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12 March 1998

GCC10 TEXT: PRESS STATEMENT ON GORE-CHERNOMYRDIN COMMISSION

(Text: White House release) (2240)
(The following press statement was released March 11, 1998, by the
White House Office of the Vice President following the tenth meeting
of the U.S.-Russian Joint Commission on Economic and Technical
Cooperation, also known as the Gore-Chernomyrdin Commission.)
GORE-CHERNOMYRDIN COMMISSION 10TH SESSION
U.S. Vice President Al Gore and Chairman of the Government of the
Russian Federation Viktor Chernomyrdin co-chair the U.S.-Russian Joint
Commission on Economic and Technological Cooperation. The Commission
provides a framework for promoting a partnership between the United
States and Russia based on the principles enumerated in the Vancouver
and Moscow Summit declarations. These include a shared commitment to
democracy and human rights; a market economy and the rule of law; and
international peace and stability. The Commission's work is an effort
to realize concrete benefits from this partnership.
Presidents Clinton and Yeltsin created the Gore-Chernomyrdin
Commission at the Vancouver Summit in April 1993. The Commission's
original mandate was to enhance cooperation in the areas of space,
energy, and high technology. Since then, the Commission has expanded
its scope to include other areas of U.S.-Russian cooperation, such as
business development, defense conversion, health, science, the
environment, and agriculture. Its eight Committees are chaired at the
cabinet level. This tenth session of the Commission has registered
major progress in all areas of the Commission's work. Each Committee's
achievements are noted below.
Agribusiness Committee. Formed three years ago, and newest of the
Commission's nine Committees, the Agribusiness Committee has made
important progress in promoting agricultural reform. The recent
progress towards implementing a land code that would allow citizens to
buy, sell and collateralize land is especially encouraging. The Vice
President praises the success of the Program to Revitalize Agriculture
through Regional Investment (PRARI) workshop in January in Samara
oblast. In the Samara workshop, participants from 10 Russian oblasts
developed a concrete agenda to improve the regional and federal
investment climate for agribusiness. Due to the combination of PRARI
efforts and progress in overall agricultural reform, there are signs
of a substantial increase in the number of U.S. investments planned
for Russia's agribusiness sector. One OPIC-backed group has committed
up to $70 million in seven different agribusiness projects throughout
the NIS. Since the Agribusiness Committee's inception, agribusiness
managers from throughout Russia have participated in various
U.S.-based training programs sponsored by the Department of Commerce,
USAID and USDA, and Russian farms have gained U.S. expertise in
various farming and agribusiness techniques through the USAID/USDA
Farmer-to-Farmer program. The Vice President is also pleased that the
Agribusiness Committee is enhancing direct educational ties by
announcing a project to link U.S. land grant universities and Russian
agricultural institutes through joint seminars and courses to be
broadcast over satellites.
Business Development Committee. At this session, the Business
Development Committee (BDC) and Energy Policy Committee presented a
Joint Report that made recommendations which are already being
implemented in support of priority U.S.-Russian Production Sharing
Agreements (PSA) and Joint Venture Projects. Vice President Gore notes
that the Joint Report sets out the means of resolving the excise tax
and pipeline access problems of three U.S. joint ventures representing
investment of over $900 million. Progress in the Joint Report and its
implementation was due to the highly productive and creative approach
of the Russian side, aimed at the resolution of obstacles. The Joint
Report also presents agreed paths toward resolution of issues facing
five priority PSA projects. A direct result of this effort is a
Memorandum of Understanding that was signed between Conoco and LUKoil
on the Northern Territories project, worth billions of dollars in
prospective investment, production, and revenue for Russia. As a
realization of commitments made at the last session, the Vice
President supports the establishment of an International Center for
Accounting Standards in Moscow, which will increase Russia's ability
to attract investment by helping companies provide the transparency
that is needed in a global marketplace. The Joint Commercial Tax
Dialogue has produced a consensus on the key components of a tax
reform package and stresses the importance of passing a tax reform
package in 1998. Vice President Gore commends the efforts of the U.S.
Export-Import Bank, which has concluded a Framework Agreement to
guarantee commercial loans made to Russian banks for lending to small
business customers; the U.S. Trade and Development Agency, which has
committed a total of $3.5 million in grant agreements for feasibility
studies since the last Commission session; and the Overseas Private
Investment Corporation, which announced nearly $50 million in
political risk insurance for a Pepsi-Cola facility in St. Petersburg,
as well as a new defense conversion project in OPIC-backed
Agribusiness Partners International fund, which will invest up to $7
million in a project that is manufacturing soft drinks in a warehouse
formerly used to house military aircraft.
Defense Conversion Committee. Vice President Gore welcomes the news
that the Department of Defense's Cooperative Threat Reduction program
continues to achieve the accelerated and safe reduction of nuclear
materials, chemical and nuclear weapons, and to enhance the safety and
security of remaining nuclear weapons and materials. The Defense
Conversion Committee (DCC) has continued to pursue the transition of
Russian defense industries and has expanded its efforts to encourage
private investment -- with particular success in the Russian town of
Reutov. The Vice President also stresses the critical role of the
Overseas Private Investment Corporation, the U.S. Trade and
Development Agency, and the Russian State Conversion Fund in the long
term success of our conversion efforts in Russia. He commends and
encourages the efforts of the DCC to broaden the scope of its
activities and to seek new areas of technology cooperation, defense
reform, and economic adjustment of regions with high concentrations of
defense industries. Vice President Gore challenges the DCC to have a
cooperative technology agreement ready for signature by the next
Gore-Chernomyrdin Commission session.
Energy Policy Committee. The Energy Policy Committee made new progress
on U.S.-Russian cooperation on issues ranging from protection of
nuclear materials to safer nuclear power. The Vice President commends
the beginning of cooperation to address the difficult questions
associated with the transformation of the Russian nuclear complex.
This initiative will focus building commercial opportunities in
Russia's nuclear cities through existing U.S. programs which engage
Russian weapons scientists, and sharing of U.S. national laboratory
experiences in this area. The Vice President congratulates the Energy
Policy Committee for completing full-system material protection,
control and accounting upgrades at four Russian nuclear institutes in
February of this year. He also notes recent progress made in
negotiations on a technical agreement covering cooperation in the area
of plutonium disposition. Vice President Gore notes the importance of
future work in technology development and financing mechanisms that
will help Russia increase its energy efficiency and will help both
countries meet the commitments of the international Climate Change
Convention.
Environment Committee. The Environment Committee issued a joint
statement concerning development of a federal program to reduce the
environmental and public health risks arising from exposure to lead in
the Russian Federation. The joint statement builds on two years of
cooperation involving EPA, USAID, the U.S. Centers for Disease
Control, and Russian counterparts. The Vice President also supports
the Committee's efforts to engage bilaterally on the mechanics of
greenhouse gas emissions trading, and looks forward to prompt start-up
of an international effort, organized by the World Bank, to eliminate
the production of chlorofluorocarbons in Russia by the year 2000. In
addition, he also welcomes expanded multilateral cooperation in
addressing the problem of radioactive waste management in northwest
Russia, and anticipates the Committee's growing emphasis on
incorporating market mechanisms and incentives for environmental
improvement into Russia's economic recovery.
Environmental Working Group. The Environmental Working Group (EWG) has
taken new steps in its effort to work with Russia to speed cooperation
on environmental issues by sharing information derived from national
security systems. The EWG reviewed its recent studies of Boreal Forest
Characterization; Florida Bay Coastal Pollution; and the developing of
risk assessment methodologies for U.S. and Russia oil and gas
activities. The EWG also announced the publication of the Arctic Ocean
Summer Hydrographic CD-ROM Atlas. The Vice President notes that these
reports continue to demonstrate effectively how unclassified
information from national security systems can be combined with
civilian data to improve scientific understanding of the environment.
He particularly endorses the EWG's plan to study carbon balance and
processes in boreal forests, which could answer critical questions
about the global carbon balance. He encourages the EWG to consider new
ideas for broader cooperation on disaster monitoring. He is pleased
that work on the Arctic Ocean Sea Ice Atlas will begin soon. Finally,
he finally notes that key objectives of the EWG -- defining procedures
for exchanging derived product information and gaining confidence in
this unprecedented form of collaboration -- have been attained.
Health Committee. The Health Committee is continuing joint efforts to
fight infectious diseases and other important public health problems.
There has been success in halting the diphtheria epidemic. The U.S.
and Russia will continue to work together to eliminate pockets of
diphtheria and to improve the surveillance of polio in selected areas
of Russia as part of the global effort to eradicate this disease. At
this session, the Health Committee agreed that the U.S. and Russia
will work together, with other appropriate partners, to advance the
development of national HIV/AIDS strategy for Russia. Russia has
announced a renewed commitment to fight tuberculosis, HIV/AIDS, and
other sexually transmitted diseases. With the support of the U.S.
Agency for International Development, a delegation from Russia is
currently visiting Federal, State, and local officials and programs
concerned with HIV/AlDS and tuberculosis. Vice President Gore is
especially pleased to see the initial success in environmental health.
With the assistance of the United States, Russia has been trailblazing
in testing its children for blood lead exposure. The scientific
evidence from testing will help promote policy decisions directed
toward the reduction of exposure including the use of clean
technologies in industry. The Vice President welcomes the news of
progress toward the elimination of iodine deficiency, an effort
involving more than sixty partners including Kiwanis International and
UNICEF. The Health committee continues to encourage the development of
partnerships with non-governmental organizations and international
institutions to achieve well-defined goals. Pilot projects in maternal
and child health have resulted in decreases in the rate of abortion of
up to 36 percent. Access to quality health care is a continuing area
of emphasis in the Health Committee. The Ministry of Health has
announced a plan to establish a Council on Health Care Quality. The
plan reflects consultations between experts on health policy and
reform including discussions at the "Health Policy and Primary Care
Roundtable" at the last session.
Space Committee. The Space Committee continued to make progress in
U.S.-Russian space and aeronautics cooperation, particularly in the
joint activities of the historic and highly successful Shuttle-Mir
program and the further development and implementation of the
International Space Station (ISS) program. Russian participation in
the ISS program was formally established in January in Washington,
D.C., with the signature of the ISS Intergovernmental Agreement. The
parties have also achieved significant accomplishments in cooperative
activities on robotic missions to Mars, the Meteor-3M/Stratospheric
Aerosol and Gas Experiment (SAGE III), the Meteor-3M/Total Ozone
Mapping Spectrometer (TOMS) missions, the successful completion of
nineteen flights of the T-l44LL aircraft, and ongoing ground and
flight tests of the Supersonic Combustion Ramjet. These achievements
clearly demonstrate the success of U.S.-Russian space and aeronautics
cooperation and serve as a foundation for closer, future ties between
the U.S. and Russia.
Science and Technology Committee. The Science and Technology
Committee's cooperation has yielded such extensive and varied
accomplishments as the recovery of a complete record of climatic
change and tectonic evolution for the last 6-7 million years from
drilling cores obtained from sedimentation in Lake Baikal; the
development of an intelligent vehicle highway system; and, from
cooperation in the D-Zero experiment at Fermilab, the discovery and
initial characterization of the top quark. Vice President Gore
welcomes the Committee's efforts to expand collaboration in the Arctic
aimed at resolving scientific, sociological, and technological
problems concerning the physical and biological components of the
Arctic. He also endorses the Civilian R&D Foundation's proposed effort
to build a consortium of private foundations to support a program to
strengthen university-based scientific research in Russia and to help
integrate it with the needs of economic development.
Capital Markets Forum. The U.S.-Russia Capital Markets Forum has
completed significant work in recommending concrete steps to remove
the impediments to the successful development of Russian capital
markets. As part of this work, the Forum has endorsed a number of
recommendations received from the private sector. The most pressing of
these include strengthening the Russian Federal Commission for the
Securities Market's (FCSM) enforcement and sanctioning authority,
upgrading Russian accounting and auditing standards, and revising tax
laws to eliminate impediments to investment. These recommendations are
presented in greater detail in the "Summary Recommendations of the
Capital Markets Forum" to be submitted at this session. Vice President
Gore encourages the implementation of these specific recommendations
to further the development of Russia's capital markets.