The US Ambassador on Ukraine’s problem spots and tremendous potential

It has turned out that the United States and Ukraine have recently been practicing the epistolary style in their communications. We recall Ambassador Pifer’s signature under the Letter of the Four, which agitated everybody; then there were some postmen, Mr. Kuchma’s letters sent with Mr. Yushchenko, and a sort of comedy arose since Mr. Yushchenko was not received at any high level. Then there came your and Mr. Pifer’s article. Does this mean that from now on we will communicate only in written form? Why there are no meetings on a high level? Do you see any prospect for such meetings? And tell us please how did you come to the decision to write this article?

The Washington Quarterly was putting together an issue where they wanted to look at the first ten years of the former Soviet Union. Thus, Steven Pifer and I were invited to write this article, looking back at the past ten years of Ukraine, since both of us had been in Ukraine for such a long period. We asked the State Department, whether we could do this, and they said yes. So Steven and I wrote this article and obtained clearance from all the necessary people in our bureaucracy to make sure that it was consistent with American policy.

In the world of diplomacy one of the things is that it’s important to use all the tools that we have available in order to effectively communicate messages between us. The written word is obviously a powerful tool because it’s there, it’s on paper, and you can’t change it.

From a personal perspective, I was very happy to write this article with Steven, because usually at our jobs people are so busy with their work they have to do on a daily basis they don’t have a chance to reflect on the past, think about what it means, and think about the future. So, though I must admit that I got even less sleep on a few occasions than I usually do, I am really glad that we got this opportunity.

The issue of meetings between leaders of our countries I think is extremely important. There is no substitute in diplomacy for the personal interaction. There is no doubt it would be good for Ukraine and for the United States if it would be possible for our two presidents to meet. Unfortunately, that hasn’t been possible yet. They are the leaders of our countries, and they carry political weight that nobody else does. This is why it’s so important that they meet to discuss issues together, and it’s something we should work together at and see if that is possible.

It’s also very clear that President Bush has had to place on his agenda many serious responsibilities, which no one could of anticipated six months ago, and that also influences his agenda.

In the meantime, it’s important that we stay engaged on a number of other levels. On February 6, for example, Paula Dobriansky, the Undersecretary of State on Global Affairs, came to Ukraine. Prime Minister Kinakh was in the United States at the end of October, which was also extremely important because it gave him an opportunity to meet our top leadership, hear for himself their views, and educate Americans on how Ukraine is looking at this very important period in its history.

We continue our bilateral committees on economics, on foreign policy, on our defense issues, which allow our senior and middle officials to get together and work through practical problems in issues of the relationships and to look forward and see how we can cooperate.

On the day of the tenth anniversary of the US Embassy opening in Kyiv I heard an interesting phrase from a colleague of yours, that the Ukrainian-American relationship has moved from the first love stage to a mature relationship. What are the criteria of this maturity? How are, particularly, the economic sanctions to be viewed in terms of this maturity?

When Ukraine became independent in 1991 and when we first established diplomatic relations in 1992, in many ways people saw Ukraine as an experiment, something that was existing, novel, new, but there was a question as to whether this experiment would succeed. What we’ve seen is that Ukraine is no longer this experiment. It’s a reality. It’s a state. Not everybody believed that that will be true ten years later. I think what is most important in Ukraine’s relations with the United States and with other countries is that Ukraine has come to understand that now the future is its own, that it guides its own destiny. That is both an opportunity and a great responsibility.

In some ways, when I think back to history of our bilateral relationship, what’s most important for me is not something about the bilateralism, but something that happened internally in Ukraine, which is ratification of the Constitution. That Constitution in a very powerful and legal way created the legal foundation for Ukraine’s participation in the international community as a sovereign, independent state, which has its own identity but was not dependent on some derivative of the Soviet identity that it had in its past history.

As Ukraine has become a stronger country, one of the realities becomes that it must be engaged with the international community as an independent state. In order to be able to compete effectively in the international market, Ukraine has to demonstrate that it can present an environment here within the country, which is competitive with other countries in the region and the world.

One of the important things Ukraine can view in its future economical and political tendencies is to move forward to accession to the World Trade Organization. In this context one of the most important aspects of accession is protect intellectual property. One of the things that Ukraine and the United States are trying to do together has been how to create a regime to protect intellectual property within Ukraine that will be effective. That process began in June 2000 during President Clinton’s visit here when we agreed on our action on intellectual property. Unfortunately, it wasn’t possible to put in place the necessary legislation we had agreed upon. Unfortunately, in this specific case the export of pirate CDs from Ukraine mostly to European markets, cost about $200 million worth American exports to this place. Eventually, our law required us to take action, which resulted in the imposition on Ukraine of $75 million in sanctions in tariffs on Ukrainian exports to the United States. Trade disputes between countries occur all the time; we have them with our closest friends. The trade disputes between the US and the European Union over bananas became legendary. We had disputes with Canada over salmon. Believe me, the amounts of trade involved were many, many times bigger than that we discuss between the United States and Ukraine.

My point is that when such kinds of issues arise, the best way to deal with them is to find ways to engage in a practical dialogue to see what kind of understanding we could have reached. But in no way those specific trade issues are something that threaten our bilateral relationship, and in no way do they deny our appreciation for the tremendous progress that Ukraine has made in these ten years.

The CD problem has already bored readers to death, since everybody has been discussing it recently. Most Ukrainians believe that civilized practice is to win. Simultaneously, many people say that our high tech enterprises are going to be ruined and nothing will stop the Americans from capturing our market. There are people who believe that lobbyists in our parliament have shown their strength in the last voting, thus making an obstacle for Premier Kinakh. What way out of this sanctions situation do you see and whom in Ukraine do you view as a part in the negotiations?

You are absolutely right that there is a tremendous misunderstanding and disinformation on this issue. And you are also right that the fundamental point here should be to create conditions that are good for Ukraine’s industry. Indeed, there are significant parts of Ukrainian industry, which have strongly supported the legislation we proposed. For example, there is one CD manufacturer in Lviv, which has being working on a legal basis, and it strongly supports this legislation.

We also work on this issue with international recording industry. We were very pleased to hear international recorders say that they were interested in some contracts with Ukrainian recording companies and CD manufacturers to legally produce here in Ukraine the compact discs designed for the Ukrainian market. Their estimate is that the CDs can be sold here at 15-20 hryvnias.

Similarly, the computer and software industries show very strong support for legislation to protect intellectual property. Ukraine has huge intellectual potential to serve as a base for programming. Many companies in countries throughout the world hesitate to come here because they are concerned that once the contract is signed and the software is written, it can fall into pirates’ hands.

We propose two tracks to proceed on in a parallel way. First is implementation of the law and the presidential decree. If it results in an end to piracy, that’s good, that was our objective, that will be one of the key factors to resolve that issue. The second track is the cooperative one with the experts of the government to look at ways the law could be strengthened. That’s important not just because we are concerned about it. The real issue here is, Does the law give the Ukrainian authorities the power that they need to investigate and fight intellectual property crimes. I think there are some areas in the law that could be clarified; then it will be up to Ukrainian government to identify whether to make these changes.

Still, under what conditions can the sanctions be canceled?

I can’t be more specific than I have already been. All I can tell you is that the strategy I’ve just described — this is a strategy we are proposing to the government, and we are only beginning now to look on the pieces of this together. What I can say is that at the point when we agree that the problem has been solved we can immediately move to remove the sanctions.

Does the International Federation of the Recording Industry influence the American government’s position? Many people in Ukraine believe that the core of the problem is that companies acting through this institution control around 80% of the world market.

I think there is a misperception here, because international recording industry contracts with recording companies in other countries, for example here in Ukraine, which then sign contracts with manufacturers of CDs. And in the current case the problem that we experience is that Ukrainian CD manufacturers were producing CDs with international copyrights and exporting them to other countries displacing the legitimate exports from the United States. What the international recording companies have indicated is that if there is legal force here that gives them assurance that their intellectual property would be protected they are willing to sign contracts with Ukrainian recording companies to produce the CDs here locally as long as it has a stand legally and stand for the Ukrainian market.

On the question of whether American policy is influenced by American industry — yes, of course. American industry affects our commercial trade policy just as Ukrainian industry affects the Ukrainian one. There were also public hearings on the issues that have been raised by American industry, hearings that took part in the United States but invited international participation. Those hearings were very careful in this question and the other ones to document the damage that has been done before any further actions taken.

We had no interest in imposing the sanctions; we didn’t do this because we had a great desire to do it. If there is any difference in the way that the United States has treated Ukraine in this issue from other countries it’s that we’ve given Ukraine more time than any other country in our experience to try and fix the problem before actually moving forward the sanctions. Our relationship is bigger than this; I have no doubt whatsoever that our relationship will get through it.

We also have the poultry problem.

I think there is a very practical way to try and resolve this problem, and we are in the process of trying to do that.

What kind of chicken do you eat in Ukraine? Is it the American one, out of patriotic considerations, or some fresh Ukrainian one?

I’m sure that I eat Ukrainian chicken, but I must confess that I really don’t know. But I can tell you an interesting thing. One of the principal Ukrainian producers and distributors of poultry is in Mukacheve. I visited their plant myself. We’ve put a number of technical advice on how to improve their packaging, sanitary conditions, and distribution. The question of American poultry was first raised several months ago, in the fall of last year. At that point the Ukrainian veterinary service wanted to visit every single American company that exports poultry to Ukraine in order to determine whether or not they were going to allow the poultry export to Ukraine. We explained them that we don’t operate that way; that’s not the way that WTO rules are going. Normal practice is to negotiate on veterinarian certificates that specifies exactly what veterinary practices are acceptable to export the poultry from the US.

Now the Ukrainian veterinary service is going to begin a dialogue with the appropriate veterinary experts in the United States, and hopefully will have a scientific discussion with people who know what they are talking about. And people like me who have absolutely no idea about the sanitary practices on poultry can get out of it and leave it to experts.

You said that Ukraine and the US preserve their different views on intellectual property protection. Do they also have different views on Ukraine’s development?

I think on a fundamental basis there is a common appreciation between Ukraine and the United States, the values that we support and the policies that we are both to reinforce. One of the fortunate things in our relationship is that from the beginning there was a focus on the importance of securing a democratic and market-oriented Ukraine, integrated into Europe. This policy has been consistent between Democratic and Republican administrations.

It is important to recognize this is a period of great political intensity in Ukraine because of your parliamentary elections. And internationally this is perhaps one of the most intense moments of reshaping of the European political and security spheres that we’ve seen since 1997. You know that to the west of Ukraine practically each country is either in NATO and European Union or on the path to their accession. And of course Russia is being involved in much stronger relationship with NATO, with the European Union, and the United States. I think what happens is that when there are individual points of difference and this kind of factors, both the hot political climate here internally as well as this very challenging international environment, people look at each individually and ask what it means. What is the hidden signal behind it? They try to interpret in many instances something that is bigger than the specific event can be.

We see this period as a tremendous opportunity for Ukraine, because I think it’s a chance in Europe generally to be able to tear down whatever lingering dividing lines still exist.

For those who once argued that Ukraine couldn’t have a certain closer relationship with NATO or the West, because Russia would object to it, in fact those arguments had been taken away, because Russia itself is developing its close relations [with the West].

What kind of result of the elections could influence the bilateral relationship negatively?

I don’t want at this point to predict what any potential negative outcomes might be, especially since the official election campaign has not even started. Every reader of your newspaper knows what the issues are: the role of administrative resources, mass media, NGOs, how the actual process is conducted on Election Day, how the problems will be addressed when they occur — and they will occur, they occur in the United States too, because we are all human.

Recently the Communists accused you of collusion with Mr. Riabets. Mr. Riabets then stated that there were no grounds for such suspicions. Apparently, you were too busy at the time with writing your article and had no time to express yourself on this occasion and on Mr. Symonenko’s opinion of your stay in Ukraine.

First of all, this election is Ukraine’s election; it’s run by Ukrainians. The Central Election Commission guides the process, and this is not something extraneous forces should exercise. If the United States or any other donor could have a constructive role, it is to support the legitimate and legal role of Ukrainian institutions. With the Central Election Commission we’ve simply tried to strengthen their capacity and give them some resources to provide better information to all the political parties on the election process and the roles and responsibilities of political parties as commissioners, as observers. We will sponsor a number of seminars for this purpose. We are glad that virtually every single major political party is to participate, including the Communists.

In this case, what is your view of the Communists’ demands to proclaim you persona non grata in Ukraine?

I was sent here by President Bush to represent the United States and the values of our country. The best I can do is to follow his instructions and instructions of the Secretary of State and to do the things they want me to do in terms of representing our values. I will always speak about democracy, freedom of the speech, open markets, and competition, because those are things that my country believes in and this is what I’ve been sent here to represent. I will always respect Ukraine’s sovereignty and independence, because in fact those are things that my country has worked so hard to support.

In the Ukraine-US relationship questions constantly arise connected with the tape scandal. The week before last a California court passed a decision obliging Mr. Melnychenko to pass all the tapes in his possession to the US Department of Justice. What is the reason for such an interest from Washington in these tapes?

I cannot give any detailed information since this case is still under investigation. Under such circumstances, in fact, no direct access is given to details of information: that’s the law. But I can tell you that obviously there is a criminal case, which continues to proceed with Mr. Lazarenko. One of the things that American justice officials will certainly do is proceed with any measures they think necessary to get any information that might be relevant to that case.

Recent events in these terms look like an attempt to revitalize the first wave of the tape scandal precisely during the course of the parliamentary elections. Some people even admit that this is some kind of political technology.

I have no doubt that such speculations are arising because this issue is so politically charged that the number of rumors that were arising around it over the past year is incredible. I can as well tell you that there is no interest whatsoever on the part of the United States to revive the politicization of this issue. The judiciary in the United States simply does not work fast enough, and this information will not in fact even be considered during the period when the parliamentary process proceeds.

Don’t you have an impression that in this year of soft isolation Ukraine has been subject to during and after the tape scandal both Kyiv and Washington have suffered some losses?

First of all, I would disagree with characterization of it being soft isolation. Even though we have not had meetings between our presidents, we have had extensive meetings that could have succeeded on virtually every other level that one can imagine: our political systems, American and Ukrainian businesses, as well as on the grassroots level. They included meetings between your prime minister and our vice president, our foreign ministers, our defense ministers, our economics officials. In no way has there been a gap in our contacts between the two countries. Did we miss anything as a result of the fact that there was no meeting of the two presidents? Yes, of course. They are presidents, they are leaders of our country, and they are important. And that’s one of the reasons why it’s important for us to continue to work together so that relations between our countries remain frank, that we continue to address issues that we both think about either problems or opportunities, and when it becomes possible for two presidents to meet that we had a good foundation for that dialogue.

What kind of problems and opportunities are those?

I think one of the most fundamental issues is the changing dynamics of Europe and where Ukraine fits in it. I think it’s important to understand Ukraine’s goals and in the context of understanding those goals what kind of steps it takes to advance them. Let me give you an example. The relationship between NATO and Ukraine is very broad, but it’s also very thin. What is Ukraine’s vision on how it further be developed? Minister Shkidchenko gave some interesting ideas on some things that can be pursued. In particular, he mentioned the importance for Ukraine of developing a rapid reaction force, which can be a mechanism or a tool to create a faster and more mobile military. That would be consistent with the kind of changes that we see generally in all the European countries in terms of military restructuring. Is there a potential for Ukraine and NATO to work more aggressively to advance that goal and how can other countries, bilateral donors, partners of Ukraine, work to reinforce this goal? Other examples are the World Trade Organization and Ukraine’s accession, the changing dynamics of energy demand in Europe on Caspian oil and Ukraine’s role as a transit corridor. These are the kinds of issues that are going to fundamentally affect Ukraine’s position in the world economy and in the European political and security architecture. These kinds of things are appropriate for our leaders to discuss.

You said that it is important to understand how Ukraine views its future. Let me start my question with a minor digression into the past. On the eve of the presidential elections of 1999 our newspaper was critical toward the president who went for the elections with all his shortcomings. Simultaneously, one could get the impression that the US took a loyal stand toward the Ukrainians’ choice. Another significant event in Ukraine’s history was the Viktor Yushchenko government’s fall. First, people were ruled by apocalyptic sentiments, but then everybody saw that nothing critical has happened, and Anatoly Kinakh’s government is working quite effectively. The cassette scandal has deteriorated Ukraine’s reputation significantly. In spite of this, Ukraine’s government made a decision to take part in the anti-terrorist coalition. Are there any doubts that Ukraine, with all its problem personalities and complications, is proceeding along the way it has chosen?

This question presents an interesting issue of whether we put the world statically or dynamically. I share the view that Ukraine has made a great deal of progress. We also live in a dynamic world, and in order for a country to position itself most effectively it needs to be able to react promptly, to move quickly, and to play in pace with its competitors. Your question also raised in my mind a few other points I just wanted to address. It’s important for us to focus on the policies we support, not specific individuals. There is no secret that the United States always supported reforms, and we will indeed support policies in the countries that are consistent [with this]. But in the end the choice of a specific individual that carries out a policy in the country is the choice of the people of that country. When the tape scandal arose once again one of the things we reinforced was that we are not in a position to judge about what is true or not true and who is guilty or not guilty. Rather the tapes raised questions because of the whole context of the freedom of speech in Ukraine, and that is the issue that we had always been very clear about that we find important. This is the time when Ukraine needs to reflect upon the freedom of speech. In the anti-terrorism campaign again one of the things that has emerged so very clearly is that countries are interconnected in a way that we could not have imagined six months ago. All of us have a contribution to make to be able to defend the world, which stands up for certain basic values that we believe in, which are freedom and dignity.

Do you believe Ukraine’s participation in the anti-terrorist coalition to be sufficient?

Ukraine’s participation has been excellent. In every sphere we have found Ukrainian officials to be extremely cooperative and looking for ways to assist. There is one area that internationally all of us come to terms where we recognize that we all are to strengthen our control systems. This has to do with money laundering. In the United States we have quite sophisticated systems, and you still see that money for terrorists was able to enter our country. Ukraine is now just beginning the process of putting in place a money laundering law and developing the appropriate institutions. This is an area where I think we can cooperate and where Ukraine might also seek assistance from other countries. This war on terrorism has redefined the concept of war. Again, even six months ago nobody would associate the fight against terrorism with money laundering. As our understanding on these problems continues to evolve, I’m sure that there will be new areas where we all decide that we need stronger elements of cooperation.