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11 March 1998

GCC10 TEXT: JOINT REPORT OF 10TH GCC MEETING

(Text: White House Release) (2570)
(The following joint report was released March 11, 1998, by the White
House Office of the Vice President following the tenth meeting and the
fifth anniversary, of the U.S.-Russian Joint Commission on Economic
and Technical Cooperation, also known as the Gore-Chernomyrdin
Commission.)
Joint Report by the Vice President of the United States of America and
the Chairman of the Government of the Russian Federation on the
Occasion of the Fifth Anniversary of the Founding of the U.S.
Commission on Economic and Technological Cooperation
On the occasion of the fifth anniversary of the founding of the
U.S.-Russian Commission on Economic and Technological Cooperation, the
Commission co-chairs, the Vice President of the United States of
America and the Chairman of the Government of the Russian Federation
have reviewed the Commission's progress and have laid out a course for
continued cooperation in furtherance of the goals of the Vancouver
Declaration.
In April of 1993, the Presidents of the United States of America and
the Russian Federation agreed to create a mechanism for coordinating
efforts to remove barriers to reciprocal trade, scientific
cooperation, and technical cooperation; for establishing cooperation
between their two countries' federal agencies on the creation of
favorable conditions for the activities of businesspeople in the U.S.
and Russian markets; and for identifying and resolving, in a timely
manner, problems arising in the course of joint economic, investment,
and technological activities.
The Vice President of the United States of America and the Chairman of
the Government of the Russian Federation are pleased to observe that
U.S.-Russian cooperation in economic and technological areas has, over
the past five years, become a significant factor in strengthening
partnership relations between the United States of America and the
Russian Federation and in ensuring that those relations are
sustainable, predictable, and uninterrupted. The Commission has lived
up to the hopes placed on its activities.
The Commission Co-chairs affirmed their commitment to the principles
embodied in the Joint Statement on the U.S.-Russia Economic Initiative
signed by President Clinton and President Yeltsin on March 21, 1997.
The United States and Russia will 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. They noted Russia's commitment to implement
internationally acceptable accounting and auditing standards, and to
create effective mechanisms for the settlement of commercial disputes.
The sides noted with satisfaction that the Commission has helped lay
the groundwork for significant growth in reciprocal trade, which has
more than doubled over the past five years and reached a volume of
over $7 billion for 1997. A major achievement was the striking
increase in diversity of goods traded. Although raw materials,
semi-finished products, and foodstuffs remain a sizable portion of
reciprocal trade, high-technology products represent an
ever-increasing share, primarily owing to cooperation in the aerospace
sector.
Expanded U.S.-Russian cooperation has directly affected the
Commission's activities. The range of issues in the Commission's
portfolio now includes space, nuclear and non-nuclear energy, science
and technology, the environment, agribusiness, health, business
development, defense conversion, and capital markets. Significant
results have been achieved in each of these areas.
The Business Development Committee was highly instrumental in creating
the conditions that enabled reciprocal trade to double between 1993
and 1997, and, among total investments in the Russian economy by
foreign investors, the U.S., which accounts for approximately
one-third of total foreign investment in Russia, occupies a strong
first place.
Specifically, the Committee has developed recommendations on market
access in both countries, commercial taxation, cooperation on
standards and certification, customs administration, and in combatting
crime against business. The Committee also helped remove obstacles to
bringing specific commercial projects to conclusion. One important
Committee initiative was to develop cooperation in small business,
which the two sides view as one of the most important sources of
expansion and consolidation of U.S.-Russian business partnership.
The success of the U.S. West Coast - Russian Far East Ad Hoc Working
Group created in 1995 has spurred active involvement in economic
cooperation by various regions of the two countries in developing
practical solutions supporting expanded trade and investment, such as
the Clear-Pac advance customs notification pilot project.
The sides took note of the increased activity of the Export-Import
Bank of the United States in assisting in financing exports of U.S.
goods and services to Russia. The scope of Ex-Im Bank's activities on
projects in Russia is now over $2 billion, nearly half of which is in
oil industry financing. Ex-Im Bank is also increasing its activity
with Russian commercial banks, and exploring ways to enhance
cooperation with them. Ex-Im Bank will be involved in efforts in
support of the Regional Investment Initiative, and is continuing to
work on arrangements in support of small- and medium-sized business.
The Regional Investment Initiative announced in February 1997 and
targeted at creating a better climate for private investment in
Russia's regions is now in full swing in the Russian Far East,
Novgorod and Samara oblasts. In each region, a plan for technical
cooperation, financing and partnership activities has been developed
with the goal of encouraging efforts already under way to attract
investment.
The Capital Markets Forum, with active private sector participation,
recommended priority reforms to expedite development of Russian
capital markets.
The Space Committee has also been very active. To date, as part of the
Shuttle-Mir Program, the U.S. Space Shuttle has made nine flights to
the Mir space station. Six U.S. astronauts have completed lengthy
assignments aboard the Russian Space Station Mir, and four Russian
cosmonauts have flown as crew on the Space Shuttle.
On January 29, 1998, the International Space Station Intergovernmental
Agreement, which formally brought Russia into the ISS partnership, was
signed between the United States, Russia, Japan, Canada, and eleven
member nations of the European Space Agency. In addition, the
Memorandum of Understanding between NASA and RSA was also formalized.
These documents, which formally establish the ISS partnership, further
develop the International Space Station Program and ensure ongoing
U.S.-Russian cooperation in the aerospace sector over the next fifteen
years.
In addition, a number of separate agreements signed within the Space
Committee's activities under the Commission, establish cooperation in
earth science, astrophysics, planetary research, astronomy, and space
biomedicine.
The work of the Commission has also supported U.S.-Russian aerospace
industry ties in the area of manufacturing and testing of a Russian
developed rocket engine for the purpose of creating a next generation
of launch systems.
The most visible aeronautics cooperative programs fostered under the
Commission have been the U.S.-Russian T-144 research program, which
uses the T-144 aircraft as a research tool to conduct in-flight
high-speed civil aviation experiments and the cooperative supersonic
ramjet engine testing program.
In non-nuclear energy, the joint efforts of the Energy Policy
Committee and Business Development Committee have contributed
significantly to the establishment of a legal basis for Russia's fuel
and electric power sector and to the improvement of Russia's
investment climate. These efforts include the passage of the Federal
law on Production Sharing Agreements and draft legislation to enhance
the effectiveness of the law.
The Committees promoted the completion of the first two production
sharing agreements for oil and gas extraction on Sakhalin (Sakhalin 1
and Sakhalin 2). These projects have been implemented, and the
economic benefits are beginning to take hold in the region.
The Energy Policy Committee has facilitated cooperation among the
Russian Federal Energy Commission and the U.S. Federal Energy
Regulatory Commission and state and regional regulatory bodies to
exchange information on creating fair and transparent energy
regulatory regimes.
Enhancing energy efficiency and harnessing renewable energy sources
represent another area of energy cooperation. The Committee has drawn
on U.S. legislative experience in drafting the Russian Federation's
Energy Conservation Act, in developing mechanisms to finance the
implementation of energy conservation projects and to attract funding
from international financial institutions, and in implementing
projects to modernize district heating systems in a number of Russian
cities.
Cooperation under two federal investment programs, "Energy
Conservation for Russia" and "Providing Energy for the Northern
Territories," is expected to continue long-term, as is cooperation in
manufacturing energy conservation equipment in Russia and in exchanges
of state-of-the-art technologies.
Work on nuclear energy has centered around two major themes: the
peaceful uses of nuclear energy and cooperation on the nuclear arms
reduction process, including safe handling, storage, and disposition
of nuclear materials.
Noteworthy examples of U.S.-Russian cooperation in this area are the
processing of highly enriched uranium from weapons into low-enriched
uranium for shipment to the U.S. for subsequent use to generate
electricity; cooperation to cease the production of weapons-grade
plutonium; cooperation on the safe and effective use and disposition
of weapons-grade plutonium; improved protection of and accounting for
nuclear materials; and some nuclear safety improvements.
The Defense Conversion Committee has effectively worked to facilitate
the expansion of the U.S.-Russian defense relationship.
The Committee's efforts to access both public and private funding for
defense conversion projects have been successful. In addition the
Committee has worked to create a more favorable business climate in
Russia to foster defense conversion investment and has helped to
develop a number of new programs and regulations in this regard.
Approximately $1 billion has been allocated through the Cooperative
Threat Reduction program to projects in Russia, including to eliminate
strategic offensive weapons, create a fissile material storage site,
and carry out conversion projects. Among the highest priority CTR
objectives are continued cooperation in eliminating strategic
offensive weapons, including: eliminating submarines with
submarine-launched ballistic missiles, intercontinental ballistic
missiles, solid-fuel rocket engines, and liquid rocket fuel; storage
and volume-reduction of low-grade radioactive waste; construction of a
storage site for fissile materials; and destruction of chemical
weapons.
The Committee has expressed strong support for expanded technology
cooperation and looks forward to the conclusion of an umbrella
agreement governing cooperation in the area of dual use technologies.
The Science and Technology Committee has been promoting the
implementation of major joint projects covering practically all
aspects of pure and applied science.
Drawing on the December 16, 1993, Intergovernmental Agreement on
Cooperation in Science and Technology, the Science and Technology
Committee supports cooperation in prospective programs of research on
the fundamental properties of matter, long-range forecasting of
climate change, improved early warning of natural disasters,
telecommunications, and high performance computing for scientific
purposes. A joint program of commercialization of the outcomes of
scientific research and research and development activities appears
highly promising.
Progress has been made toward convergence in the two sides' positions
on the protection and allocation of intellectual property rights and
toward resolving the issue of concessionary terms for the temporary
importation into the Russian Federation of U.S. scientific equipment
used in joint projects.
The Environment Committee is engaged in addressing the effects of
global climate change and in carrying out international programs to
protect the ozone layer, preserve biodiversity, and monitor
environmental change.
Among its future objectives is the "environmentalization" of all
avenues of U.S.- Russian cooperation, from the nature conservation
aspects of energy resource extraction in the North to the safe
elimination of strategic offensive weapons.
The Environmental Working Group (EWG) has succeeded in demonstrating
that the U.S. and Russia can effectively cooperate in applying
unclassified data derived from national security systems to specific
environmental questions. EWG studies have shown that those data, when
combined with data from civilian systems, can substantially enhance
scientific understanding of the environment and environmental
processes.
The EWG is now in the process of initiating several new areas of
cooperation, including boreal forest carbon processes, disaster
monitoring, and Arctic Climatology.
The Health Committee has developed joint programs to assist in
protecting and improving public health and improving the organization
and management of the healthcare system.
The Committee's efforts have borne fruit in an agreement to simplify
registration in Russia of U.S.-made pharmaceuticals; around 500 such
pharmaceuticals have already been registered in Russia. With support
from the U.S. Agency for International Development, two joint
pharmaceutical manufacturing projects are being carried out.
Cooperation on infectious diseases has strengthened disease
surveillance capacity and helped to improve control over the diptheria
epidemic and will help enable progress against tuberculosis,
poliomyelitis, and HIV/AIDS.
Health science communications including the use of the Medical
Literature Analysis and Retrieval System (MEDLARS) and the Internet
have been strengthened through the linkage of the National Library of
Medicine and the State Central Scientific-Medical Library.
Success is seen in implementing the Women's Reproductive Health
projects, under which six special centers have been set up in various
cities around Russia, and in preventing lead poisoning and dietary
deficiencies in iodine, fluoride, iron, selenium, and other
micronutrients as public health issues in the Russian Federation.
High priorities for cooperation under the Agribusiness Committee are
issues of agrarian reform and privatization in Russia, ensuring
reciprocal market access, agricultural machinery, agricultural
science, and education.
On an on-going basis, the Agriculture Machinery Building Working Group
promotes cooperation in the areas of trade and investment, technology
and training in food processing and packaging, and establishing joint
ventures for the production of modern agricultural machinery and food
processing equipment.
A program to revitalize Russian agriculture with regional investment
support (PRARI) is being carried out.
An interagency Veterinary Medicine Agreement has been signed; it
regulates veterinary health monitoring of animal products at export,
import, and during transit; it also provides for warnings of the
spread of animal diseases in both countries.
The basic outlines of an agreement and a siting plan have been
developed for the organization of a joint venture to raise broiler
chickens. Work is proceeding apace to institute a joint collection of
plant genetic resources.
Agricultural research and exchange linkages have been strengthened
through a series of joint workshops and conferences on undergraduate
curriculum revision and cooperation to establish Russian
non-governmental professional associations.
The visible results of the Commission's activities include the signing
or adoption, over the course of nine sessions, of more than 200
intergovernmental and interagency documents in every area and avenue
of U.S.-Russian cooperation.
Special place among these is occupied by the Joint Statement of the
United States of America and the Russian Federation on the Future Work
of the U.S.-Russian Commission on Economic and Technological
Cooperation, which establishes a clear agenda to implement the
objectives deriving from the U.S.-Russia Economic Initiative signed by
Presidents Clinton and Yeltsin in March, 1997.
It was noted with satisfaction that significant positive results have
been achieved in integrating Russia into leading international
economic and financial organizations, including the "G-8," the Paris
Club and APEC.
The two sides reaffirmed their intention to continue devoting special
attention to issues surrounding expeditious integration of Russia into
leading international economic organizations, including the WTO and
OECD. They noted that the upcoming G-8 energy ministerial in Moscow in
April of this year should be an important milestone on the road to the
G-8 summit in Birmingham.
Al Gore
Vice President of the United States
Viktor Chernomyrdin
Chairman of the Government of the Russian Federation
Washington, March 11, 1998