about joint military exercises, either with the Russians or others who have signed up for Partnership for Peace, who are the bad guys in these military exercises? (Laughter.)

SENIOR ADMINISTRATION OFFICIAL: The goal is -- it's a new world, it's the post-Cold War world. And the goal is to increase the level of confidence among the various militaries in Europe, East and West, in an evolutionary way to establish some patterns of cooperation -- training and exercises -- so that they get to know each other better, there is a greater degree of predictability, and so that if we need to combine forces against other threats for peacekeeping purposes elsewhere in the world, we have a better chance of succeeding when we do it.

So there's no -- NATO and the Partnership for Peace countries are not going to set up any third country as the adversary for these training exercises. The exercises are really training that, in effect, deal with the residue of the Cold War, and try to build new relationships among armies, but also among individuals as they train together. That's very important.

Q: To the extent that you want military exercises to be fairly realistic, I'm trying to understand what exactly these operations are going to entail. You're going to have, presumably, NATO and Russian troops working together at something. And what are they going to be --

SENIOR ADMINISTRATION OFFICIAL: Each of them will have a different focus is the answer. You know, for instance, we are planning bilateral exercises with the Russians, hopefully later in the autumn. And there are already NATO exercises planned within PFP with a number of countries. Each of them has a specific theme. They take place in a certain country. There is a military object to be gained in the exercise. I mean, there is a script for most of these exercises. But there's no one script, and to directly answer your question, there's no one country that NATO and the PFP countries are aiming at. And that's not the way we conceive of it at all.

Q: It's kind of a threat X?

SENIOR ADMINISTRATIVE OFFICIAL: For all sorts of eventualities.

Q: But do they do certain things such as, do they do amphibious landings? Do they do parachute drills, do they practice --

SENIOR ADMINISTRATIVE OFFICIAL: Sure. All sorts of things. There are naval exercises. There are land exercises. They include units from all the services. It's going to be quite diverse.

Q: Have you worked out in advance of the PFP signing the Russians' refusal so far to allow U.S. troops to participate in any exercises there?

SENIOR ADMINISTRATIVE OFFICIAL: Yes, we've been talking to the Russians about it. I wouldn't say it's Russia's refusal. I mean, we have agreed with the Russians that there will be U.S.-Russia military exercises in Russia. The Russian government has to lay that, and I'm fairly confident that we'll be able to announce fairly soon new dates for the exercise. I think they'll take place.

Q: Such as a political problem for Yeltsin?

SENIOR ADMINISTRATIVE OFFICIAL: Well, I think, as you know, there are some members of the Russian Duma that have objected to the fact that there will be exercises involving U.S. military forces on Russian soil. The Russian government has said publicly, including Yeltsin and Grachev, that they favor the exercises. They are on record as saying that, and from all of our private conversations with him, we think that is the case.

Q: What's happened to our old friend, Zhirinovsky? Is he dead? And why was Gaydar fired if they're following his policy?

SENIOR ADMINISTRATIVE OFFICIAL: Well, to the second question, Gaydar was not, as I understand it, he was not fired. He resigned from the government in January. He is still head of the major reform party and the Russian Duma, Russia's choice. He remains, I think, quite close to the Russian government and President Yeltsin.

On the first question, Zhirinovsky, there is no one administration view on this, but I'll give you my personal view. And my personal view is that as the Russian people, over the last six months since he was elected to the Duma, have seen and heard what he stands for, they have become increasingly disenchanted with him. He is obviously a force. I think he is a less powerful force than many people were predicting last December and January. I don't know if he's a spent force. I don't have a crystal ball, but I do know that if you look at the antireform forces in the Russian political spectrum, there are many forces far stronger, I think, and even far more effective within Russia than Zhirinovsky.

Q: How does the American side assess the performance of this Prime Minister? And, in general, how do you think the political situation is developing?

SENIOR ADMINISTRATION OFFICIAL: Well, I'm going to leave to my colleague a good analysis of Gore-Chernomyrdin, but let me just say a word about Chernomyrdin before he gets up here. Way back at Vancouver, in April '93, the President and Yeltsin decided that there should be a commission that works full-time on important issues having to do with energy and space and technology. But we didn't know Chernomyrdin well. Over the course of the last 14 months we've gotten to know him very well, and my colleague can speak to this better than I, but we think that he is a very impressive politician, pragmatic person, someone with enormous authority in the government and, I think, who displayed a great amount of loyalty to the government and to President Yeltsin throughout the crisis in '93.

He's been a good partner. But I'm sure my colleague, when he speaks, will want to pick up on that.

Q: Did the administration ever figure out the confusion last week over Kosyrev bellowing that Russia wasn't consulted on North Korean sanctions, but the administration saying indeed it was?

SENIOR ADMINISTRATION OFFICIAL: Yes. I think it was an elementary case of miscommunication. Because Secretary Christopher spoke to Kosyrev that morning, and the President Clinton wrote to President Yeltsin about North Korea in general that evening. We have had very good talks with them. I expect it will come up in tomorrow's meetings in Brussels between the two foreign ministers. And I think it was a problem that lasted probably two or three hours and no longer than that.

Q: Can you discuss the agenda at the bilateral meeting in Naples?

SENIOR ADMINISTRATION OFFICIAL: In Naples, the bilateral meeting? Again, they have only two hours together, and what they will be pointing towards is a two- or three-day summit here in Washington in the early autumn.

Certainly, President Clinton will want to raise the general issue of economic reform and our attempts to help Russian economic reform. He'll review the bilateral record, how we've done and what we hope to do in the future.

They will have just spent 24 hours with Chancellor Kohl and Prime Minister Major and President Mitterrand and the other leaders talking about Russian economic reform in the international context. And I think the President will want to reaffirm our very strong support for continued international lending through the IMF and the World Bank. He'll also, I'm sure, want to get an idea from President Yeltsin about the future direction of Russian reform, its pace, and the priorities that Yeltsin brings to that, any obstacles that are in the way. So that, I think, is issue number one.

Secondly, we'll certainly want to talk about the major security issues that are in front of us -- the Partnership for Peace; how can we make that work to fulfill President Clinton's desire that Partnership for Peace be an agent for European unity in the 21st century, and that it serve to help prevent the division of Europe again into blocs. That is the core objective behind Partnership for Peace.

Similarly, along those lines, we are committed to carrying out this trilateral agreement, which is so important for the security of the United States. We now have a situation where many hundreds of nuclear weapons have been pointed at the United States. We have an opportunity through the trilateral agreement to make sure that those weapons are disabled and they're transported back to Russia.

Third, I think they'll talk about foreign policy cooperation, which would entail all the issues that we've been talking about -- North Korea and Bosnia; certainly Russia-Ukraine relations; our continued very strong hope that, by the end of this summer, all Russian troops will be out of Estonia, as well as Latvia. That will be a big issue. The objective here on that score is that by August 31, all Russian troops will be withdrawn from Central and Eastern Europe for the first time since 1945, which is a quite significant historic development. Chancellor Kohl and Yeltsin are going to meet in Berlin on August 31. They're going to watch the departure of the last Russian troops who have been there since the close of the second world war.

President Clinton has been working by phone, by letter, and in meetings consistently to try to arrange a withdrawal of the Russian forces from Estonia and Latvia. I think we'll be successful in that. So I think that represents probably the core of what they'll be talking about in Naples.

Q: Do you have a date for the summit here in D.C.?

SENIOR ADMINISTRATIVE OFFICIAL: We don't. No, I expect that date to be announced in Naples, when the President meets Yeltsin. There's a press conference afterwards; I think they'll both announce it then. We actually haven't worked it out. We are kind of trading dates right now with the Russians trying to find some common days in their schedules.

Q: But it would be in Washington?


Q: You've been describing a slightly expanded role this year for Russia at the G-7 as a nonmember participant. There are some officials in Great Britain who are already talking about G- 8, making reference to G-8. What are the prospects, do you think, of Russia becoming a full-fledged member of the G-7 and expanding it?

SENIOR ADMINISTRATIVE OFFICIAL: A full-fledged member of the G-7, therefore, a member of a G-8 -- I think, frankly, right now, it is not imminent. I think we are very pleased -- and I think the Russians are pleased -- we just had discussions about this yesterday with a visiting Russian delegation -- with the current arrangement. What it calls for is for the G-7 essentially to meet as it has been meeting for 20 years now to discuss economic issues that involve the industrialized Western democracies. And that's the first day and a half of the G-7 summit.

What is new this year is that President Yeltsin, beginning on Saturday night, which includes a dinner and all day Sunday, is going to be a full-fledged and equal participant in talks with the G-7 on political and economic issues. In past years, if you think back to Gorbachev and Yeltsin at G-7 summits, they were in many ways the object of the summits. They were summoned; they were asked questions; they made presentations about economic reform; statements were made about how we felt about the progress of economic reform.

This year, for the first time, there's going to be a common statement issued by the Italian Prime Minister who's the chair of the summit which will basically amount to Russia and the G-7 speaking as one on a number of international issues -- economic and political. That is a very big symbolic, as well as substantive, change. It means that Russia's more integrated politically with the work of the G-7, as it should be. But it does stop short of full membership. And I think that's pretty much an arrangement that both sides are now satisfied with.

Q: So sort of a G-7 and a half?

SENIOR ADMINISTRATIVE OFFICIAL: It's the G-7. And then -- think of it as this way -- think of it as the G-7 and then that page closes, and you open a new page, and it's the G-7 plus one.

Q: Is it temporary or permanent arrangement or --

SENIOR ADMINISTRATIVE OFFICIAL: It's the first time we've done this. I expect -- I can't predict -- I expect it'll be a formula for next year, but that decision is not made by me and has not yet been made.

Q: To expand a bit on what you said about the Baltic states, what is your assessment of the peacekeeping ambitions of the Russians in what they call the near abroad? And are there any improvements in the contacts between Washington and the Kremlin?

SENIOR ADMINISTRATIVE OFFICIAL: Well, I don't think the Russians have any peacekeeping ambitions for the Baltics. I think the Russians are going to be out of the Baltics, and the Baltics, I think, will not have to deal with Russian troops any more. And I'm quite confident of that.

Pertaining to Ukraine, which is the most important country on Russia's borders, the biggest and most powerful, Russia has followed a policy of, I think, trying to cooperate with Ukraine on both the Crimean and Black Sea fleet crises. The Yeltsin government has not taken advantage of these crises.

In fact, if you look at the record and look at what they're saying and doing, the Yeltsin government is acting to support stability in Ukraine and the Kravchuk government, contrary to some conventional thought. The problem that we've had with the Russians has not been in the Baltics and the Ukraine as much as it's been in the Caucuses where we have, frankly, had some disagreements with the Russians about how to resolve the ethnic conflicts in the NagornoKaravakh and in Georgia.

And those disagreements remain. They are not -- they are tactical disagreements in some respects. In the case of the Nagorno-Karavakh, it might even be a strategic disagreement. But essentially, what we want is to make sure that the international community has a chance to help in the resolution of some of these conflicts. In the Nagorno-Karavakh we'd like the CSCE to be involved; in Georgia, the U.N.

Russia has in both cases followed a path of kind of unilateral Russian influence as a way to resolve the crises. And we don't think that is in the long run the best way to do it.

Q: In terms of getting the Russian troops out of the Baltics, is there a danger to the President's trip to Riga maybe boomeranging against Yeltsin in terms of Russian domestic politics that it'll be seen as rubbing more salt in the wounds of Russian pride that even before their last troops are out, here's the President of the United States helping to kick them out?

SENIOR ADMINISTRATIVE OFFICIAL: Well, I think, first of all, it's very important that an American president going to the Baltic countries -- between 1940 and 1992, successive American administrations, Democrat and Republican, all chose not to recognize Soviet rule in the Baltics. There was always an asterisk. And we said we recognize the borders of the Soviet Union. We never recognize Soviet rule. Now that these countries are independent and American president should be there because we stood by the Baltics for so long. So I think we can defend this trip on those grounds alone.

Now to get to your question, I don't think it's going to be a problem. Namely, because President Clinton has tried very hard to be helpful to both sides -- the Russians and the Baltics -- as they've worked out the process of withdrawal. On the one hand, we have been very clear that if Russian troops are not wanted in neighboring countries, they ought not to be there. That is the case with Estonia, Latvia and Lithuania. And on that basis, the President has called for their withdrawal.

On the other hand, we have an interest in the human rights and the civil rights of the Russian minorities in those countries. And the President has used his influence to try to promote a better situation. We have called for the introduction of the CSCE and CSC monitors in Estonia and Latvia, and Americans have been part of that -- American government officials.

I think the Russians appreciate that, and I think the Russian government knows that President Clinton has been a very effective behind-the-scenes arbiter throughout the last 14 months, and I don't think it'll pose a problem for him. We've not heard anything from the Russians to the contrary.

Q: What is the $2.5 million -- what are the programs you're designing, the $2.5 billion?

SENIOR ADMINISTRATION OFFICIAL: I'll be glad to come back to that, but perhaps at this point we should let my colleague present his views, and I can stick around if there are any other questions.

SECOND SENIOR ADMINISTRATION OFFICIAL: And this is a continuing senior administration official.

Q: This is getting tiresome -- senior administration official. Can't we use names? These people are human, aren't they? (Laughter.)

SENIOR ADMINISTRATION OFFICIAL: Not according to certain immediate members of my family. (Laughter.)

What I'm going to do is just briefly sketch out the structure of this commission. I'll try to answer your questions about what it hopes to accomplish in the next few days, but also point out in many cases things that I think we will get done are still being tidied up. So at the other end of this process, when our accomplishments are ready to become part of the public record, there will be another opportunity for the press to come in, and then we can go into in depth what it is that's been done.

My colleague mentioned that the commission was established at the Vancouver Summit in April 1993. It consists essentially of two parallel and interlocking structures, consisting of a set of commissions. There is a commission on business development, which is chaired by our Secretary of Commerce Ron Brown. There is an Energy Policy Committee, which is chaired by Hazel O'Leary on our side. There is a chair on Science and Technology; that's by Jack Gibbons, the head of OSTP.

There is a Defense Conversion Committee, which is headed by Secretary Perry. There is a Space Committee, which is handled by Dan Goldin, and the environment committee, which is headed by Administrator Carol Browner. Their approximate opposite numbers in the Russian system chair the counterpart Russian committees. The Vice President and the Prime Minister are the respective heads of the process on each side.

The cycle that we have gotten into is a meeting alternatively in capitals. This is the third meeting. The last meeting was in Moscow, the first meeting was here. The purpose of this commission is very nuts-and-boltsy, but I think a very essential purpose. Its basic function is to make sure that programs of bilateral interest, programs of joint activity that were agreed to between the sides are implemented.

The purpose of creating a structure headed by very senior politicians on both sides is to allow the bureaucracies to do their thing, to get as far as they can towards the resolution of issues, and then as needed, to let the Prime Minister and the Vice President intervene to help bring systems to closure so that the whole process can march along.

It is highly focused on specific issues in the agenda of each committee and on specific outcomes. And, yet, this is, in many respects, the boiler room of U.S.-Russian relationships, because this is the place where both sides get down to work to make real what they each commit to each other to do in those areas of concern that are on the agenda.

Now I'm just going to skip through the committees again and talk to you in general about what they are working on, and then throw it open for questions.

The Business Development Committee aims to promote access to the markets of Russia, and, of course, they're interested in access to the market of the United States. We, of course, are working on developing a stable business relationship with Russia, one in which U.S. investors can have confidence and make significant decisions involving major investment of corporate assets.

A very significant component of what this committee works on is energy. Associated with Ron Brown is an energy ombudsman who is the counselor of the Department of Commerce. His name is Jan Kalicki. He has an opposite number on the Russian side. Their job is to crunch the issues that block investment in the modernization of Russian oil and gas production. That's a major thing for both sides. There is far more private capital pent up and ready to go into investment in Russia than there ever could be government money either for assistance or for lending.

So when things have reached the point where this money can flow on a routine basis, that is the fulcrum for progress, more so than any other method.

With respect to the Energy Committee, it works on a very broad front. It concerns itself with improving the safety of the earlier models of Russian power reactors. It concerns itself with initiatives to bring to an end the production of bomb-grade materiel in Russia. It concerns itself with the conversion of high-enriched uranium into low-enriched uranium to be exported from Russia and enter into the fuel stream of the United States so that, over time, literally, the fuel elements that once were contained in Russian nuclear weapons essentially become part of the civilian fuel stream.

It concerns itself with nonnuclear energy, advanced power source, the problem, the relationship between them, the methods that the Russians used to generate electrical energy and their environmental problems.

It concerns itself with the efficiency of their gas and oil production, which is both a major economic problem for them and the source of a major environmental problem both regionally in Russia and, in some respects, globally.

The Science and Technology Committee has the mission of finding areas of joint cooperation in science and technology where a combining Russian skills and knowledge with ours will result in more useful knowledge for the United States, as well as for the Russians, in areas that we have identified as being of particular concern. These cover a wide range, but they include things that are very meaningful to people, including issues of health and biology as well as the physical and pure sciences.

The Defense Conversion Committee is attempting, through a series of joint projects with the Russians, to create path-finding arrangements whereby Russia and the United States can work together to develop new business ventures built on top of existing Russian military defense production capability so that that capability -- which obviously is on the decline as Russian procurement for weapons declines -- so that that capability can be converted into products and services that are useful to the civilian Russian community.

Obviously, this committee does not aim for the total conversion of the Russian defense industry. What it is looking for is the ability to demonstrate, in selected instances, how this can be done on the assumption that it will be replicated.

The Space Committee has been working on a number of joint ventures, but the most prominent of these is the joint space station project. We are expecting that this meeting will be a fundamental step forward in terms of quite precise agreements as to what is going to be done, by when it will be done, how much it will cost. A great deal of work has gone into that. What this means, frankly, is that on a certain date, which I hope we will all see, there will be an international space station in orbit, and it will be the product of the fusion of the best U.S. and Russian technologies. It will be up sooner, it will cost less, and it will be more competent than anything either one of us could build if we continued to do this in isolation from each other.

The environment committee has established a series of projects which are designed to build the capacity of the Russians, both at the national and the regional level, to understand what is happening in their environment. That is, to measure it and to plan for remedial steps, including water management and air quality control. Given the fact that the Soviet system so badly damaged the Russian environment, this is a matter of critical importance for the future of Russia and of its people.

So that's a fast description of how this thing is set up, what it's supposed to do, what the basic agenda is in each of the committees. Now I'll answer questions.

Q: Can you talk a little bit more about business development and what projects are sort of in the pipeline and in the works, and what's sort of blocking them from moving forward?

SECOND SENIOR ADMINISTRATION OFFICIAL: Let me just do that generically. Because, as I said, in a couple of days, whatever we've been able to get ready for signature will have been signed and we'll be able to discuss it with you.

But typically, what you have is a sharp need on the Russian side for capital investment and for technology. They are doing a lot to encourage that to happen. But at the same time, unpredictable things occur once investments flow. There can be taxes that weren't counted upon. There can be tariffs that weren't part of the deal. And these can have a profound effect on projects that are in progress; or they can scare other people away because they don't want to accept the risk of this level of unpredictability.

What the Russians are moving to, over time, is a more normal business environment. But it takes a great deal of effort because they are proceeding from a situation in which there was no legal foundation for any of this; no real contract law; no courts to handle it; no concept about private property, or what its sale meant; no concept about the sale of mineral rights; and a tradition which, instead, made all of these things seem suspect and even, at times, immoral to them after so many years under the Soviet system.

So we are gradually working through with them an understanding of what kind of stability and predictability it takes to encourage the flow of Western, and especially American, investment that we know is ready to go into Russia; and, in fact, has begun to go into Russia. The statistics for trade are up. They're about up 20, 25 percent since last year. So things are happening. And we are working with them through this committee to try to get to the point, frankly, where we don't need a committee like this anymore; where doing business with the Russians is as normal as doing business with anybody in the industrial world.

Q: The Russians have put out a fairly detailed list of all the corporation agreements and statements and memoranda of understanding that the expect or hope will be signed this week. And they've listed one on plutonium conversion of exports that they've said they're not sure about because they're not quite happy with the compensation that the United States has prepared to offer for this. Could you elaborate a little bit, or give us something --

SENIOR ADMINISTRATION OFFICIAL: Well, you see, one of the really hopeful signs is that the Russians are getting better at public relations. The answer is -- I just checked with my colleague -- it's news to us if they put out this list.

Q: They had a press conference yesterday in which they gave very detailed information on dollar amounts, of investments, participation and so forth. And they listed all these agreements and spoke about them a little bit more completely than you are doing.

SECOND SENIOR ADMINISTRATION OFFICIAL: I know. Rather, I gather. I didn't know, but I do gather that evidently they were talking about them in more detail. But I have to play by my own rules, which is I'm standing here knowing what's on the docket, I know what the problems are, I know it's ready to be signed. I know the odds on what may or may not be signed. I know the degree to which conversations between Gore and Chernomyrdin can change the odds, and I have to wait.

Q: Tell me this, then, on two things. On the plutonium, this has been in the public arena for some time, that the compensation to Russia hinges on them giving a share of it to Ukraine and Belarus.

SENIOR ADMINISTRATION OFFICIAL: That would not be plutonium, that sounds like the purchase of HEU -- high-enriched uranium.

Q: Nothing to do with the negotiations here this week?

SENIOR ADMINISTRATION OFFICIAL: It does, but basically, that arrangement is in place and should begin to work shortly. We don't think that there's anything left to work on in connection with it. We have other discussions going on with the Russians that bear specifically on the subject of plutonium. But what you were talking about, clearly, in context, has to do with their high-enriched uranium. And as far as I know, that is ready to roll.

Q: On the space project -- I think the figure of something like $400 million was spoken about from the American side. What is the Russian contribution? Is this all U.S. investment? What are they providing?

SECOND SENIOR ADMINISTRATION OFFICIAL: No, what we are doing is literally buying goods and services from the Russians, because they have capabilities that we don't, the ability to do certain things that we don't have. The ability to help us do certain things that we can't otherwise do.

And what we did was to work out a concept of a fused space station design involving their assets and ours. The money that you're talking about is what we are paying to secure from them either the use or the possession of some of their space assets to go into this.

Q: Is that allocated already, or is it new?

SECOND SENIOR ADMINISTRATION OFFICIAL: This is foreseen inside NASA's current and projected budget. It's been discussed in depth with members of the Congress and with the pertinent committees who are concerned with this.

Q: Do you remember at yesterday's press conference the Russians said that they are unsure about two agreements -- basically about only two of them. The first one about plutonium, and the second one is about the so-called "Sakhalin II Project." Could you tell us a little bit about the Sakhalin II?

SECOND SENIOR ADMINISTRATION OFFICIAL: I think that that belongs on the list of we'll see what comes out of the process.

Q: Do you believe that it's possible to sign an agreement at the upcoming Russian --

SECOND SENIOR ADMINISTRATION OFFICIAL: I think it's possible to sign an agreement or come damn close to it. Remember, what this process does is, we use these events to help to serve as forcing events in both governments. To accelerate the work of bureaucracies and to see what we can reasonably finish up.

What we can't finish up we usually advance further and roll it over into the next event. And there are several next events. There is a meeting of the industrial states that you just heard discussed. There is the coming Clinton-Yeltsin summit. And then there is the next meeting of the Gore-Chernomyrdin Commission. So the philosophy has been, you get it done wherever you can get it done. But we forced this process forward.

Q: Is the aluminum dumping problem going to be on the agenda this week?


Q: He doesn't speak English, does he?

Q: You mean by settled, the memorandum of understanding?

SENIOR ADMINISTRATION OFFICIAL: Do you want to comment -- whether or not the aluminum dumping problem has been settled by a memorandum of understanding.

Q: The domestic producers don't think it's been settled.

SECOND SENIOR ADMINISTRATION OFFICIAL: I believe it's been settled by an understanding reached by both the governments and private producers.

SENIOR ADMINISTRATION OFFICIAL: To be certain, why don't we take the question and come back to you.

Did you ask whether Chernomyrdin speaks English?

Q: What is the relationship, how does he deal --

SENIOR ADMINISTRATION OFFICIAL: I haven't forgotten you, but she's faster.

The relationship is very warm. It's -- I'm not bullshitting you. (Laughter.)

Q: I want that --

SECOND SENIOR ADMINISTRATION OFFICIAL: You can't get that in the press, it's not for family consumption.

They began, I think, by forming respect for one another very quickly. That's based on several things. It is based on a mutual recognition that the other is serious and is a serious individual, capable of getting things accomplished in his own government. And that's already been demonstrated through several iterations of this process.

It's also based simply on a piece of good luck, which is that they hit it off well together despite the differences in age and background. Why that should be so, I don't know, but it is so. They look forward to these meetings. I don't think it would cause either one of them to yield an inch on an important point. But the thing is that they anticipate these sessions. They believe that this process is working, and they have got clear indications that it is.

Q: Well, I believe in last -- or in past commission meetings there's been inconclusive talk about getting Russia formally in the practice of dumping radioactive into the ocean. Is there going to be any talk about that here, and are you anywhere closer than you were a few months ago?

SECOND SENIOR ADMINISTRATION OFFICIAL: That is an item on the agenda for the environmental committee and is still on the heading of, well, let's see what it is when we get done while we're here and we'll talk about it then.

Q: Well, in the energy environment realm, what are some of the other issues that are subject for discussion?

SECOND SENIOR ADMINISTRATION OFFICIAL: Let's see. One second. Bear with me. I think I mentioned on energy that there are discussions that relate to nuclear safety. There are discussions that relate to plutonium production. There are discussions that relate to the accountability of nuclear materials. There are discussions that relate to the safe storage of nuclear materials. There are discussions that relate to join study of energy alternatives -- that's mainly in the area of what is the least cost path to energy production, both economically and environmentally.

There are discussions of oil and gas law -- production sharing agreements, taxation; work is underway on the creation of an oil and gas technology center. There is work on energy efficiency and conservation. There is work on a so-called commodity import program which involves making available some of the better types of U.S. energy technology for use in the Russian system, in order to get them accustomed to what this kind of technology can do when applied. That's a partial list.

On environment -- I can't do this on each one, but you asked for an illustration of what the agenda covers. They are discussing such matters as biodiversity; environmental health cooperation; implementation of international agreements; waste disposal; conservation of a specific Russian regions; and as I said, better measurement, better training of personnel and better environmental planning in specific locations. That's an example. It gets to be, as I said, very nuts and boltsy. But it reaches to the level of how these two systems can interact and what they can do that is mutually beneficial.

Thank you.

END 4:15 P.M. EDT

William J. Clinton, Background Briefing by Senior Administration Official Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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