U.S. DEPARTMENT OF STATE DISPATCH

VOLUME 5, SUPPLEMENT NO. 6, JULY 1994

PUBLISHED BY THE BUREAU OF PUBLIC AFFAIRS



GROUP OF SEVEN (G-7) 1994 ECONOMIC SUMMIT AND G-7 PLUS ONE 

POLITICAL MEETING, NAPLES, ITALY, JULY 8-10, 1994





ARTICLES IN THIS ISSUE 



G-7 and G-7 Plus One Documents 

1.  The Naples Summit:  Building Foundations for the Future--

President Clinton

2.  A Vision of Economic and Institutional Renewal--Secretary 

of the Treasury Bentsen, Secretary Christopher

3.  Naples Summit Communique:  Working Together for Sustained 

Growth 

4.  G-7 Plus One Chairman's Statement:  Progress Toward a More 

Secure and Humane World 

5.  Russia and the G-7 Summit:  Shared Goals and Common 

Understandings --President Clinton, Russian President Yeltsin

6.  Fact Sheet:  Economic Summits, 1981-1994

7.  Fact Sheet:  Benefits of the Uruguay Round 

8.  Fact Sheet:  The World Trade Organization

9.  Fact Sheet:  Developing Country Debt

10.  Fact Sheet:  Russia and U.S. Assistance

11.  Fact Sheet:  Gore-Chernomyrdin Commission

12.  Fact Sheet:  Safe and Secure Dismantlement of Nuclear 

Weapons in the New Independent States

13.  Fact Sheet:  U.S. Assistance to Central and Eastern Europe

14.  Fact Sheet:  Global Environmental Issues





ARTICLE 1



The Naples Summit:  Building Foundations for the Future

President Clinton

Opening remarks at a news conference, Naples, Italy, July 8, 

1994



Good afternoon.  During this trip, we are addressing three 

concerns that will determine whether we have a peaceful and 

prosperous future.



In Latvia and Poland, and later in Germany, we are focusing on 

the aftermath of the breakup of the Soviet empire and the need 

to strengthen democracy and economic growth there and to work 

for a united Europe that can be a partner in trade and a 

partner for peace.  Second, we are working against nuclear 

proliferation.



In Geneva, the third round of talks between the United States 

and North Korea has just begun today.  Here in Naples, at my 

first meeting with Japan's new Prime Minister, Mr. Murayama and 

I had a very good discussion about the North Korean situation.  

The Prime Minister praised what he called the United States' 

tenacious efforts and pledged his continuous support of our 

non-proliferation efforts.



Finally, as the world's leading economic powers gather tonight 

for our annual summit, we will act on the third and, in some 

ways, the most important issue of this trip--economic growth.  

I am here to keep our economic recovery going back home by 

promoting economic recovery throughout the world.  More than 

ever, what happens in the world economy directly affects our 

ability to create jobs and raise living standards for our own 

people.



For too long, our leaders ignored economic realities.  At  

home, our economy drifted, the deficit exploded, the middle 

class suffered.  Now, with the strategy for renewal, we have 

taken action.  We are putting our economic house in order, 

cutting our deficit in half, and reducing the federal work 

force to its smallest size in 30 years.  We are expanding 

exports by tearing down trade barriers and preparing our 

workers and our children through better education and job 

training for the jobs of the 21st century.



The economy has responded.  I am pleased to report today that 

in the last year and a half, our economy has created over 3.8 

million jobs--380,000 in the last month alone--and the highest 

number of manufacturing jobs in the last four years.  Ninety-

two percent of those new jobs are in the private sector, and 

last year more new businesses were incorporated than in any 

single year since the end of World War II.  



Our economy is coming back on its soundest footing in decades, 

with more jobs and low inflation.  In fact, we're leading the 

world.  America has 40% of the G-7's gross domestic product but 

provided 75% of the growth and about 100% of the new jobs over 

the last year.  Growing our economy and shrinking our budget 

deficit from the biggest among these nations to one of the 

smallest gives us the authority to speak and the credibility to 

be heard on the matters of discussion here.



Our partners are making progress, too.  The growth strategy we 

urged the world to adopt at the G-7 meeting in Tokyo last year 

is working.  The economy is recovering worldwide.  We produced 

a landmark GATT trade agreement, and Russia's economy is making 

progress as well, with lower inflation, a reduced deficit, and 

more and more people working in the private sector.



Now, in our meetings this year, on behalf of all the American 

people I am urging the G-7 leaders to keep the world recovery 

on track.  This weekend we will take steps on four fronts.



First and foremost, we will continue to work to spur growth and 

create jobs.  One of the most important ways to do that is for 

all of us to actually enact the Uruguay Round of the trade--

GATT agreement--this year.  Passing it this year--immediately--

will provide a shot in the arm for the world economy.



We must maintain this momentum toward a more open world 

economy.  I will urge my G-7 colleagues to review and analyze 

the remaining trade and investment barriers and to report back 

to us in Halifax next year.



But these meetings will go beyond the traditional concerns of 

G-7 summits to the traditional concerns of working people and 

their families.  We will address the education, the training, 

the job skills of our working people, building on the Jobs 

Conference in Detroit earlier this year.  This will be a 

historic first for the G-7.



Second, we will begin to build the telecommunications 

infrastructure of the new information-based global economy, 

without which we cannot take full advantage of our efforts to 

tear down trade barriers.



Third, we will focus on the explosive mix of overpopulation and 

environmental degradation that could overwhelm all of our own 

economic efforts.



Finally, we will continue to help the economies of Central and 

Eastern Europe through long-term reforms, trade, and 

investment.  As a priority, we plan to offer our support and 

advice to the Ukrainian Government on economic reform and on 

nuclear safety.  President Yeltsin will join in our political 

discussions for the first time this year as a full and equal 

participant.



We know these issues will not be resolved overnight.  But I 

have no doubt that, for every American and for people all over 

the world, we must work together to build these foundations of 

the future.  (###)







ARTICLE 2



A Vision of Economic and Institutional Renewal

Secretary of the Treasury Bentsen, Secretary Christopher

Opening statements at a news conference, Naples, Italy, July 9, 

1994



Secretary Bentsen.  Creating jobs:  That's been one of our 

major objectives here.  And I've certainly heard some good 

reports thus far.  They're talking about the G-7 having a 2.5% 

growth in its GDP.  That's sure a lot better than the 1% that 

we saw last year.



In some places that means getting into business for yourself.  

We're seeing that happen in Russia.  We're seeing the 

privatization of some 70,000 firms.  I never thought I'd see 

the day when approximately half of the GDP in Russia would be 

coming from private sources.



At this summit, it certainly did help to have the American 

economy in good shape.  I didn't feel the kind of peer pressure 

I felt at my first G-7 meeting in London when they said, now 

don't be telling us what to do about our economy until you get 

your own economy in shape.



To all of them, we could point out what we are doing about our 

budget deficit.  We came to Italy as the Ferrari of the 

economies--the fastest-growing one, the one that makes up some 

40% of the GDP, but insofar as growth, has three-quarters of 

it.  It won't be that way long.  That doesn't mean that ours is 

slowing down; it means that theirs is catching up.



Today, we have reaffirmed our strategy for growth, and we've 

done it because it's working.  The U.S. is going to keep 

cutting that budget deficit.  The strategy includes efforts by 

Europe to reduce its deficit so it can create the conditions 

for lower interest rates and by Japan to stimulate its economy.  

Nothing encouraged me more than the statement by Mr. Takemuri 

telling us that Japan is going to extend its cut on the income 

tax until it's assured that the economy is recovering well.



I thought our discussion on jobs was also useful.  The 

President put this one on the table, and I think the Europeans 

are glad he has..  On trade, the top priority was to complete 

the Uruguay Round of GATT.  I told my friends that I felt that 

the Congress would ratify it this year.  And as soon as I 

return to Washington that's what I'll be working to try to 

accomplish.



On Russia, I'm impressed with what it's achieving.  I look at 

that inflation rate.  It took the G-7 countries five years to 

lower the annual inflation rate from 4.4% to 2.3%.  And that 

was a tremendous accomplishment.  It's now the lowest that it's 

been in decades.  But the Russians have lowered their inflation 

from 20% per month--that's what it was last year--to under 5% 

last month.  They agreed to expand the amount of support--

support that the Russians will get as they proceed along the 

reform path, that will help them.  There is also new support to 

help other transforming economies now in the exchange markets.



Let me give you a sense of the discussion among the finance 

ministers.  We agreed that the underlying economic fundamentals 

are sound, and that the conditions for an enduring recovery 

with low inflation are now in place in each of our countries.  

We're all concerned.  We agreed that recent movements in 

exchange rates are not in line with the basic conditions 

prevailing in our economies.  And thus, as I've been saying, a 

stronger dollar would be desirable.



We look forward to increasing cooperation, and the one thing I 

don't telegraph is our future actions.  But we're prepared to 

act when it's appropriate.  We agreed to enhance the policy of 

coordination of the process.  You'll likely see more frequent 

meetings with our central bank colleagues to develop the 

responses to potential threats to recovery.  It'll also involve 

more cooperation among regulatory authorities to preserve the 

stability and the soundness of global financial markets.



Now let me end with this.  I want to credit President Clinton 

for making the G-7 a more user-friendly group.  We may be 

meeting in formal settings, but I am starting to see a more 

general discussion and more give-and-take and a more collegial 

spirit.



He did something else at this summit.  Fifty years ago, our 

leaders put in place institutions that contributed to a 

remarkable period of growth.  At this summit, the President 

began the process of creating an architecture for the next 50 

years, which Secretary Christopher will tell you more about 

now.  Now let me introduce to you a very good and able friend 

with a tough job, Secretary Christopher.



Secretary Christopher.  Thanks, Secretary Bentsen.  I really 

want to say at the outset how much our whole delegation has 

benefited from the wise leadership and sound counsel that Lloyd 

Bentsen always gives in this kind of a situation.  The leaders 

today made a number of important decisions, a number of things 

that would have a major impact on the world and the United 

States for years to come, but I particularly want to highlight 

one aspect of President Clinton's vision of leadership.  

Through his personal efforts, the leaders of the G-7 have 

agreed to take on one of the most important responsibilities 

that there is, and that is adapting and renewing the 

institutions we have to the new period ahead, to the 21st 

century.  This will be at the center of the agenda in Halifax.  

This was a very distinctive contribution of President Clinton--

both the ideas and the words.



As you know, from the beginning of his presidency, President 

Clinton has led the way to integrate the new market democracies 

of Central and Eastern Europe and of the New Independent 

States--integrate them into the structures and institutions of 

the West.



The trip we're taking has highlighted those priorities and also 

indicated the major strides that have already been made in this 

regard.  In Riga and Warsaw, the President provided new support 

and assistance to the countries of Central and Eastern Europe 

in their difficult transformation in an economic and political 

sense.



Tomorrow, we will continue our efforts to support reform and 

renewal in Russia.  We'll end this trip with the President's 

speech at Brandenburg Gate--a very vivid symbol of overcoming 

the divisions of Europe.  



I want to call your attention to a few of the achievements of 

this summit that are particularly relevant to our foreign 

policy.  We've reaffirmed our commitment to integrate Russia 

and the states of Central and Eastern Europe to the Western 

political and economic structures.  We've renewed and affirmed 

our commitment to ratify GATT this year.  We've recognized the 

importance of Ukraine's political and economic transformation 

into the future, into a fully integrated Europe.  We've taken 

particular steps to assist Ukraine in meeting its energy needs 

and in the closing of the Chernobyl reactor.



Finally, in preparing for President Yeltsin's historic 

participation in tomorrow's discussions, we have endorsed the 

efforts begun last year at Tokyo to encourage the remarkable 

economic transformation of Russia.  My own participation in 

this summit has concentrated on the discussions between the 

leaders on political issues.  This will be the focus of 

tomorrow's meeting when we'll be joined, of course, by 

President Yeltsin and Foreign Minister Kozyrev.



We'll cover a number of topics on the world's political agenda-

-NATO and the Partnership for Peace, North Korea, non-

proliferation, Bosnia, Haiti, Algeria--the whole compendium of 

important issues.



From our discussions at the ministerial level thus far, I can 

tell you there's a high degree of convergence between the 

nations of the G-7 on these subjects.  I look forward to 

further discussions and will be reporting to you further, 

tomorrow, on these subjects.  (###)







ARTICLE 3



Naples Summit Communique:  Working Together for Sustained 

Growth



Text of the communique issued by the Group of Seven (G-7) 

following the economic summit, Naples, Italy, July 9, 1994.



1.  We, the Heads of State and Government of seven major 

industrial nations and the President of the European 

Commission, have met in Naples on 8th-9th July 1994 for our 

20th meeting.



2.  We have gathered at a time of extraordinary change in the 

world economy.  New forms of international inter-action are 

having enormous effects on the lives of our peoples and are 

leading to the globalization of our economies.



3.  50 years ago, at Bretton Woods, visionary leaders began to 

build the institutions that provided our nations with two 

generations of freedom and prosperity.  They based their 

efforts on two great and abiding principles--democracy and open 

markets.



As we approach the threshold of the 21st century, we are 

conscious of our responsibility to renew and revitalize these 

institutions and to take on the challenge of integrating the 

newly emerging market democracies across the globe.



To carry out this responsibility, we have agreed that, in 

Halifax next year, we will focus on two questions:  (1)  How 

can we assure that the global economy of the 21st century will 

provide sustainable development with good prosperity and well-

being of the peoples of our nations and the world?  (2)  What 

framework of institutions will be required to meet these 

challenges in the 21st century?  How can we adapt existing 

institutions and build new institutions to ensure the future 

prosperity and security of our people?



Jobs and Growth



1.  A year ago, recovery was absent or hesitant in all our 

economies.  Today, encouraging results are emerging.  Recovery 

is under way.  New jobs have been created, and in more and more 

of our countries people are getting back to work.  Inflation is 

now at the lowest levels in over three decades and the 

conditions are in place for strong and lasting non-inflationary 

growth.  Therefore we reconfirm the growth strategy we agreed 

in Tokyo.  We call on our Finance Ministers to cooperate 

closely to keep recovery on track and we have asked them to 

enhance the on going process of multilateral surveillance and 

policy cooperation.  We also encourage stronger cooperation 

between our appropriate authorities to respond to the growing 

integration of the global capital markets.



2.  But unemployment remains far too high, with over 24 million 

unemployed in our countries alone.  This is an unacceptable 

waste.  It is particularly damaging when--as in many of our 

countries--it is concentrated among young people and those who 

have been out of work for a long time.



3.  Following the jobs conference in Detroit and the analysis 

of the OECD we have identified the actions we need to take.



--  We will work for growth and stability, so that business and 

individuals can plan confidently for their future.

--  We will build on the present recovery by accelerating 

reforms so as to improve the capacity of our economies to 

create jobs.



Both of these elements are essential in order to achieve a 

lasting reduction in the level of unemployment.



4.  We will concentrate on the following structural measures.  

We will:



--  increase investment in our people:  through better basic 

education; through improving skills; through improving the 

transition from school to work; through involving employers 

fully in training and--as agreed at Detroit--through developing 

a culture of lifetime learning;

--  reduce labour rigidities which add to employment's costs or 

deter job creation, eliminate excessive regulations and ensure 

that indirect costs of employing people are reduced wherever 

possible;

--  pursue active labour market policies that will help the 

unemployed to search more effectively for jobs and ensure that 

our social support systems create incentives to work;

--  encourage and promote innovation and the spread of new 

technologies including, in particular, the development of an 

open, competitive and integrated worldwide information 

infrastructure; we agreed to convene in Brussels a meeting of 

our relevant Ministers to follow up these issues.

--  pursue opportunities to promote job creation in areas where 

new needs now exist, such as quality of life, and protection of 

the environment.

--  promote competition, through eliminating unnecessary 

regulations and through removing impediments to small and 

medium-sized firms;



5.  For the implementation of this programme we call for the 

active involvement of business and labour and the support of 

our people.



6.  We are determined to press ahead with this action programme 

and will review the progress made towards realising our 

objectives of sustained growth and the creation of more--and 

better quality--new jobs.



Trade



1.  Opening markets fosters growth, generates employment and 

increases prosperity.



The signing of the Uruguay Round Agreements and the creation of 

the WTO are important milestones in postwar trade 

liberalisation.



2.  We are determined to ratify the Uruguay Round Agreements 

and to establish the WTO by January 1st, 1995 and call on other 

countries to do the same.



We are resolved to continue the momentum of trade 

liberalisation.  We call on the WTO, IMF, World Bank and the 

OECD to cooperate within their own areas of responsibility.



3.  On new international trade issues we encourage work under 

way in the OECD to study the interaction of international trade 

rules and competition policies.  We support the further 

development of international investment rules in order to 

remove obstacles to foreign direct investment.



4.  We welcome the work on the relation between trade and 

environment in the new WTO.  We call for intensified efforts to 

improve our understanding of new issues including employment 

and labour standards and their implications for trade policies.



5.  In our meeting next year we will review progress on these 

issues.



Environment



1.  Environment is a top priority for international 

cooperation.  Environmental policies can contribute to 

enhancing growth, employment and living standards, for example 

through investments in appropriate technologies, energy 

efficiency improvements and cleaning-up polluted areas.



2.  We urge the multilateral development banks to continue 

making progress in promoting local participation and 

incorporating environmental considerations into their 

programmes.



3.  We support the work of the Commission on Sustainable 

Development in reviewing progress in the implementation of the 

Rio process.  We look forward to the implementation of the 

Conventions already concluded, in particular those on 

biological diversity and climate-change and in this respect we 

will work for the success of the forthcoming Conferences on 

these subjects in Nassau and Berlin.



4.  We welcome the restructuring and the replenishment of the 

Global Environment Facility (GEF) and we support its choice as 

the permanent financial mechanism of these two Conventions.



We welcome the recent conclusion of the Convention on 

Desertification and the results of the Conference on Small 

Islands, which add to the framework agreed in Rio.



5.  We are determined to speed up the implementation of our 

national plans called for under the Rio Climate Treaty and we 

will each report what we have achieved at next year's Summit.  

We also recognize the need to develop steps for the post-2000 

period.



Developing Countries



1.  We welcome the economic progress of many developing 

countries.  We are concerned, however, by the stagnation and 

continued poverty in some countries, particularly in Africa.  

Since rapid population growth has aggravated poverty in many 

countries, we stress the importance of a positive outcome of 

the Cairo Conference on Population and Development.



2.  We are committed to continue our efforts to enhance 

development assistance as well as promoting trade and 

investment in developing countries.



We are encouraged by significant private capital flows to 

developing countries and by the efforts of many of these 

countries, particularly in Latin America and Asia, to increase 

trade among themselves.



We call on the World Bank as well as the regional development 

banks to strengthen their efforts to reinforce private capital 

flows to the developing world while providing growing resources 

for health, education, family policies and environmental 

protection.



We encourage the Paris Club to pursue its efforts to improve 

the debt treatment of the poorest and most indebted countries.  

Where appropriate, we favour a reduction in the stock of debt 

and an increase in concessionality for those countries facing 

special difficulties.



We welcome the renewal of the ESAF and the measures under 

consideration by the IMF to increase support to developing 

countries and to ensure that all members take part in the SDR 

system.  In addition we agree to explore ways to mobilize more 

effectively the existing resources of the International 

Financial Institutions to respond to the special needs of 

countries emerging from economic and political disruption and 

the poorest most indebted countries.



3.  In the Middle East, economic development is essential to 

underpin the peace process.  Thus, along with others, we are 

providing financial and technical assistance to the Palestinian 

Authority and are working to promote cooperation and 

development in the  region. We call for an end to the Arab 

boycott of Israel.



We warmly welcome South Africa's transition to full democracy.  

This will open up new opportunities for trade and inward 

investment.  We will provide further assistance to help 

strengthen economic and social development, in particular for 

the poorest groups.  Not only the people of South Africa but 

also her regional neighbours have much to gain from steady 

economic policies that unlock her full potential.  We also 

welcome the adjustment measures taken by the countries in the 

CFA Franc area after the recent devaluation and the prompt 

support from the International Community.



Nuclear Safety



1.  We welcome the progress made in the nuclear safety 

programme, agreed by the Munich and Tokyo summits, concerning 

the countries of Central and Eastern Europe and former Soviet 

Union.



2.  An effective framework for coordinated action is now in 

place.  The World Bank, working with other leading institutions 

including the EBRD and the EIB, and with the IEA, is helping 

countries develop long term energy strategies.  Some near-term 

safety improvements are on the way.  More needs to be done and 

longer term actions must be carried out.  The IFIs are invited 

according to their mandate to make full use of their lending 

possibilities for this purpose.



3.  We remain committed to the existing international 

initiatives to promote an early closure of high risk reactors.  

The closing down of the Chernobyl nuclear power plant is an 

urgent priority.  We are therefore putting forward to the 

Ukrainian Government an action plan for the closure of 

Chernobyl.  This plan will require measures to be taken by the 

Ukrainian authorities as well as financial contributions from 

the international community.



The closure of Chernobyl would be accompanied by the early 

completion of three new reactors to adequate safety standards, 

by comprehensive reforms in the energy sector, increased energy 

conservation and the use of other energy sources.



4.  In this context we welcome the contribution by the European 

Union.  As a future step we are ready to provide for the Action 

Plan an initial amount of up to US $200 million in grants, 

including a replenishment of the Nuclear Safety Account for 

this purpose.  In addition loans should be provided by the 

IFIs.  We call on other donors and international financial 

institutions to join us in supporting this action plan and will 

review progress regularly.



Ukraine



We wish to see a stable and independent Ukraine.



We welcome the Trilateral Statement, Ukraine's ratification of 

the START I Treaty, and steps to remove nuclear weapons.  We 

look forward to Ukraine's accession to the NPT as a non-nuclear 

weapon State.



But we are deeply concerned about the economic situation.  

Genuine reform is the only way to improve the economy.  We urge 

the Ukrainian Government to design and implement rapidly 

stabilization and structural reforms, including price 

liberalization and privatization.  This would provide the basis 

for IMF lending and for substantial loans by the World Bank and 

the EBRD.  We are committed to support comprehensive reform 

efforts through substantial technical and financial assistance 

and by facilitating improved access to our markets for 

Ukrainian products.



With a renewed commitment to comprehensive market reform, 

Ukraine could gain access to international financing of over $4 

billion in the course of a two year period following the 

commencement of genuine reforms.



We endorse the proposal for a conference on Partnership for 

Economic Transformation in Ukraine to be held in Canada before 

our next meeting.



Russia



1.  We recognize the historical dimension of the reform process 

in Russia.  We are encouraged by the commitment to reform, both 

political and economic, of the Russian leadership and by the 

progress made so far.



2.  The approach we endorsed in Tokyo last year is producing 

results.  We welcome the agreement with the IMF on an economic 

programme and the recent series of loan agreements with the 

World Bank and the EBRD.  We encourage Russia to work with the 

International Financial Institutions to stabilize the economy, 

reinforce the reform process, and reduce social hardship.



The increases in IMF limits, provision of SDRs to new IMF 

members and acceleration of World Bank lending that are now 

under consideration will significantly augment the ability to 

support Russian reform efforts.  The recently agreed 

comprehensive rescheduling of Russia's 1994 debt obligations 

will also help.



We continue to look to the Support Implementation Group to help 

remove practical obstacles in Russia to our support efforts.



3.  Mobilizing domestic savings for productive use and 

attracting foreign direct investment will be crucial to the 

success of Russia's reforms.  We therefore urge Russia to 

improve the legal and institutional framework for private 

investment and for external trade.  We ourselves will continue 

to work with Russia towards GATT membership, in order to 

advance Russia's integration into the world economy and further 

improve access to our markets for Russian products.



4.  We will continue to support reform in Russia.



Other Countries in Transition



We welcome the progress made and reaffirm our support for the 

reform efforts of the countries in transition.



In particular, we commend the political and economic 

transformation of the Central and Eastern European Countries 

and support their integration into free market.



Cooperation Against Transnational Crime and Money-laundering



1.  We are alarmed by the growth of organized transnational 

crime, including money laundering, and by the use of illicit 

proceeds to take control of legitimate business.  This is a 

world-wide problem with countries in transition increasingly 

targeted by criminal organisations.  We are determined to 

strengthen international cooperation to address this situation.



We welcome the UN Conference on Organized Transnational Crime 

to be held in Naples next October.



2.  On money-laundering, we recognize the achievements of the 

FATF, which we set up in 1989, and reaffirm our support for its 

continued work over the next five years.  In order to achieve 

our goal, we agree that counter-measures need to be implemented 

by FATF members and other countries with significant financial 

centres.  Ultimate success requires that all Governments 

provide for effective measures to prevent the laundering of 

proceeds from drug trafficking and other serious crime or 

offences which generate a  significant amount of proceeds.



3.  We urge countries to adopt necessary legislation wherever 

appropriate.



Next Summit



Our discussions this year have convinced us of the benefits of 

a less formal summit procedure, as we agreed in Tokyo last 

year.  In Naples, we have been able to have a freer exchange of 

views and to forge a closer understanding between us.  Next 

year we look forward to an even more flexible and less formal 

summit.



We have accepted the invitation of the Prime Minister of Canada 

to meet in Halifax in [June] 1995.  (###)







ARTICLE 4



G-7 Plus One Chairman's Statement:  Progress Toward a More 

Secure and Humane World



Following is the text of a statement issued after the G-7 Plus 

One political meeting, Naples, Italy, July 10, 1994.



1.  This occasion has been given added meaning by the full 

participation in the political discussions of the President of 

the Russian Federation.  This partnership, which is a 

reflection of the reforms that have taken place in Russia, 

reaffirms our wish to tackle together today's problems in a 

constructive and responsible manner.



2.  We strongly believe that the parties to the Bosnian 

conflict should accept the plan presented to them on July 6th 

in Geneva.  We urge them to do so before July 19th.  If the 

opportunity is not seized, there is a grave risk of renewal of 

war on a larger scale.  The parties should refrain from any 

military action.



We shall ensure that the measures made known to the parties in 

the event of either acceptance or refusal are implemented.



We support the Action Plan undertaken by the UN for the 

rehabilitation of Sarajevo and we welcome the signature on July 

5th by the European Union and the parties concerned of the 

Memorandum of Understanding on the EU administration of Mostar.



Concerning the UN protected areas in Croatia, we urge 

compliance with the cease-fire, the resumption of talks and the 

mutual recognition of existing borders.



3.  Following the death of Kim Il Sung, we must continue to 

seek a solution to the problem created by North Korea's 

decision to withdraw from the IAEA.  We urge the DPRK to 

continue to engage the ROK and the international community, 

including a continuation of the talks with the US and going 

forward with the scheduled summit with the ROK.  We also urge 

the DPRK to provide total transparency in its nuclear program 

through full and unconditional compliance with its non-

proliferation obligations and to remove, once and for all, the 

suspicions surrounding its nuclear activities.  We support the 

renewed efforts to resolve the North Korean nuclear issue 

through dialogue and we stress the importance of the DPRK's 

ensuring the continuity of IAEA safeguards and maintaining the 

freeze on its nuclear program, including no reprocessing spent 

fuel or reloading its nuclear reactors.



4.  We have welcomed the Israeli-Palestinian Declaration of 

Principles and the signing of the Gaza-Jericho agreement as a 

first step in its implementation.  We recognize the need to 

speed up the delivery of assistance and create the 

circumstances for a real improvement of living conditions.  

Progress on the other bilateral tracks and in the multilateral 

negotiations is now essential in order to achieve a lasting and 

comprehensive settlement of the Arab-Israeli dispute and a 

wider process of peace and cooperation in the whole Middle 

East/Mediterranean region.  We call upon the League of Arab 

States to end their boycott of Israel.  We support the efforts 

of reconstruction of a prosperous and independent Lebanon.



We reiterate our resolve to enforce full implementation of each 

and every relevant UN Security Council resolution concerning 

Iraq and Libya until they are complied with, and recall that 

such implementation would entail the reassessment of sanctions.



We call upon the government of Iran to participate 

constructively in international efforts for peace and stability 

and to modify its behavior contrary to these objectives, inter 

alia with regard to terrorism.



We support the Algerian government's decision to move forward 

on economic reforms, which must be pursued with determination, 

while urging Algerian leaders to continue a political dialogue 

with all elements of Algerian society rejecting violence and 

terrorism.  We condemn the recent massacre of Italian sailors 

and other victims, and express our condolences to their 

families.



We call upon the government of the Republic of Yemen to resolve 

political differences within the country through dialogue and 

by peaceful means, and to ensure that the humanitarian 

situation, particularly in and around Aden, is addressed.  

International obligations, including sovereignty and 

territorial integrity, should be respected.



5.  Responding to the recent call by the Secretary General of 

the United Nations, we have devoted special attention to the 

situation in the African continent.  We salute the achievement 

of the people of South Africa in ending apartheid by 

constitutional means, committing ourselves to assist the new 

government in its efforts to construct a stable and prosperous 

democracy.  At the same time we are painfully aware of the 

humanitarian tragedy affecting many African countries and we 

will do our utmost to help them.  We are particularly appalled 

by the situation in Rwanda and call for uninterrupted 

continuation of the commendable humanitarian action carried out 

by France through the rapid deployment of UNAMIR II.  We urge a 

stable cease-fire leading to a political settlement and an 

increased and urgent humanitarian effort.  We support efforts 

to implement the settlement in Angola.



6.  We demand that the military leadership in Haiti comply 

fully with all relevant UN resolutions and allow a restoration 

of democracy and the return of the democratically elected 

government of President Aristide.  We call upon all states to 

bring pressure on the de facto regime as well as to enforce 

strengthened UN measures in relation to Haiti.



7.  Proliferation of weapons of mass destruction and missiles 

is one of the most serious threats to international peace and 

security.  We call upon all States that have not yet done so to 

accede to the NPT as non-nuclear weapon states.  We declare our 

unequivocal support for the indefinite extension of the Treaty 

in 1995.  We underline the importance of continuing nuclear 

arms reduction, and confirm our commitment to achieve 

universal, verifiable and comprehensive Treaties to ban nuclear 

tests and the production of fissile material for nuclear 

weapons.  We reaffirm our commitment for the earliest possible 

entry into force of the Chemical Weapons convention and welcome 

the Special Conference of States parties to the Biological and 

Toxin Weapons Convention.  We support full implementation of 

the UN Register of Conventional Arms.  We agree to cooperate to 

prevent nuclear smuggling.  We assign priority to the problems 

of anti-personnel landmines, including efforts to curb their 

indiscriminate use, halt their export, assist in their 

clearance worldwide.  We shall work together and with others 

for effective export controls to ensure that trade in armaments 

and sensitive dual-use goods is carried out responsibly.  We 

encourage non-proliferation efforts in the Middle East and 

South Asia.



8.  The UN  has a central role in preventive diplomacy as well 

as in peace-keeping, peace-making, post-conflict peace-

building.  It is essential that all such activities be fully 

mandated, effectively planned and organized, and be financed to 

meet the demands placed on them.  All UN members have clear 

responsibilities in that regard and must fulfill them.  Arrears 

must be eliminated and dues paid promptly and in full, while a 

more equitable scale of assessments should reflect changes in 

the world economy and in UN membership.  The UN reform must 

continue in order to ensure efficiency, streamlining of 

functions and cost effectiveness.



Regional organizations can make a significant contribution in 

the field of preventive diplomacy and peace-keeping, fully 

consistent with the UN Charter as well as relevant CSCE 

documents.  We stress the importance of the consent of all 

parties in peacekeeping operations, and reiterate the need to 

respect in all cases sovereignty and territorial integrity.  We 

also emphasize that a mandate is to be sought from the UN when 

peacekeeping forces can be confronted with the need to use 

force beyond the requirements of self-defense.



The CSCE Budapest summit in December should be an important 

land- mark in the process of enhancing the CSCE's role and 

capabilities.  We support the conclusion of the Pact of 

Stability aimed at promoting good relations in Europe.



In the Asia/Pacific area, we welcome the beginning of regional 

security dialogue, in particular in the ASEAN Regional Forum.



9.  We support the improvement of international monitoring 

mechanisms and procedures for the promotion and protection of 

human rights everywhere, including the rights of persons 

belonging to national minorities, and pledge our support for 

the newly created office of UN High Commissioner for Human 

Rights.  We are determined to strengthen efforts to combat 

racism, racial discrimination, xenophobia, aggressive 

nationalism, antisemitism and other forms of intolerance.



The international community should equip itself with more 

efficient means to respond in a prompt way to humanitarian 

emergencies world-wide.  We shall seek to improve our 

capabilities through the UN and other appropriate mechanisms to 

fulfill such requirements.



10.  We condemn terrorism in all its forms, especially when 

state-sponsored, and reaffirm our resolve to cooperate in 

combating it with determination.  We call upon all countries 

involved to renounce support for terrorism, including financial 

support, and to take effective action to deny the use of their 

territory to terrorist organization.



We stress that organized crime and narcotics trafficking are a 

threat to political as well as economic and social life, and we 

call for increased international cooperation.  We have agreed 

that the proposed world ministerial conference to be held in 

October in Naples at the initiative of the Italian government 

will be a most important occasion to advance such cooperation.



11.  The meeting has also given us the opportunity for an 

exchange of views on the reform process in Russia, a historic 

task that President Yeltsin and the Russian government continue 

to bring forward with the confirmed support of the 

international community.  President Yeltsin presented Russia's 

views on global economic and security issues.  We intend to 

cooperate on such topics as transnational crime, money 

laundering, and nuclear safety.



12.  Looking forward to Halifax, we shall continue to cooperate 

closely in order to increase the conditions for maintaining 

peace and stability in the world.  (###)







ARTICLE 5



Russia and the G-7 Summit:  Shared Goals and Common 

Understandings

President Clinton, Russian President Yeltsin

Opening statements at a news conference, Naples, Italy, July 

10, 1994



President Clinton.  Good afternoon.  As you know, this was a 

very important day in which President Yeltsin joined us as a 

full partner in the G-8 for political discussions.  We followed 

that meeting with a bilateral meeting--continuing our good 

personal relation- ship--which made some significant progress.



I would like to make a few comments on the G-8 and on our 

bilateral meeting and then have President Yeltsin make any 

statement he would like to make.  And, of course, we will take 

some questions.



First of all, today's statement, read by Chairman Berlusconi on 

behalf of all eight of us, makes it clear that we share 

fundamental foreign policy goals:  support for democracy, free 

markets, and building new security relationships.  On these 

matters, we spoke as one.  If you read each of the items in 

that statement, I think it is remarkable that these eight 

countries have together agreed on these things.



In the wake of the death of Kim Il Sung, we also expressed our 

strong commitment to continuing talks with North Korea and our 

support for the holding of the summit which had previously been 

scheduled between leaders of North and South Korea.  We also 

strongly agreed on the importance of pushing ahead with a 

resolution of the crisis in Bosnia.



Finally, the United States and Russia joined all of the nations 

in expressing regret over the death of the Italian sailors at 

the hands of terrorists in Algeria and reaffirmed our 

opposition to terrorism anywhere, anytime.



With regard to my meeting with President Yeltsin, let me just 

mention one or two issues.  First of all, there has been a 

promising development in the Baltics.  After my very good 

discussion with the President of Estonia, Mr. Meri, I passed on 

his ideas to President Yeltsin today in an effort to break the 

impasse between the two nations over troop withdrawals.



I believe the differences between the two countries have been 

narrowed and that an agreement can be reached in the near 

future so that troops would be able to withdraw by the end of 

August.  But now that is a matter to be resolved between 

President Yeltsin and President Meri, to which President 

Yeltsin has promised to give his attention and for which I am 

very grateful.



When the Russian troops withdraw from the Baltics and Germany, 

it will end the bitter legacy of the Second World War.  I want 

to say publicly here that none of this could have been 

accomplished without the emergence of a democratic Russia and 

its democratic president.  And I thank President Yeltsin for 

that.



We talked about Ukraine--its importance to Russia, to the 

United States, to the future.  We agreed on continuing to work 

on the issues that we all care about, including economic 

reform, and continuing to implement the agreement on 

denuclearization which, so far, has been implemented quite 

faithfully.  We talked about our security relationship, and I 

must say again how pleased I am that Russia has joined the 

Partnership for Peace. 



And finally, I would like to congratulate President Yeltsin on 

the remarkable, steadfast success of his economic reform 

efforts.  Inflation is down.  The Russian deficit is now a 

smaller percentage of annual income than that of some other 

European countries.  Over half the workers are now in the 

private sector.  There's a lot to be done, and the rest of us 

have our responsibilities, as well.  And we talked a little bit 

about that and what the United States could do to increase 

trade and investment.



Looking ahead, I have invited President Yeltsin to come to 

Washington to hold a summit with me and to have a state visit 

on September 27 and 28, and he has accepted.  I am confident 

that would give us a chance to continue the progress we are 

making and the friendship we are developing.  Mr. President.



President Yeltsin.  Thank you, Mr. President Bill Clinton, for 

the kind words that you said toward Russia and its President.  



I, of course, am very satisfied by the summit--the political 

eight--which has taken place today.  I think that this, of 

course, is just a beginning.  But as I said, the Russian bear 

is not going to try to break his way through an open door, and 

we are not going to force ourselves into the full G-8 until it 

is deserved.  When our economic system becomes coordinated with 

the economic systems of the other seven countries, then it will 

be natural and then Russia will enter as a full-fledged member 

of the eight.



Nonetheless, I am grateful to the chairman--Prime Minister of 

Italy, Mr. Berlusconi--and to all the heads of the states of 

the seven for the attention which they showed toward Russia--

the welcome, including yesterday's statement by the chairman 

and today's statement on political issues.  



Together, today, we held a discussion on political, 

international issues around the world, and we found common 

understanding which says a lot about the fact that we can find 

this mutual understanding and, in realistic terms, cooperate 

and help in the strengthening of peace on this planet.



I believe that this meeting and--yesterday's, I mean--and 

today's is yet another large step toward the security of 

Europe, for a much more economically stable situation and an 

order in which, really, the world can live in peace and in 

friendship.  We should all help in this endeavor, and I think 

this meeting is yet another large step to the full security of 

peace on Earth.



In developing my thoughts, I wanted to add that this meeting 

was a meeting--bilateral meeting--that we had with the 

President of the United States, Bill Clinton.  Our meetings are 

always held in a very dynamic and interesting way.  We get very 

specific.  We don't have a lot of philosophizing there now.  

Say if it's 1:15pm, 1:20pm, we get in and start discussing 

about  30-35 different issues at least--on one side, on the 

other side.  And we find--of necessity we sit down and we find 

some kind of compromise solution to find an answer.



And I have to say, yet again, this time, we were able to 

summarize--after the last summit meeting, where Bill came to 

Russia, we were able to summarize all the things that happened.  

Many, many things took place, very positive things, and we 

expressed satisfaction about the fact that our relationship is 

developing and growing-- our partnership, our friendship, our 

cooperation. 



At the same time, of course--as people who are sincere--both of 

us could not but touch upon some of the issues which, 

unfortunately, are yet unresolved, which, still, we could not 

have found answers to up until now.  This has to do with 

certain discrimination toward Russia in trade, for example.  



This time at the eight Russia did not ask for money.  It said--

I said--that you--let's all together take certain measures and 

steps and decisions in your individual countries, included 

among them the United States of America, so that Russia, on an 

equal basis--equal basis--could trade with everybody.  We are 

not asking for any preferential conditions, we are not asking 

for any special circumstances for us alone.  No.  We are saying 

let's give us equal rights, get rid finally--once and for all--

of this red jacket.  Take that red jacket from the President of 

Russia--which I have not worn now for three years; I have taken 

that red, besmirched jacket off of myself.  You understand what 

I am talking about, right?   You understand.   (###)







ARTICLE 6



Fact Sheet:  Economic Summits, 1981-1994



Leaders of Group of Seven (G-7) industrial countries--the 

United States, Japan, Germany, France, Italy, the United 

Kingdom, and Canada--plus the President of the European 

Commission, have discussed and made decisions on a wide range 

of international economic and political issues at economic 

summit meetings that have been held annually since 1975.  The 

following information provides background on each of the 14 

summits since 1981.



Naples

July 8-9, 1994



Summary



At the Naples summit, G-7 leaders expressed satisfaction at 

growing evidence of recovery, with inflation at its lowest 

level in more than three decades.  To combat an "unacceptable" 

level of unemployment, however, they outlined an action plan to 

sustain growth and create more and better quality jobs by 

increasing education and training, encouraging technological 

innovation, and creating opportunities in new areas such as 

environmental protection.   They also recognized the need to 

adapt the institutions established at Bretton Woods to meet the 

challenges of the 21st century and agreed to focus on this 

issue at the next summit meeting.  For the first time, 

President Yeltsin participated fully in the political 

discussions.



Economic Accomplishments



--  Pledge to review progress in meeting objectives of the 

action program to reduce unemployment.

--  Call for all countries to ratify the Uruguay Round 

agreements and to establish the World Trade Organization by 

January 1, 1995.

--  Pledge to make available to Ukraine more than $4 billion in 

international financing provided it undertakes comprehensive 

market reforms.

--  Reaffirmation of the commitment to enhance development 

assistance and promote trade and investment in developing 

countries.



Political Accomplishments



--  Approval of a grant of $200 million for an action plan to 

close the Chernobyl nuclear power plant.

--  Pledge to continue to support GATT membership for Russia 

while recognizing Russia's need to improve the legal and 

institutional framework for private investment and for external 

trade. 

--  Call on the warring parties in Bosnia to accept the July 6, 

1994, peace plan.

--  Call for North Korea to provide total transparency in its 

nuclear program through unconditional compliance with its non-

proliferation obligations. 

--  Demand that the military leadership in Haiti step down and 

allow the restoration of democracy.

--  Support for a positive outcome of the Cairo Conference on 

Population and Development.

--  Recognition of the need to speed up the delivery of 

assistance to Palestinians in the areas of Gaza and Jericho and 

a call for the lifting of the trade boycott against Israel by 

Arab states.

--  Declaration of unequivocal support for an indefinite 

extension of the nuclear Non-Proliferation Treaty in 1995 and a 

call for all states which have not yet done so to accede to the 

treaty. 





Tokyo

July 7-9, 1993



Summary



The Tokyo summit noted that, despite remarkable progress toward 

democratization and market economies since the previous summit, 

considerable challenges remained for the industrialized nations 

in achieving economic recovery and job creation, integrating 

countries in transition into the world economy, assisting 

developing countries, and reconciling global growth and 

attention to the environment.  Leaders underscored their 

determination to enhance international cooperation, in 

particular by strengthening multilateral institutions, in an 

effort to create a more secure and humane world.  Leaders also 

agreed to work to streamline the summit process to make it more 

responsive to major issues of common concern.  This was the 

first economic summit meeting attended by President Clinton.  

Russian President Boris Yeltsin participated in meetings with 

G-7 leaders on the third day of the summit.



Economic Accomplishments



--  Commitment by all countries to implement a mutually 

reinforcing strategy to encourage global growth and job 

creation, including prudent macroeconomic policies to promote 

non-inflationary sustainable growth and structural reforms to 

improve the efficiency of markets.

--  Endorsement of recent significant progress toward a large 

market access package as a major step toward completion of the 

Uruguay Round of the GATT multilateral trade negotiations by 

the end of 1993.

--  Reaffirmation of support for economic reform efforts in 

Central and Eastern Europe, the Baltic states, the New 

Independent States of the former Soviet Union, and Mongolia.  

Creation of a $3-billion special Privatization and 

Restructuring Program for Russia and establishment of a Support 

Implementation Group in Moscow to improve delivery of 

assistance.

--  Determination to publish national action plans by the end 

of 1993 to implement objectives outlined at the 1992 UN 

Conference on Environment and Development to secure 

environmentally sustainable development.

--  Emphasis on the urgent need to coordinate safety measures 

as agreed in 1992 in Munich, with a view toward establishing a 

framework for coordinated action by those countries concerned.

--  Commitment to pursue a comprehensive approach to 

development assistance, based on the requirements and 

performance of individual countries, and integrating aspects of 

trade, investment, and debt strategy, as well as assistance.



Political Accomplishments



--  Support for efforts to strengthen the UN's capacity for 

preventive diplomacy, as well as its peace-keeping and peace-

making roles.

--  Pledge to oppose terrorism and to devote more attention to 

the problems posed by increasing numbers of displaced persons 

and refugees.  Recognition of the protection of human rights as 

the responsibility of all countries as affirmed by the World 

Conference on Human Rights.

--  Call for enhanced cooperation to combat the proliferation 

of weapons of mass destruction, including universal adherence 

to the nuclear Non-Proliferation Treaty (NPT), the Chemical 

Weapons Convention, and the Biological Weapons Convention.  

Call for North Korea to change its decision to withdraw from 

the nuclear Non-Proliferation Treaty and to comply with 

International Atomic Energy Agency safeguards on agreement to 

denuclearize the Korean Peninsula.

--  Support for the indefinite extension of the NPT in 1995.

--   Pledge to ensure effectiveness of the UN Register of 

Conventional Arms.

--  Pledge to continue strengthening the Missile Technology 

Control Regime and to bolster exports.

--  Reaffirmation of commitment to the territorial integrity of 

Bosnia-Herzegovina and to a negotiated settlement based on the 

principles of the London Conference.  Commitment to assist in 

the implementation of UN Security Council Resolution 836 

establishing safe havens.

--  Expression of concern about aspects of Iran's behavior.

--  Reiteration of the call to end the Arab boycott of Israel.

--  Support for Russian reform efforts under President Yeltsin 

and for the reform process in Ukraine.

--  Support for recent progress toward non-racial democracy in 

South Africa.

--  Support for restoration of legitimate authorities in Haiti 

and for UN and OAS efforts in this regard.        





Munich

July 5-7, 1992



Summary



Leaders at the Munich summit emphasized the necessity of 

achieving stronger world economic growth as a prerequisite for 

solving the problems of the post-Cold War era.  Concern over 

lack of progress in the global trade negotiations, the future 

of high-risk nuclear reactors still operating in the former 

Soviet republics, and the civil war in the former Yugoslavia 

dominated the discussions.  Russian President Boris Yeltsin 

joined G-7 leaders at the close of the summit to review the 

pace of reform efforts in his country.



Economic Accomplishments



--  Pledge to work collectively and individually to promote 

sustainable world economic growth, encourage investment, and 

create new employment opportunities.

--  Support for conclusion of the Uruguay Round of multilateral 

trade negotiations by the end of 1992.

--  Call for the New Independent States of the former Soviet 

Union to continue economic reform policies aimed at building 

market economies.  Support for financial credits and a debt 

rescheduling program for Russia and creation of consultative 

groups for Russia and other New Independent States.

--  Pledge to continue efforts to increase the quality and 

quantity of official development assistance in accordance with 

existing commitments, with emphasis on the poorest countries.



Political Accomplishments



--  Pledge to continue shipments of humanitarian aid to Bosnia-

Herzegovina, combined with support for more vigorous 

enforcement of UN Security Council sanctions against Serbia-

Montenegro, including the use of military force if necessary.

--  Agreement on the need to safeguard nuclear materials and to 

prevent the transfer or illicit production of nuclear weapons.

--  Establishment of a multilateral program to improve the 

safety and management of Soviet-design nuclear power plants.

--  Recognition of the progress of the states in Central and 

Eastern Europe in achieving economic and political reform and a 

call for increased investment by the industrialized countries 

to supplement these efforts.

--  Support for the role of the United Nations in maintaining 

international peace and security and recognition of the need to 

strengthen the conflict prevention and crisis management  

capabilities of the Conference on Security and Cooperation in 

Europe.

--  Call for all countries to carry forward the momentum of the 

UN Conference on Environment and Development by publishing 

national action plans by the end of 1993; providing additional 

technical and financial assistance to developing countries; and 

implementing commitments on climate change, protection of 

forests and oceans, and preservation of marine resources.





London

July 15-17, 1991



Summary



The London summit emphasized the need to strengthen the 

international order following the revolutions in Central and 

Eastern Europe and the intervention against Iraq in the Persian 

Gulf.  Looking ahead to the upcoming UN Conference on 

Environment and Development in 1992, participants pledged 

support for a variety of initiatives designed to integrate 

environmental considerations into government policies.  A 

unique feature of the London meeting was the special invitation 

to Mikhail Gorbachev to meet at the conclusion of the summit 

with the heads of the G-7 industrialized countries.  Talks 

focused on the economic situation in the Soviet Union.



Economic Accomplishments



--  Recognition of the successful efforts of the Paris Club to 

negotiate debt reduction packages for lower middle-income 

countries to improve their potential for economic growth.

--  Commitment to secure stable, worldwide energy supplies, 

remove barriers to energy trade and investment, encourage high 

environmental and safety standards, and promote international 

cooperation on research and development in these areas.

--  Agreement on the necessity of enhancing both the quality 

and quantity of support for priority development issues, such 

as alleviating poverty,  improving health education and 

training, and providing additional debt relief for the least-

developed countries.



Political Accomplishments



--  Commitment to continued support for reform efforts in 

Central and Eastern Europe and to the integration of these 

countries into the international economic system.

--  Commitment to achieve a frame-work convention on climate 

change and a preliminary agreement on the management, 

conservation, and sustainable development of forests prior to 

the UN Conference on Environment and Development in June 1992.

--  Pledge to promote mobilization of financial resources to 

assist developing countries with environmental problems, 

support stronger international efforts to deal with 

environmental disasters, and increase cooperation in 

environmental science and technology.





Houston

July 9-11, 1990



Summary



The Houston summit was held against the backdrop of movement 

toward democracy and freer markets in many parts of the world, 

including elections in Central and Eastern Europe and 

Nicaragua, momentum toward German unification, and political 

reforms in the Soviet Union.  The summit leaders agreed on most 

international economic and political issues, but intense 

discussions were needed on agricultural subsidies in the 

Uruguay Round of multilateral trade negotiations, economic 

assistance to the Soviet Union, and global warming before 

consensus could be reached.



Economic Accomplishments



--  Agreement on progressive reductions in internal and 

external support and protection of agriculture and on a 

framework for conducting agricultural negotiations in order to 

successfully conclude by December 1990 the Uruguay Round of 

multilateral trade talks under the auspices of the General 

Agreement on Tariffs and Trade (GATT).

--  Request to the International Monetary Fund (IMF), the World 

Bank, the Organization for Economic Cooperation and 

Development, and the European Bank for Reconstruction and 

Development to undertake, in close coordination with the 

European Community (EC), a study of the Soviet economy to make 

recommendations, to establish the criteria under which Western 

economic assistance could effectively support Soviet reforms, 

and to submit a report by the end of 1990.

--  Support for aid to Central and East European nations that 

are firmly committed to political and economic reform, 

including freer markets, encouragement of foreign private 

investment in those countries, and improved markets for their 

exports by means of trade and investment agreements.

--  Pledge to begin talks, to be completed by 1992, on a global 

forest convention to protect the world's forests.



Political Accomplishments



--   Promotion of democracy throughout the world by assisting 

in the drafting of laws, advising in fostering independent 

media, establishing training programs, and expanding exchange 

programs.

--  Endorsement of the maintenance of an effective 

international nuclear non-proliferation system, including 

adoption of safeguards and nuclear export control measures, and 

support for a complete ban on chemical weapons.





Paris 

July 14-16, 1989



Summary



The Paris summit marked the celebration of the 200th 

anniversary of the French Revolution and the Declaration of the 

Rights of Man.  It also was the first economic summit meeting 

for President Bush, who had just returned from trips to Poland 

and Hungary.  These developments reinforced for the summit 

leaders the importance of supporting political and economic 

reform in Eastern Europe.  The leaders also expressed strong 

concern about environmental and narcotics issues; at least one-

third of the economic declaration dealt with the environment.



Economic Accomplishments



--  Agreement on several multilateral trade issues, including a 

pledge to make effective use of the GATT dispute settlement 

mechanism, to avoid new restrictive trade measures inconsistent 

with the GATT, and to make further substantial progress in the 

Uruguay Round in order to complete it by the end of 1990.

--  Commitment to a strengthened debt strategy that relies, on 

a case-by-case basis, on such actions as economic reforms by 

developing countries, more resources by a financially stronger 

World Bank and by the IMF, continued debt rescheduling by 

creditor governments, and more voluntary, market- based debt 

reductions by commercial banks.

--  Continued cooperation in foreign exchange markets.

--  Support for ending as soon as possible and not later than 

the end of the century the production and consumption of 

chlorofluorocarbons covered by the Montreal Protocol on 

Substances that Deplete the Ozone Layer.

--  Commitment to limit the emissions of carbon dioxide and 

other greenhouse gases as well as conclusion of an 

international framework convention on global climate change.

--  Support for the preservation of tropical forests and 

condemnation of the practice of dumping waste in the oceans.



Political Accomplishments



--  Call for a meeting of all interested parties to discuss 

concerted assistance to Poland and Hungary and a request that 

the EC coordinate these efforts.

--  Support for effective programs to stop illegal drug 

production and trafficking, including assistance to the anti-

drug efforts of producing countries and the United Nations, 

increased international cooperation to seize drug proceeds and 

prevent money laundering, and support for a 1990 international 

conference on cocaine and drug demand reduction.

--  Continued strong condemnation of international terrorism by 

states, including hostage taking and attacks against 

international civil aviation.

--  Condemnation of political repression in China and agreement 

to suspend the shipment of arms and the extension of loans to 

China.





Toronto 

June 19-21, 1988



Summary



This summit, one of the most harmonious of the 1980s, marked 

the end of the second seven-year cycle of economic meetings.  

The leaders expressed satisfaction at their accomplishments in 

bringing down inflation in the 1980s and laying the basis for 

sustained strong growth and improved productivity.  Among still 

unresolved problems they noted the emergence of large payments 

imbalances among major countries, greater exchange rate 

volatility, and continuing debt service difficulty in 

developing countries.  In response to these developments, the 

leaders made further refinements in the multilateral 

surveillance system to improve the coordination of their 

economic policies.  They also committed themselves to further 

trade liberalization at the Uruguay Round and offered new 

initiatives to relieve the debt burden of the poorest 

developing countries.



Economic Accomplishments



--  Improvement of the multilateral surveillance system by 

adding a commodity price indicator to the existing indicators 

monitored by the seven nations and by integrating national 

structural policies into the economic coordination process.

--  Support for efforts at the Uruguay Round to achieve trade 

liberalization in all areas, including trade in services, 

intellectual property rights (such as copyrights and 

trademarks), and trade-related investment measures, to 

strengthen the GATT's surveillance and enforcement mechanism, 

and to reduce all direct and indirect subsidies affecting 

agricultural trade.

--  Support for a  $75-billion general capital increase for the 

World Bank to strengthen its capacity to promote adjustment in 

middle-income developing countries.

--  Agreement to relieve the debt burdens of the poorest 

developing countries, particularly in Sub-Saharan Africa, by 

urging creditors to grant partial debt forgiveness, reduced 

interest rates, and/or lengthened debt maturities.

--  Support for the ratification of the Montreal agreement on 

the ozone layer and the completion of other ongoing 

negotiations on emissions and the transport of hazardous 

wastes.



Political Accomplishments



--  Confirmation of the policy of constructive dialogue and 

cooperation between East and West, particularly in the light of 

greater freedom and openness in the Soviet Union.

--  Reaffirmation of previous summit agreements to combat 

terrorism and support for the policy of no takeoffs for 

hijacked aircraft once they have landed.

--  Support for U.S. Government initiatives to improve 

cooperation against narcotics trafficking.





Venice 

June 8-10, 1987



Summary



The Venice summit took place against a backdrop of escalating 

tension in the Persian Gulf.  On the economic front, the summit 

leaders addressed the continuing issue of how to reconcile 

domestic economic policies with the need for more stable 

international monetary, financial, and trading systems.



Economic Accomplishments



--  Reaffirmation that further shifts in exchange rates could 

be counterproductive.

--  Agreement on the need for effective structural adjustment 

policies, especially for creating jobs.

--  Agreement to improve the multilateral trading system under 

the GATT and to bring about wider coverage of world trade under 

agreed, effective, and enforceable multilateral discipline.

--  Agreement that the long-term objective in agriculture is to 

allow market signals to influence the orientation of production 

and to work in concert to adjust agricultural policies, both 

domestically and in the Uruguay Round.

--  Call for newly industrialized countries with rapid growth 

and large external surpluses to reduce trade barriers and allow 

their currencies more fully to reflect underlying economic 

conditions.



Political Accomplishments



--   Agreement affirming the principle of freedom of navigation 

in the Persian Gulf and the importance of the free flow of oil 

and other traffic through the waterway and supporting the 

adoption of just and effective measures by the UN Security 

Council to resolve the conflict.

--  Agreement on the need for more effective national efforts 

and international coordination to prevent the acquired immuno-

deficiency syndrome (AIDS) from spreading further.





Tokyo 

May 4-6, 1986



Summary



The Tokyo meeting, by achieving significant economic and 

political declarations, was hailed as one of the most 

successful economic summits to date.  There was greater 

specificity about attempts to increase policy coordination and 

a decision to begin a new round of trade talks.  On the 

political side, the joint statement on terrorism was a landmark 

achievement.  One reason for the success was that leaders at 

the Tokyo meeting had considerable experience dealing with each 

other at previous summits.



Economic Accomplishments



-- Establishment of new arrangements to assess the consistency 

and compatibility of their economic policies, based on economic 

indicators, and including enhanced surveillance over exchange 

rates.

--  Formation of a new Group of Seven (finance ministers of 

summit nations) to achieve greater economic policy 

coordination.

--  Agreement to use the September 1986 GATT ministerial 

meeting in Uruguay as a platform for launching the new round of 

multilateral trade negotiations and to support an extension of 

GATT discipline to new areas such as services, intellectual 

property, and investment.

--  Recognition of the need to cooperate to redirect 

agricultural policies and adjust the structure of agricultural 

production in light of world demand.

--  Endorsement of measures to assist Third World development, 

including the U.S. initiative to alleviate debtor country 

problems, in order to encourage implementation of effective 

structural adjustment policies and increased financial support 

for the International Development Association and the IMF.



Political Accomplishments



--  Agreement on a tough statement denouncing international 

terrorism, vowing to fight it relentlessly and singling out 

Libya as a key target in the fight against terrorism.

--  Call for a new international convention requiring 

information exchanges on nuclear accidents and emergencies, in 

the wake of the accident at the Chernobyl nuclear power 

station.

--  Commitment to continued East-West dialogue and negotiation 

and support for a balanced, substantial, and verifiable arms 

reduction agreement





Bonn 

May 2-4, 1985



Summary



The summit participants undertook to pursue, individually and 

cooperatively, policies conducive to sustained growth and 

higher employment.  Building on common, agreed principles for 

achieving these goals, the leaders indicated specific 

priorities for their own national policies.  The United States 

asked the Federal Republic of Germany and Japan to stimulate 

their economies.  The leaders undertook to seek to make the 

functioning of the world monetary system more stable and more 

effective and discussed ways to reach more realistic exchange 

rate relationships.



Economic Accomplishments



--  Agreement to work to strengthen their economies, halt 

protectionism, improve international monetary stability, 

increase employment, and reduce social inequities.

--  Promise to follow prudent economic policies, including the 

exercise of firm control over public spending to reduce budget 

deficits.

--  Agreement to give increased impetus to preparations for the 

launching of new multilateral trade negotiations under the 

auspices of the GATT.



Political Accomplishments



--  Support for the U.S. negotiating position in the arms 

control talks with the Soviet Union, which was urged to act 

positively and constructively to reach agreement.

--  Commitment to fighting the common threat posed by growing 

international drug trafficking and abuse, including the 

coordination of legislation to thwart international drug 

smuggling.





London

June 7-9, 1984



Summary



The meeting marked the passage from a period of constructing 

firm domestic bases for non-inflationary growth to one of 

enhancing the openness of international trade and finance.  As 

the previous Williamsburg summit signaled the beginning of 

recovery and offered an outline of future strategies in the 

international economy, the London summit gave a clearer focus 

to future tasks and actions.  There was a strong endorsement of 

the basic anti-inflationary stance first advocated by President 

Reagan at the Ottawa summit in 1981.  The political 

declarations were the cornerstone of the London summit.



Economic Accomplishments



--  Agreement to continue and strengthen policies to reduce 

inflation, interest rates, and budget deficits and to control 

monetary growth.

--  Commitment to work toward making their economies more 

competitive and flexible to reduce unemployment and develop new 

technologies.

--  Agreement to take steps to ease the repayment terms of 

Third World debtor countries working to improve their economic 

performance.



Political Accomplishments



--  In a 500-word Declaration on Democratic Values, affirmation 

of their commitment to the rule of law, which respects and 

protects the rights and liberties of every citizen and provides 

a setting in which the human spirit can develop in freedom and 

diversity.

--  Determination to pursue the search for extended political 

dialogue and long-term cooperation with the Soviet Union and 

its allies and endorsement of U.S. willingness to resume 

nuclear arms control talks with the Soviet Union.

--  Commitment to consult and cooperate in expelling or 

excluding known terrorists from their countries.

--  Hope for a peaceful and honorable settlement to the Iran-

Iraq conflict.





Williamsburg 

May 28-30, 1983



Summary



The United States hosted a very successful summit, as virtually 

all of President Reagan's economic and political objectives 

were fulfilled.  As Western economies were beginning to 

recover, the allied leaders accepted several U.S. economic 

policies (e.g., lower taxes, more emphasis on private sector 

initiative).  The allies acknowledged the need for united 

action to bring about domestic and global economic growth.  The 

joint statement on intermediate-range nuclear forces (INF) also 

was an important victory for the United States because it 

specifically endorsed the diplomatic and military strategy that 

the United States and its NATO allies were pursuing in relation 

to the Soviet Union.  The introduction of more flexibility and 

informality into the proceedings (e.g., fewer previously 

prepared texts) contributed to the successful meeting.



Economic Accomplishments



--  Agreement on broad strategies to consolidate domestic and 

international economic recovery, including steps to reverse the 

trend toward protectionism, promote greater convergence of 

economic performance, and encourage the development of new 

technologies.

--  Commitment to reduce structural budget deficits by limiting 

the growth of expenditures and to pursue appropriate budgetary 

and monetary policies to lower interest rates, inflation, and 

unemployment.

--  Decision to convene a meeting of finance ministers to 

review and improve the operation of the international monetary 

system.

--  Commitment to energy conservation and the development of 

alternative energy sources.

--  Reaffirmation that East-West economic relations should be 

compatible with the security interests of the allies.



Political Accomplishments



--  Agreement to achieve lower levels of arms through serious 

arms control negotiations with the Soviet Union and a 

commitment to proceed with INF deployment if the negotiations 

failed to result in an accord.





Versailles 

June 4-6, 1982



Summary



This summit was surrounded by controversy over the issue 

(settled six months later) of oil-pipeline equipment sanctions 

against the Soviet Union, including the question of the 

applicability of U.S. law to European companies.  The leaders 

agreed to pursue greater coordination of their economic 

policies and to seek convergence of economic performance, at a 

time of recession in the Western industrial countries.



Economic Accomplishments



--  Establishment of a multilateral surveillance system to 

enable countries to consult on economic policies and seek 

convergence of economic performance as the primary vehicle for 

achieving stable exchange rates.

--  Agreement to pursue prudent monetary policies and achieve 

greater control of budgetary deficits in order to bring down 

high interest rates.

--  Prudent use of government export credits to the Soviet 

Union and its allies.

--  Efforts to improve the multilateral system controlling the 

export of strategic goods to the Soviet Union and its allies.

--  Approval of a preparatory process of negotiations on 

assistance to developing countries and development of other 

forms of practical cooperation with them.



Political Accomplishments



-- Call for an immediate halt to violence by all parties in 

Lebanon in the wake of the Israeli invasion there.





Ottawa 

July 19-21, 1981



Summary



This summit was a "get-acquainted" session between President 

Reagan and the other allied leaders.  The President emphasized 

his domestic economic policies to promote sustainable, market-

oriented, and non-inflationary growth.  He also called 

attention to the potential for erosion of Western security 

resulting from excessive dependence on Soviet energy resources 

(notably natural gas) and the export of strategic goods to the 

Soviet Union.



Economic Accomplishments



--  Agreement that the goals of reducing inflation and 

unemployment were highest priority and that low and stable 

monetary growth was essential to bring down inflation.

--  Commitment to liberal international trade policies and 

continued opposition to protectionist pressures.

-- Commitment to accelerated development and use of all energy 

sources and encouragement of greater public acceptance of 

nuclear energy.

--  Agreement to consult and coordinate economic policies 

relating to East-West trade and to ensure that these policies 

were compatible with political and security objectives.  

Agreement on the need to upgrade existing controls on exports 

of strategic goods to the Soviet Union and its allies.



Political Accomplishments



--  Condemnation of the continuing Soviet occupation of 

Afghanistan.

--  Condemnation of international terrorism.

--  Disapproval of the escalation of tension and the continuing 

acts of violence in the Middle East. (###) 







ARTICLE 7 



Fact Sheet:  Benefits of the Uruguay Round



On December 15, 1993, 117 countries, accounting for more than 

90% of world trade, concluded a historic agreement to reform 

international trade.  The Uruguay Round of multilateral trade 

negotiations, conducted under the auspices of the General 

Agreement on Tariffs and Trade (GATT), succeeded in extending 

the GATT's rules to new areas of trade and updating its 

organization to conform to a more dynamic global trading 

system.  If ratified by the U.S. Congress and by the 

governments of other GATT nations, the Uruguay Round agreements 

will come into effect possibly beginning as early as January 1, 

1995.  By reducing barriers to global commerce and expanding 

U.S. trade opportunities, they will increase U.S. economic 

competitiveness and generate higher real wages and living 

standards for Americans.



Specifically, the agreements include:



--  Lower tariff and non-tariff barriers for manufactured 

products and other goods;

--  Rules to protect the intellectual property of U.S. 

entrepreneurs, entertainment industries, and software 

producers;

--  New rules on trade in services;

--  Fairer competition and more open markets in agriculture;

--  Full participation by the developing countries in the 

global trading system;

--  More effective rules on anti-dumping, subsidies, and import 

safeguards; 

--  A more effective dispute settlement process; and

--  A new World Trade Organization (WTO) to implement these 

agreements.



Lowering Trade Barriers



The eighth round of negotiations under the GATT began at a 

meeting of trade ministers in 1986 in Punta del Este, Uruguay.  

Since the establishment of the GATT in 1948, international 

trade negotiations had resulted in tariff reductions of about 

85%.  However, significant barriers remained, especially with 

regard to agricultural exports, and new areas such as services 

were unregulated.  The Uruguay Round resulted in significant 

reform in the GATT process.  It achieved a more than one-third, 

across-the-board reduction in tariffs.  Tariffs will be 

entirely eliminated in some industries, while many non-tariff 

barriers--such as quotas, discretionary licensing, import bans, 

or voluntary export restraints--will be eliminated or reduced.  

Previously existing as well as newly established tariffs will 

be "bound."  Once bound, a tariff cannot be increased without 

compensation to other countries.



Reducing Unfair Competition

  

The Uruguay Round will reduce worldwide tariffs on industrial 

commodities by $750 billion over the next 10 years.  With the 

completion of the Uruguay Round, average tariffs in industrial 

countries will be brought down to about 4%.  This will help the 

U.S. export an extra $250 billion per year in 10 years.  

Overall, tariff cuts are far larger abroad than in the U.S.  

For example, in India the average cut is 15%; in Argentina, 

13%; in New Zealand, 12%; in Thailand; 10%, in Chile, 10%; and 

in the European Union, 2.3%.  In the United States it is 1.6%.



The agreement on market access for goods will eliminate tariffs 

in major industrial markets and significantly reduce or 

eliminate tariffs in many markets in the following areas:  

steel, furniture, distilled spirits, beer, pharmaceuticals, 

paper, and toys, and for construction, agricultural, and 

medical equipment.  Other significant gains include deep cuts 

ranging from 50% to 100% on important electronics items 

(semiconductors, computer parts, and semiconductor 

manufacturing equipment) by major U.S. trading partners and the 

harmonization of chemical tariffs at low rates by developed and 

major developing countries.



The general agreement on trade in services establishes new 

rules in more than 150 service sectors and subsectors (such as 

advertising, law, accounting, information and computer 

services, environmental services, engineering, and tourism), 

thus enabling U.S. firms operating overseas to be treated as 

fairly as local firms.  The agreement on trade-related 

intellectual property rights establishes improved safeguards to 

protect intellectual property rights.  The agreement also 

protects computer programs and databases.  Patents for 

virtually all types of inventions, including those in 

pharmaceuticals and chemicals, are protected for up to 20 

years.



The Uruguay Round agreement on agriculture requires that all 

members reduce aggregate support to their domestic agricultural 

sectors by 20% from a 1986-88 base period.  (The U.S. already 

has reduced domestic support so that further reductions will 

not be necessary.)  Agricultural products, which represent 10% 

of total U.S. merchandise exports, were the second-largest 

contributor to the overall U.S. trade balance in 1992.  Since 

the U.S. is the world's major exporter of agricultural 

products--with a share of world trade averaging about 15% in 

recent years--increased market access and reduced foreign 

subsidies for agriculture will create important opportunities 

for U.S. producers and exporters.



Agricultural export subsidy provisions of the agreement require 

a 21% reduction by each participant in the volume of subsidized 

exports and a 36% cut in export subsidy spending.  Furthermore, 

export subsidies cannot be extended to products not subsidized 

during the 1986-90 base period.  An agreement on sanitary and 

phyto-sanitary measures establishes a scientific standard for 

measures that restrict imports on the basis of health or safety 

concerns, thereby eliminating import restrictions based on 

arbitrary or unsubstantiated health concerns.



Although environmental issues were not included at the outset 

of the Uruguay Round, the U.S. initiated discussion of the 

environment in the negotiations.  The final agreement calls for 

the establishment of a Committee on Trade and Environment in 

the new World Trade Organization to review the relationship of 

economic and environmental objectives in trade negotiations. 



Improving the GATT Structure



Under the Uruguay Round agreement, the World Trade Organization 

will be established to assume the responsibilities of the GATT 

Secretariat.  The WTO will be responsible for enforcing the 

revised international trade rules, providing procedures for 

negotiating additional trade barrier reductions, and settling 

disputes arising in areas covered by the new trade agreements.  

The new dispute settlement process enhances the ability of the 

U.S. to combat unfair trading practices by allowing "cross-

retaliation" when a country fails to modify its laws or 

regulations in response to a dispute settlement decision.



Gains for the U.S. Economy



Exports of goods and services have been steadily rising  as a 

share of the U.S. economy's total output (from 7.5% of GDP in 

1986 to 10.6% in 1992).   A large and growing share of the U.S. 

work force depends on U.S. exports for employment.  By 1990, 

the jobs of 7.2 million U.S. workers were supported by U.S. 

merchandise exports, up 42% from 5 million in 1986.  



Exports of both goods and services are an important source of 

growth for U.S. industries and affect the industries which 

provide the intermediate and capital goods used by the exports 

producers as well as the firms and workers supporting the 

export process.  Competition in the U.S. market from  increased 

import levels also stimulates U.S. producers to improve their 

productivity, quality, and technology.  This benefits not only 

those firms that have improved their competitiveness but also 

U.S. workers who produce these goods and U.S. consumers who buy 

them.



The substantial reductions in trade barriers negotiated in the 

Uruguay Round will result in lower prices for imported products 

and a greater variety of goods for American consumers.  Greater 

competition will require U.S. producers to become more 

efficient, thus reducing prices of domestically produced goods.  

An increase in export opportunities will stimulate greater 

capital investment; technological innovation; higher 

productivity; job growth; and, most important of all, rising 

living standards.  (###) 







ARTICLE 8



Fact Sheet:  The World Trade Organization



As a result of the Uruguay Round of multilateral trade 

negotiations, global rules for international trade have been 

improved and extended to most trading nations on an equivalent 

basis.  Responsibility for enforcement of these rules has been 

entrusted to the new World Trade Organization (WTO).  The WTO 

also will provide procedures for negotiating additional 

reductions of trade barriers and for the prompt and effective 

settlement of disputes in all  policy areas covered by the new 

world trade agreement.



U.S. Objectives



The principal trade negotiating objectives of the United States 

regarding the improvement of the General Agreement on Tariffs 

and Trade (GATT) and multilateral trade negotiation agreements 

were:



--  To enhance the status of the GATT;

--  To improve the operation and extend the coverage of the 

GATT to products, sectors, and conditions of trade not 

adequately covered; and

--  To expand country participation in particular agreements or 

arrangements, where appropriate.





The agreement establishing the WTO facilitates the 

implementation of trade agreements in the diverse areas of 

trade in goods, trade in services, and the protection of trade-

related intellectual property rights.  The WTO will encompass 

the current GATT structure and extend it to new disciplines 

that have not been adequately covered in the past.  By bringing 

together disciplines on government practices affecting trade in 

goods and services and the protection of intellectual property 

rights under one institutional umbrella, the WTO agreement also 

facilitates the "cross-retaliation" mechanism of the integrated 

dispute settlement understanding.



In addition, the WTO will help resolve the "free rider" problem 

in the world trading system.  The WTO system is available only 

to countries that are contracting parties to the GATT; that 

agree to adhere to all of the Uruguay Round agreements; and 

that submit schedules of market access commitments for 

industrial goods, agricultural goods, and services.  This will 

eliminate the shortcomings of the current system in which, for 

example, only a handful of countries have voluntarily adhered 

to disciplines on subsidies under the 1979 Tokyo Round 

agreement.



The WTO agreement establishes a number of institutional rules 

(described below) that will be applied with respect to all of 

the Uruguay Round agreements.  The agreement will establish  an 

international organization with a stature commensurate with 

that of the Bretton Woods financial institutions-- the World 

Bank and the International Monetary Fund.  The organization 

would not be different in character from that of the existing 

GATT Secretariat, however, nor is it expected to be a 

significantly larger organization.



The WTO will not affect the sovereignty of the United States in 

passing its own laws, enforcing existing standards, or setting 

its own environmental or health standards.  Only the U.S. 

Congress, acting with the President, has the authority to 

change U.S. laws.  



The substantially improved dispute settlement system will 

permit the United States to enforce rights under the Uruguay 

Round agreement more effectively and, at the same time, will 

preserve our trade laws.



Key Provisions



Trade and Environment.  The WTO agreement includes language in 

its preamble recognizing the importance of environmental 

concerns.  This addresses a key interest among U.S. 

environmental and conservation groups, which often have 

expressed concern that international trade agreements have 

failed to take environmental issues into account.  WTO 

negotiators also have agreed to develop a work program on trade 

and environment to ensure the responsiveness of the 

multilateral trading system to environmental objectives.



Decision-making.  The U.S. was successful in its effort to 

retain the practice of general decision-making by consensus 

followed under the GATT since 1947.  Consensus is defined as 

being achieved "if no member, present at the meeting where the 

decision is taken, formally objects to the proposed decision."  

This will continue to enable the U.S. to prevent amendments to 

core WTO provisions that it perceives to be contrary to its 

interest.



Amendments.  The agreement permits amendments but ensures that 

an amendment to the substantive rights and obligations not be 

binding on the U.S. without its acceptance of the amendment.  

In contrast, amendments to pure procedural provisions of the 

Uruguay Round agreements will be binding on all members in 

order to avoid the destabilizing effect that would result if 

different members were subject to different procedural rules.



Waivers.  The agreement allows members to grant waivers of 

substantive provisions in the various Uruguay Round agreements, 

but only in exceptional circumstances.  In the case of an 

obligation subject to phased-in implementation, such as those 

in the agreement on trade-related intellectual property issues 

(TRIPs), that has not yet been fulfilled by the requesting 

member,  members may grant a waiver only by consensus.  Also, 

the waiver provision substantially increases the threshold for 

obtaining waivers--from two-thirds of members present to three-

quarters of all members.  Any waivers granted are subject to 

specific conditions, including a date on which the waiver will 

terminate.



Interpretations.  The WTO agreement clarifies that the reports 

of dispute settlement panels do not constitute "authoritative" 

interpretations of the relevant agreements.  Only the members 

themselves--acting through the Ministerial Conference or 

General Council--can adopt such an interpretation.  The 

agreement also states that interpretations not be used in a 

manner that undermines amendment provisions.



Non-application.  The agreement does not permit sector non-

application. Thus, for example, countries are precluded from 

not applying the TRIPs agreement to the U.S.  With respect to 

members of the WTO that accede to the WTO but are not "original 

members" (generally, are not GATT contracting parties), a 

member can invoke "global" non-application.  Thus, with respect 

to any new members that do not meet Jackson-Vanik criteria 

under U.S. trade law, the U.S.  is not required to apply any 

part of the GATT and the Uruguay Round agreements to that 

country as a whole.



Definitive Application.  In joining the WTO agreement, a member 

agrees to the definitive application of the obligations of the 

Uruguay Round multilateral trade agreements.  Annex 1 to the 

WTO agreement eliminates the protocol of provisional 

application and corresponding provisions in protocols of 

accession to the GATT that had the effect of allowing certain 

existing legislation of contracting parties that are 

inconsistent with the GATT.  However, Annex 1 includes a clause 

that protects from GATT challenge U.S. maritime laws relating 

to cabotage ("Jones Act").  (###)







ARTICLE 9



Fact Sheet:  Developing Country Debt



Background



The ability of many developing countries to pay their foreign 

debt deteriorated in the 1980s, leading to a debt crisis.  As a 

result of actions by creditor countries and continued support 

by international financial institutions, the situation clearly 

has improved.  By providing financial support for countries 

undertaking macroeconomic adjustment, and through an 

improvement in commercial bank relations with major debtor 

countries, the risk to the international financial community 

has been greatly reduced.  The U.S. has encouraged debtors to 

undertake economic reforms and persuaded banks, governments, 

and international financial institutions to support such 

efforts.  In 1985, the U.S. introduced an international debt 

strategy designed to improve and sustain growth in debtor 

countries.  Since 1990, it has complemented this international 

debt strategy with efforts to reduce bilateral official debt--

both alone and in concert with other governments, most notably 

through debt reductions in the Paris Club, an informal group of 

official creditors.



Origins of the Crisis



Several factors contributed to the debt crisis of the early 

1980s.  Inappropriate domestic policies in many debtor 

countries resulted in large budget deficits and overvalued 

exchange rates.  Many countries used substantial borrowing to 

maintain these policies, financing consumption and inefficient 

investment rather than investing in needed infra-structure or 

productive enterprises. Many of the same countries relied on 

short-term, variable rate loans that made them vulnerable to 

rising interest rates.  External shocks, such as the 1979 oil 

price jump, a sharp increase in international interest rates, a 

large drop in commodity prices, and recession in the developed 

countries compounded the repayment strain on heavily burdened 

countries.  Finally, commercial banks overestimated the ability 

of these economies to generate the necessary foreign exchange 

to repay their large commercial debts.



The Initial Response



Beginning with the Mexican crisis of August 1982, the U.S. was 

a leader in devising responses to the developing country debt 

problem of the 1980s.  In 1985, to restart growth in the debtor 

countries, the U.S. proposed an international debt strategy 

which encouraged International Monetary Fund (IMF), World Bank, 

and commercial bank lending in support of economic reform.  In 

1989, the plan was strengthened by incorporating voluntary 

commercial bank debt and debt service reduction to support 

economic reform.



Dramatic progress has been made under the strengthened 

international debt strategy.  Sixteen countries (Argentina, 

Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican 

Republic, Ecuador, Jordan, Mexico, Morocco, Nigeria, the 

Philippines, Poland, Venezuela, and Uruguay) have reached 

agreements which feature debt reduction options.  These 

countries represent the great majority of the total commercial 

bank debt of the major debtor nations.  Similar negotiations 

are at various stages with Bulgaria, Congo, Cote d'Ivoire, 

Gabon, Guyana, Honduras, Nicaragua, and Panama.  Some 

countries, such as Argentina, Chile, and Mexico, have made 

significant progress toward attracting private foreign capital, 

as evidenced by their ability to regain access to international 

capital markets.



Official Debt



With the success of the strengthened international debt 

strategy in gaining voluntary, market-based reduction of 

commercial debt, focus has shifted somewhat from commercial to 

official bilateral (government-to-government) debt within the 

Paris Club.  Creditor governments have supported country reform 

efforts by rescheduling payments--both interest and principal-- 

due on official bilateral debt.  Such re-schedulings are 

provided to countries receiving IMF support of their 

comprehensive economic reform programs.



In the fall of 1988, the Paris Club implemented the Toronto 

economic summit mandate to provide debt relief to heavily 

indebted, low-income Sub-Saharan African countries.  "Toronto 

terms" offered three options for providing debt relief:  debt 

reduction, concessional interest rates, or extended maturities.  

In 1990, these terms were extended to the poorest and most 

heavily indebted countries in other regions on a case-by-case 

basis.



In December 1991, the Paris Club implemented the London 

economic summit mandate to provide even more generous terms to 

the poorest of the poor countries.  Stimulated by a proposal by 

U.K. Prime Minister John Major in Trinidad, these "enhanced 

Toronto terms" introduced options under which creditors reduce 

debt service by up to 50% on a net present value basis.  Since 

December 1991, Benin, Bolivia, Burkina Faso, Cameroon, Central 

African Republic, Cote d'Ivoire, Ethiopia, Guinea, Guyana, 

Honduras, Mali, Mauritania, Mozambique, Nicaragua, Niger, 

Senegal, Sierra Leone, Tanzania, Togo, Uganda, Vietnam, and 

Zambia have received reschedulings under enhanced Toronto 

terms.  The Administration has received congressional 

authorization and appropriations to enable the U.S. to join a 

number of the debt reduction and debt service reduction options 

of enhanced Toronto terms.



In addition, in response to the 1990 Houston economic summit 

mandate, the Paris Club devised more generous terms for lower 

middle-income countries (LMICs)--those not poor enough to 

qualify for enhanced Toronto terms but still heavily indebted.  

Congo, Dominican Republic, El Salvador, Honduras, Jamaica, 

Jordan, Morocco, Nigeria, Peru, and the Philippines have 

received reschedulings on these LMIC or "Houston terms," which 

extend the repayment periods but do not provide debt reduction.



In April 1991, the Paris Club agreed to special debt relief for 

Poland, providing 50% phased-in debt reduction on a net present 

value basis in support of multi-year economic restructuring 

agreements with the IMF.  The U.S., citing the need to provide 

extraordinary assistance to Poland in its transition from a 

centrally planned to a free market economy, approved a 70% 

reduction in May 1991.  At the end of 1990, the U.S., in 

recognition of Egypt's supportive role during the Gulf crisis, 

canceled Egypt's $6.7-billion military debt.  In May 1991, 

Egypt's Paris Club creditors followed this action with a 

phased-in 50% debt reduction, available within the context of 

IMF-supported economic reform programs.



In 1989 and 1990, the U.S. Congress provided authority to 

forgive, first, U.S. Agency for International Development 

economic assistance and, later, PL-480 loans to Sub-Saharan 

Africa and other least-developed countries that are undertaking 

economic reform.  More than $2.7 billion owed by 27 African, 

Latin American, and South Asian countries has been forgiven 

under these authorities since FY 1990.  The U.S. also has 

reduced the non-military debt of seven Latin American nations 

under the framework of the Enterprise for the Americas 

Initiative, an integrated program to increase trade, promote 

capital flows, ease debt burdens, and protect the environment.



The decade of the 1990s should see a new focus on the debt 

problems of the poorest countries, as private capital flows 

increasingly replace official financing to the more 

creditworthy developing countries.  The growing importance of 

private sector funds is due as much to the improved economic 

policies of many developing countries as it is to the 

heightened interest of private investors in these emerging 

markets.  (###)







ARTICLE 10



Fact Sheet:  Russia and U.S. Assistance



U.S.-Russian Relations



During the summit meeting in Moscow, January 12-15, 1994, 

President Clinton and President Yeltsin reaffirmed the 

fundamental importance of U.S.-Russian cooperation based on the 

Charter of American-Russian Partnership and Friendship, the 

Vancouver Declaration, and existing treaties and agreements.  

They noted that the relationship between the U.S. and Russia 

has entered a new stage of mature strategic partnership based 

on equality, mutual advantage, and recognition of each other's 

national interests.  From this perspective, they reviewed the 

full range of bilateral and international issues.  The two 

Presidents are convinced that the U.S. and Russia will continue 

to consolidate their partnership and together promote global 

stability, peace, and prosperity.



Additionally, the two Presidents, with President Kravchuk of 

Ukraine, signed a Trilateral Statement providing for the 

transfer of all nuclear weapons in Ukraine to Russia for 

dismantlement and specifying prompt compensation by Russia to 

Ukraine for the highly enriched uranium in transferred nuclear 

weapons.



Presidents Clinton and Yeltsin also agreed to de-target the 

strategic nuclear missiles under their command by May 30, 1994, 

and this has been done.



During their summit meeting in Vancouver, Canada, April 3-4, 

1993, Presidents Clinton and Yeltsin agreed on a new package of 

bilateral economic programs to address Russia's immediate 

humanitarian needs and contribute to its successful transition 

to a market economy and democracy.  The economic package 

announced at the Vancouver summit totaled $1.6 billion for 

Russia.



In September 1993, Congress passed a $2.45-billion assistance 

pack-age for the New Independent States (NIS) which included a 

$1.8-billion bilateral package, initially announced during the 

summit meeting of the Group of Seven (G-7) industrialized 

countries in Tokyo in July 1993. The funding supports seven 

categories of assistance:  private sector development, a 

special privatization and restructuring fund, trade and 

investment, democracy initiatives, humanitarian assistance, 

energy and environment, and support for troop withdrawal and 

housing.  About two-thirds of the approved $2.45-billion 

assistance package will be directed to Russia, while the 

remaining one-third will be disbursed among the other 11 New 

Independent States.    



The fiscal year 1995 Foreign Operations Bill is nearing 

completion, and $850 million will be appropriated to support 

assistance programs in the NIS once it is signed into law.  



The accomplishments of the Moscow, G-7 Tokyo, and Vancouver 

summits built upon the wide range of specific agreements on 

political, security, and economic issues reached during the 

June 1992 U.S.-Russia summit in Washington, DC (see Dispatch, 

Vol. 3, No. 25, June 22, 1992).  



The United States has pledged active American support for the 

Russian people as they pursue their course toward democratic 

institutions and a free market economy.  The cornerstone of the 

continuing U.S. partnership with Russia and the other NIS has 

been the Freedom for Russia and Emerging Eurasian Democracies 

and Open Markets (FREEDOM) Support Act, enacted in October 

1992, which directly addresses their political, economic, and 

military transformation. 



Through 1993, U.S. assistance provided to Russia has been about 

$1.6 billion in humanitarian assistance and $355 million in 

technical assistance (not including nuclear weapons 

dismantlement--see p. 23, "Military Issues").  The focus of 

U.S. assistance to Russia is support for Russia's transition to 

a market economy, transition to democracy, and the provision of 

humanitarian assistance. 



Assistance To Support Transition to a Market Economy.  The U.S. 

Government has been at the forefront of delivering 

privatization assistance to Russia since October 1992.  The 

U.S. Agency for International Development's (USAID) 

privatization assistance program focuses mainly on:



--   Creating privatization policies, programs, and 

transactions to move government-owned assets--such as trucks, 

factories, or small enterprises-- into the hands of private 

owners; and

--  Developing a complementary infrastructure, to include the 

creation of laws and regulations, a viable stock exchange, 

regulatory agencies, and business support organizations--all of 

which help to safeguard the commercial viability of  privatized 

enterprises.  



The thrust of these two initiatives helps create a business 

environment which is transparent, fair, and predictable, and 

encourages foreign and domestic investment.



On September 28, 1993, USAID signed a grant agreement to 

initiate the Russian-American Enterprise Fund.  The U.S. plans 

to capitalize the fund with more than $300 million in foreign 

assistance appropriations over the next three years.  It will 

focus $40 million on activities in the Russian Far East.  Given 

the resource-rich Far East and the importance of the Pacific 

Rim, this will help catalyze the region's vast business 

potential, including joint ventures with American firms.  The 

fund, which is managed by a private board of directors, has 

authority to make loans and equity investments and offer 

technical assistance to promote new private businesses and 

entrepreneurs in Russia, with special emphasis on the promotion 

of  small and medium-sized enterprises.  It uses U.S. 

Government capitalization to attract other resources for 

private-sector development in Russia.



In addition to privatization assistance, technical assistance 

and training programs also have been provided in small business 

development and management; export marketing; market economy; 

securities market and exchange operations and regulations; 

banking; auditing; finance; budget management; tax policy; 

revenue forecasting; agricultural and agribusiness development; 

food systems restructuring; energy management, pricing, 

regulation, and efficiency; highway rehabilitation and 

maintenance; telecommunications development; design of a 

geological database project; gas distribution; nuclear reactor 

safety; coal mine safety; petroleum trade; defense conversion; 

land titling; land use planning; review of draft housing policy 

law; housing development, reform, management, and finance; 

insurance and health care financing; health regulation; 

hospital administration; and vaccine quality control, 

manufacturing, and monitoring techniques.  



Eight medical partnerships have been established between U.S. 

institutions and Russian institutions in Moscow, Dubna, 

Murmansk, St. Petersburg, Vladivostok, and Stavropol.  Funding 

for grain and potato storage facilities has been provided.  

Peace Corps volunteers are working in Russia with a focus on 

small enterprise development.  A U.S.-Russia Joint Commission 

for Agri-business and Rural Development was established in 

March 1994.  The commission will channel funds generated by the 

sale of donated U.S. commodities to support private and social 

initiatives in rural communities throughout Russia.



The Eurasia Foundation is a privately managed grant-making 

organization established with USAID financing to support NIS 

activities in economic and democratic reform.  Funding of $4 

million has been provided to U.S. private voluntary 

organizations to enhance the capabilities of indigenous non-

governmental organizations in Russia to foster volunteerism.



In response to the $6-million Russian Officer Resettlement 

Initiative announced during the Vancouver summit, a pilot 

project for construction of 450 housing units and training for 

demobilizing officers returning from the Baltics and elsewhere 

began in September 1993.  U.S. teams visited Moscow in October 

and November 1993 to meet with Russian officials to initiate 

design of a follow-on project to provide an additional 5,000 

housing units for demobilizing and retired Russian officers 

through direct construction and voucher programs.  This program 

was announced by President Clinton at the 1993 G-7 summit.  

Construction is scheduled to begin in late summer 1994.



Assistance To Support Transition to Democracy.  Technical 

assistance and training programs provided on the rule of law 

have included legislative drafting; judicial restructuring, 

including jury trials; criminal law reform; U.S. legal and 

judicial systems; federal, state, and local court systems; an 

adversarial court system; mock jury trials; judicial exchanges; 

labor relations; conflict resolution; legislative drafting; 

constitutional reform and the draft Russian constitution; food 

and drug legislation; and law-making for democracy.  A USAID 

rule of law program for Russia was launched in early 1994 with 

the opening of a Moscow office to coordinate programs.  

Programs in public administration have included local self-

government, parliamentary exchange, promotion of civilian 

involvement in military affairs, municipal management and 

finance, municipal education, business involvement in city 

government, and intergovernmental fiscal management.  Programs 

in media have included American media, independent press and 

broadcast media, publishing, editing, marketing, advertising, 

legal aspects of advertising, legal aspects of publishing, 

station management, communications, and copyright legislation.  

The U.S. Information Agency has signed Worldnet rebroadcast 

agreements with more than 50 national, local, and independent 

television stations throughout Russia.  



In the area of political process development to support free 

and fair elections, the U.S. has provided technical assistance 

and training to political parties in preparation for the 

December 1993 parliamentary elections, as well as assistance in 

election law analysis and encouragement of voter participation 

through media activities and public dialogue, training of 

Russian monitoring teams, and has worked with the Russian 

Central Election Commission and provided support for electoral 

administrations.



U.S. technical assistance has been provided to teachers and 

national and regional administrators in the form of seminars 

and consultations in the areas of education, civics, American 

studies, long-distance learning methods, new methodologies in 

the instruction process, strategies for adding social sciences 

and humanities to the curriculum of Russian technical colleges, 

the development of a management training curriculum for the 

manufacturing and industrial base (including a faculty exchange 

and an internship program), higher education reform, and 

community colleges.  U.S. educators also are teaching English 

at universities and higher schools of learning.  Many Russian 

students and scholars have participated in higher-education 

exchange programs.  Books and articles on free market economy 

and democracy have been translated, published, and distributed.



Humanitarian Assistance.  Much of the U.S. Government's 

humanitarian assistance effort has been under Operation Provide 

Hope, which was officially launched in January 1992.  Three 

phases have been completed and involved the delivery of 

Department of Defense (DoD) excess food, medicines, and medical 

supplies to Russia and other destinations using DoD 

transportation assets (including contracts with private 

shipping entities).  Under these  phases, the U.S. has 

delivered an estimated $48.8 million worth of food and more 

than $97 million worth of medicines, medical supplies, and 

equipment to Russia.  Recent additional deliveries of DoD 

excess medical equipment and supplies included two 1,000-bed 

hospitals to Moscow, 40,000 pounds of medical supplies worth 

$1.2 million to Yakutsk, and $3.8 million worth of medical 

supplies to the Russian Far East.



--  The USAID Emergency Medicines Initiative drew upon a $10-

million appropriation to purchase emergency medicines for the 

New Independent States.  For Russia, this fund has been used to 

purchase more than $16,000 worth of pharmaceuticals, primarily 

leukemia drugs, that were delivered to Khabarovsk in November 

1992.

--  Public Health and Nutritional Surveillances--The Atlanta-

based Centers for Disease Control (CDC) has been working with 

Russian Ministry of Health departments and other organizations 

since October 1992 to study the availability of health care 

resources, to identify early warning indicators of disease, and 

to strengthen existing health and nutrition information 

systems.  The CDC also has assessed the Russian nutritional 

surveillance system and worked with the Russian Institute for 

Nutrition in designing a nutrition survey. 

--  Food Assistance--Separate from the food deliveries made 

under Operation Provide Hope, the U.S. Department of 

Agriculture (USDA) has three supply initiatives to provide food 

assistance to Russia.  USDA provided more than $250 million in 

grant food aid to Russia in fiscal year (FY) 1993 for a variety 

of commodities, including rice, corn, baby food, wheat and 

wheat flour, whole dry milk, and peanuts and peanut products.  

The U.S. also has provided donations of corn ($29 million) and 

feed wheat ($24.7 million) to Russia in FY 1993.



In 1992, USDA provided Russia with 63,485 metric tons of 

commodities worth $52.5 million under the Food for Progress 

program, and 39,365 metric tons of food worth about $75 million 

under the Section 416(b) program. (Transportation costs were 

included.) 



In FY 1994, the U.S. expects to provide 14,510 metric tons of 

commodities, valued at $13.7 million, through three U.S. 

private voluntary organizations (PVOs), under the Food for 

Progress program.  An additional 15,130 metric tons of food 

aid, valued at $28.5 million, will be provided through four 

U.S. PVOs under the Section 416(b) program.

--  Special Commodities--Under separate programs, the U.S. 

Government purchased more than $75 million worth of commodities 

which were distributed by nine U.S. private voluntary 

organizations to further their charitable work with vulnerable 

populations, especially women and children.



In 1993, the U.S. provided $371,880 for migration capacity-

building, including emergency support, resettlement, and 

reintegration of forced migrants in Russia; $50,000 was 

provided for direct assistance projects for returning migrants.  

These funds were contributed to the International Organization 

for Migration.



A second component of the U.S. humanitarian assistance effort 

has been donations by the private sector.  Under the Medical 

Assistance Initiative, the non-profit organization Project HOPE 

was authorized to solicit, collect, and distribute medicines 

and medical supplies within the New Independent States.  Since 

the announcement of this initiative in February 1991, Project 

HOPE has shipped more than $50 million worth of medical items 

to more than 50 locations in Russia.



Working through non-profit contractors, U.S. private voluntary 

organizations have their donated humanitarian assistance items 

transported by the U.S. Government.  In 1992 and 1993, about 

18,730 tons of food, medicines, and medical supplies were 

delivered to more than 150 cities in Russia.  The value of 

these shipments was more than $54 million.  Also in 1993, the 

U.S. provided funding for the airlift of medicines and medical 

supplies valued at $10 million to five locations in Russia.



Multilateral Cooperation.  In 1993, the U.S. and Russia's other 

bilateral creditors rescheduled about $15 billion of Russia's 

debt service payments.  This debt rescheduling regularizes 

Russia's arrearages with the U.S. and other official creditors 

and gives the Russian Government time to implement economic 

reforms. 



At the 1992 Munich summit, the U.S. and other members of the G-

7 announced a $24-billion package to support Russia's 

macroeconomic reforms.  The package included $11 billion in 

bilateral financing, $4.5 billion in International Monetary 

Fund (IMF) and World Bank loans, $2.5 billion in debt referral, 

and a $6-billion currency stabilization fund.  The G-7 has 

provided more than $12 billion in bilateral financing, and the 

World Bank granted Russia a credit of $600 million as a 

"rehabilitation loan" to finance critical imports in the 

consumer sector and a $70-million loan to improve social 

services.  In August 1992, the IMF approved a first tranche of 

$1 billion for Russia (disbursed in July 1993) under the 

Systemic Transformation Facility.  In March 1994, agreement was 

reached for release of a second, $1.5 billion tranche.  

Russia's access to much of the $24-billion package, including 

the fund to help stabilize the ruble, depended on the 

conclusion of a full-scale IMF stand-by program, which Russia 

and the IMF have yet to conclude.



On June 8, 1994, Russia signed an agreement with the 

Organization for Economic Cooperation and Development (OECD) 

which will provide policy guidance and technical assistance on 

a wide range of structural reform issues, such as competition 

law and policy.



Bilateral Economic Issues.  Current U.S. bilateral trade with 

Russia is about $3 billion.  Although American companies are 

the largest investors in Russia, total U.S. investment is 

estimated at only $400 million.  At Vancouver, Presidents 

Clinton and Yeltsin made bilateral trade and investment growth 

a major priority.  Implementation centers in the U.S.-Russia 

Business Development Committee (BDC), which was established at 

the June 1992 summit and is now co-chaired by U.S. Commerce 

Secretary Brown and Russian Deputy Prime Minister Shokhin.  The 

BDC is the primary vehicle to help identify and remove 

impediments to trade and investment.  In October 1993, Russia 

received GSP status.  More than $440 million of Russian goods 

will benefit.  The U.S. also will support Russia's application 

to become a member of the General Agreement on Tariffs and 

Trade (GATT) and plans to provide a resident GATT adviser to 

the Russian Government.



Under the leadership of Vice President Gore and Prime Minister 

Chernomyrdin, the U.S. and Russia are advancing bilateral 

cooperation through six working committees known collectively 

as the Gore-Chernomyrdin Commission (GCC).  Progress continues 

at the working level on a range of specific issues in the 

fields of science and technology, business development, space, 

energy policy, environmental protection, and defense 

diversification.  The last GCC meeting was held in June 1994 in 

the U.S.



The Export-Import Bank (Eximbank) has approved more than $240 

million in loan guarantees and insurance for transactions in 

Russia.  In July 1993, Eximbank signed an Oil and Gas Framework 

Agreement with Russia under which secured credit guarantees of 

about $2 billion will be extended to support capital equipment 

exports for the rehabilitation of Russia's energy sector.  In 

March 1994, Eximbank approved its first transaction under the 

framework, a $231 million credit for Permeneft, an oil 

production association.  Eximbank has received more than $750 

million in additional Russian Government- approved applications 

that are eligible for support under this framework agreement.  



The Trade and Development Agency and the Commerce Department's 

Special American Business Internship Training Program also have 

programs in Russia.  The U.S. will open four American business 

centers in Russia this year to help U.S. and Russian companies 

do business with each other.



In addition, the U.S. and Russia signed an agreement at the 

June 1992 summit which grants reciprocal most-favored-nation 

status and offers strong intellectual property rights 

protection.  At the same time, the two countries signed two 

other treaties.  The Treaty for the Avoidance of Double 

Taxation, which entered into force in January 1994, provides 

relief from double taxation, assurance of non-discriminatory 

tax treatment, cooperative efforts between officials to resolve 

potential problems, and the exchange of information between tax 

authorities to improve compliance with tax laws.  The Bilateral 

Investment Treaty, when ratified by the Russian parliament, 

will guarantee the right to repatriate ruble profits in hard 

currency, non-discriminatory treatment for U.S. investments, 

effective compensation in case of expropriation, and 

international arbitration in the event of a dispute between a 

U.S. investor and the Russian Government.  



Military Issues.  The U.S. and Russia have begun to define a 

new security partnership emphasizing cooperation in the 

interest of strategic stability, nuclear safety, the 

dismantlement of nuclear weapons, the prevention of the 

proliferation of weapons of mass destruction and their delivery 

systems, and enhanced military-to-military contacts.  In Lisbon 

on May 23, 1992, the United States signed a protocol to the 

START I Treaty with Russia, Belarus, Kazakhstan, and Ukraine--

those states on whose territory strategic nuclear weapons of 

the former Soviet Union were located--making the four states 

party to the treaty and committing all signatories to 

reductions in strategic nuclear weapons within the seven-year 

period provided by the treaty. 



On November 4, 1992, Russia ratified START but stipulated that 

it would not exchange its instrument of ratification until the 

other three states accede to the nuclear Non-Proliferation 

Treaty as non-nuclear weapons states.  On January 3, 1993, the 

U.S. and Russia signed the Treaty between the United States of 

America and the Russian Federation on Further Reduction and 

Limitation of Strategic Offensive Arms (START II), which 

reduces overall deployments of strategic nuclear weapons on 

each side by more than two-thirds from current levels and will 

eliminate the most destabilizing strategic weapons--heavy 

intercontinental ballistic missiles (ICBMs) and all other 

deployed multiple-warhead ICBMs.



Following ratification by Russia and the other NIS, the 

Conventional Armed Forces in Europe Treaty entered into force 

on November 9, 1992.  This treaty establishes comprehensive 

limits on key categories of military equipment--such as tanks, 

artillery, armored combat vehicles, combat aircraft, and combat 

helicopters--and provides for the destruction of weaponry in 

excess of these limits.



On September 8, 1993, the U.S. and Russia signed a memorandum 

of understanding on defense cooperation that institutionalized 

and expanded relations between defense ministries, including 

through a broad range of military-to-military contacts and 

joint training for peace-keeping.  Based on the January 14, 

1994, agreement between Presidents Clinton and  Yeltsin, as of 

May 30, 1994, the strategic nuclear missiles of each country 

were no longer targeted.



On April 10, 1992, the Deputy Secretary of State certified that 

the Russian Federation had met the criteria required under the 

Soviet Nuclear Threat Reduction Act, commonly known as the 

"Nunn-Lugar Act," for financial assistance to safely dismantle 

and destroy nuclear and chemical weapons and to convert defense 

industries to civilian pursuits.  In January 1993, the U.S. 

delivered the first set of emergency equipment for use in the 

transport, storage, and dismantlement of nuclear weapons. 

Additional deliveries of equipment and assistance are being 

made to further a number of Nunn-Lugar projects.  Overall, the 

U.S. has agreed to provide nearly $500 million in Nunn-Lugar 

assistance to Russia.



On March 3, 1994, the International Science and Technology 

Center opened in Moscow through the efforts of the founding 

parties--the U.S., the European Union, Japan, and Russia.  With 

Nunn-Lugar funding, the U.S. provided $25 million for the 

center, which is designed to prevent the proliferation of 

technology and expertise related to weapons of mass destruction 

by providing peaceful employment opportunities to scientists 

and engineers formerly involved with such weapons and their 

delivery systems.



Political Conditions



In free elections in June 1991, Boris Yeltsin was elected 

President of the Russian Federation.  His mandate was 

strengthened in a national referendum in April 1993, in which a 

majority of Russian voters expressed their support for 

President Yeltsin, for his economic reform program, and for 

early elections to a new parliament.



By the fall of 1993, politics in Russia had reached a state of 

stalemate between President Yeltsin and the parliament.  The 

parliament had succeeded in blocking, overturning, or ignoring 

the President's initiatives on drafting a new constitution, 

conducting new elections, and making further progress on 

democratic and economic reform.



In a dramatic speech on September 21, 1993, President Yeltsin 

dissolved the Russian parliament and scheduled national 

elections for December 12, 1993.  Fifty-four percent (58 

million) of registered voters participated in the elections.  

Two houses of the new Russian parliament were elected on that 

date--the upper Federation Council (170 members) and the lower 

State Duma (450 members).  Members of both houses serve for 

two-year terms.



After the December elections, Duma members organized themselves 

into "factions."  As of late May 1994, political faction 

membership was reported as follows:



--  Russia's Choice, 75 members;

--  New Regional Policy, 66 members; 

--   Liberal-Democratic Party of Russia, 60 members;

--  Agrarian Party, 52 members;

--  Communist Party, 45 members;

--  December 12, 38 members;

--  Unity and Accord, 30 members;

--  Yabloko, 27 members; 

--  Women of Russia, 23 members;

--  Democratic Party of Russia, 15 members;

--  Russian Path, 15 members; and 

--  Other, 3 members.





The parliament has been more moderate and effective than had 

been predicted after the December elections.  The opposition, a 

diverse group, aims for a unified position but remains divided 

over key political and economic issues and whether to 

participate in mainstream politics.



In recent months, President Yeltsin has called for national 

reconciliation and attempted to create a broad consensus on 

Russian domestic, economic, and foreign policy.  He plans to 

use this consensus to continue to push for reform, but must 

also take into account Russian voters' call for increased 

attention to social needs and Russian "prestige."



In early 1994, hoping to solidify this nascent political 

consensus, President Yeltsin issued a "Memorandum on Civil 

Peace and Accord," which calls for a two-year period of 

political peace to allow the government to concentrate on 

economic revival.  On April 28, 1994, more than 100 political 

parties, regional leaders, trade unions, and social 

organizations endorsed the document.  To date, more than 400 

groups and prominent individuals have endorsed it.  The 

"Memorandum" was intended to isolate extremists in Russian 

politics and establish fundamental ground rules for political 

competition.  Russian politics has been relatively calm in 

1994.  Pro-reformers and anti-reformers alike are positioning 

themselves for the December 1995 parliamentary and June 1996 

presidential elections.  

 

Foreign Relations



On December 27, 1991, Russia assumed the seat formerly held by 

the Soviet Union in the UN Security Council.  Russia also is a 

member of the Conference on Security and Cooperation in Europe 

(CSCE) and the North Atlantic Cooperation Council.   It signed 

the North Atlantic Treaty Organization's Partnership for Peace 

initiative on June 22, 1994.  On June 24, 1994, Russia and the 

European Union (EU) signed a partnership and cooperation 

agreement which provides for, inter alia, political dialogue at 

all levels, possible talks in 1998 on a free-trade area, EU 

support for eventual Russian accession to the General Agreement 

on Tariffs and Trade (GATT), and EU assistance on nuclear 

safety, restructuring state-run enterprises, and economic 

efficiency.



Russia has played a constructive role in mediating 

international conflicts through its co-sponsorship of the 

Middle East peace process and its support of UN and 

multilateral initiatives in the Persian Gulf, Cambodia, Angola, 

and the former Yugoslavia.  Russia has affirmed its respect for 

international law and CSCE principles.  It has accepted UN 

and/or CSCE involvement in instances of regional conflict on 

its periphery, including the  dispatch of observers to Georgia, 

Moldova, Tajikistan, and Nagorno-Karabakh.



Economic Outlook



The Russian Federation comprises roughly three-quarters of the 

territory of the New Independent States, more than one-half of 

the population, and 60% of the total gross domestic product.  

Agricultural production, chiefly grain and potatoes, accounts 

for more than one-half of that of the NIS.  Russia is rich in 

energy sources, such as oil and natural gas (two-thirds of 

which come from Siberia) as well as coal.



The Russian economy is experiencing a wrenching contraction as 

it moves from a command economy to a free market system.  GDP 

decreased by 12% in 1993 (an improvement from the 19% drop in 

1992).  Agricultural production, chiefly grain and potatoes, 

accounted for more than one-half of that of the NIS; it 

declined by 6% in 1993.  Industrial output fell by 16% and the 

rate of investment fell by 15% in the same year.  Official 

unemployment was only 1% of the 71 million work force in 1993 

(excluding the estimated 4-5 million who work reduced hours or 

are on voluntary leave).



Inflation rose to a peak of 30% in January 1993.  It has 

fluctuated at double-digit rates since then as the government 

has pursued various economic policies (such as raising interest 

rates, cutting food subsidies, and delaying debt payments) with 

limited success.  As of early 1994, the inflation rate was 

estimated at 10%.



Russia's trade balance was positive in 1993, primarily as a 

result of lower grain import requirements, higher import 

duties, and reduced use of Western trade credits.  The 

government has rescheduled its official debt payment 

obligations but has been unable to do so with its commercial 

creditors.  It has increased official foreign exchange reserves 

to about $5 billion in 1993 (to some extent due to non-payment 

of commercial creditors).  Capital flight remains a serious 

problem.



Russia has made significant headway in privatizing many 

economic sectors.  About 50% of GDP is now produced in the 

market economy.  As of March 1994, about 15,000 large state 

enterprises had sold shares to the public through auctions; 

more than 80,000 small firms had been transferred to the 

private sector.  There are 270,000 private farms.  Although 

private and reorganized state/cooperative farms are 

increasingly productive and efficient, privatization has not 

yet generated efficiency gains in industry.  About 30% of 

state-owned housing (about 8 million dwellings) had been turned 

over to private individuals by the end of 1993.  However, 

state-subsidized rents and utilities discourage individual home 

ownership.



Consumers make 70% of their purchases in the private sector to 

take advantage of better selection, quality, and service.  Food 

availability and real per capita income have improved or 

stabilized, but social welfare problems, such as increased 

crime and health care shortages, are serious.  Also, the gap 

between rich and poor has widened; about one-third of the 

population lives below the official poverty level.



Environmental Issues



The Russian Government has inherited serious environmental 

problems.  Air pollution and inadequate supplies of 

uncontaminated water have affected the health of the population 

and contributed to increased infant mortality rates.  

Radioactive pollution-- generated by military nuclear testing 

and unsafe nuclear power plants, institutes, and laboratories--

is especially dangerous.



At the April 1993 Vancouver summit, the U.S. and Russia 

announced their intention to expand joint work in the area of 

environmental protection.  They agreed to coordinate joint 

ecological measures and support for financing these programs.  



In cooperation with the international community, Russia works 

to develop sound environmental policies.  It has established a 

Ministry of Environment and has introduced a pollution fee 

system by which taxes are levied on air and water emissions and 

solid waste disposal, with the resulting revenues channeled to 

environmental protection activities.  Russia also aims to 

develop regional cooperation among the NIS on transborder 

environmental problems.



Russia at a Glance



Many ethnically diverse peoples migrated into the East European 

plain, but the East Slavs remained and gradually became 

dominant.  Predecessors of the modern Russians, the East Slavs 

first appeared in the steppe region north of the Black Sea.  

Kievan Rus', the first East Slavic state, emerged in the late 

9th century AD, coinciding with the arrival of Scandinavian 

traders and warriors, the Varangians.  According to tradition, 

a Varangian named Rurik first established himself peaceably at 

Novgorod by 860 and founded a dynasty.  Kievan Rus' was not 

able to maintain its position as a powerful and prosperous 

state.  Nevertheless, it left a strong legacy, and its 

traditions were adapted to form the Russian state.  



When the Mongols invaded Kievan Rus' in the 13th century, 

Moscow was an insignificant trading outpost in the principality 

of Vladimir-Suzdal'.  The greatest expansion of the 

principality of Muscovy took place under the rule of Ivan III 

(1461-1505), who took the title of Czar and "Ruler of all 

Rus'."  By the beginning of the 16th century, Muscovy had 

united virtually all ethnically Russian lands.  Under the 

guidance of two Western-looking monarchs, Peter the Great 

(1682-1725) and Catherine the Great (1762-96), Muscovy was 

transformed from an isolated, traditional state into the 

dynamic, powerful Russian Empire which played an increasingly 

active role in the affairs of Europe.  



In 1917, the Bolsheviks overthrew the czarist regime, ending 

three centuries of Romanov rule.  On December 30, 1922,  

Bolshevik leaders established the Union of Soviet Socialist 

Republics on territory generally corresponding to that of the 

old Russian Empire.  With the breakup of the Soviet Union in 

December 1991, Russia became an independent country.



According to 1991 estimates, Russia's population was about 148 

million, of whom 81.5% are ethnic Russians.  The territory of 

Russia is about 17 million square kilometers, making it the 

world's largest country.  



Principal Government Officials



President:  Boris Yeltsin

Prime Minister: Viktor Chernomyrdin

Foreign Minister:  Andrei Kozyrev  (###)







ARTICLE 11



Fact Sheet:  Gore-Chernomyrdyn Commission



At their summit meeting in Vancouver, Canada, April 3-4, 1993, 

President Clinton and Russian President Yeltsin pledged to 

jettison the vestiges of the Cold War and forge a new 

partnership between the United States and Russia.  They 

particularly aimed to develop a program to advance a new joint 

agenda in energy, space, and science and technology to the 

benefit of both countries.  To initiate this new cooperative 

venture, the two Presidents agreed at Vancouver that both 

countries would focus high-level attention on it.  This was the 

genesis of the commission headed by Vice President Albert Gore 

and Russian Prime Minister Victor Chernomyrdin.



First Gore-Chernomyrdin Commission Meeting, September 1993



On September 1-2, 1993, in Washington, DC, Vice President Gore 

and Prime Minister Chernomyrdin initiated the new cooperative 

venture.  Its broad agenda included economic and foreign policy 

issues, as well as the evolution of a commercial partnership 

for the future.  During this round of successful meetings, they 

accomplished a great deal in the fields of space and energy.  

Agreements signed represent the leading edge of U.S.-Russian 

cooperation--aimed at achieving broad market access for Russian 

high-technology goods and efficient and low-cost cooperation on 

long-term, complex projects.  They also agreed to establish 

additional subcommittees to focus specifically on 

environmental, scientific, energy policy, and defense 

diversification issues.



Space Cooperation.  The two sides signed three joint 

statements:  one on space cooperation, outlining a phased 

approach for cooperation on human space flight and development 

of a unified space station; a second on cooperative 

environmental monitoring from space, involving a joint study to 

determine the feasibility of such programs; and a third on 

aeronautical sciences.  These agreements set a broad strategy 

for cooperation on global environmental change and in the 

design of future aircraft.  They also signed a commercial 

launch agreement, giving Russia access to the international 

launch services market, and a memorandum of understanding on 

the Missile Technology Control Regime (MTCR), committing Russia 

to the MTCR guidelines on the sale of high-technology goods and 

services.



Energy and Investment Cooperation.  The agreements signed in 

this area represent the joint intention of the parties to 

strengthen economic cooperation and to increase trade and 

investment significantly, especially in energy-related 

projects.  The U.S. Overseas Private Investment Corporation 

(OPIC) announced two major projects for Russia to establish the 

first U.S.-Russian Investment Fund to support privatization and 

to assist in oil well restoration in western Siberia.  



The two sides agreed that each government would name an 

ombudsman to work together to overcome obstacles to specific 

trade and investment projects.  They also signed a memorandum 

to facilitate cooperation in fossil energy development and a 

memorandum of understanding that will lead to an expansion of 

exports to Russia currently financed by Eximbank.  Finally, 

they agreed to launch a joint study on nuclear reactor safety 

issues to determine the most potentially productive joint work 

in the area of nuclear safety.



Second Gore-Chernomyrdin Meeting, December 1993



Following up on the successful September meeting, the Gore-

Chernomyrdin Commission met again on December 15-16, 1993, in 

Moscow.  At this meeting, many of the programs and joint 

projects set in motion the previous September began to take on 

concrete shape.  Major accomplishments were achieved in five 

broad areas.



Space Cooperation.  One of the highlights of the meeting was a 

joint statement issued on space station cooperation.  The 

statement, signed by Vice President Gore and Prime Minister 

Chernomyrdin, covers activities involving the U.S. space 

shuttle and the Russian Mir space station, Russian 

participation in the International Space Station, and 

contractual arrangements to facilitate these programs.  



The two sides signed a protocol calling for additional manned 

flights to the Russian Mir space station and extended time for 

U.S. astronauts there.  They also signed a joint statement on 

aeronautics and space cooperation, noting potential cooperation 

in the areas of earth sciences and environmental monitoring and 

space science.  The joint statement was accompanied by a 

memorandum of understanding describing eight areas of 

cooperation in fundamental aeronautical sciences.



Trade and Business Development.  In this area, the Vice 

President and Prime Minister Chernomyrdin exchanged instruments 

of ratification for a double taxation treaty, effective January 

1, 1994.  OPIC agreements totaling $135 million were signed,   

providing the financial muscle to stimulate significant U.S. 

private investment in the Russian economy.  The two sides 

released a joint communique on conformity of product standards 

to facilitate trade in both directions.  They also signed an 

interim memorandum for establishing American business centers 

in Russia and issued a joint statement on the future tasks of 

the Business Development Committee aimed at identifying 

opportunities, resolving problems, and expanding contracts 

leading to new trade and investment projects.  Finally, they 

announced a joint energy project to create a model Russian 

retail gasoline corporation, to determine the commercial and 

legal conditions needed to establish a privately owned and 

financed corporation.



Energy, Nuclear Safety, and Environment.  The Vice President 

and the Prime Minister signed a milestone statement of 

principles for nuclear safety cooperation, with both 

governments committed to support and expand bilateral and 

multilateral efforts to promote nuclear safety.  The two sides 

also signed a nuclear liability agreement providing a legal 

framework for U.S. corporations involved in improving the 

safety of Russian nuclear reactors.  An agreement for the 

Commodity Import Program provides $125 million in grants for 

importing U.S. gas technology and equipment to improve Russian 

energy production and diminish the environmental impact of gas 

production.  They also announced the formation of an oil and 

gas technology center in the city of Tyumen, a key Russian 

energy production site, to improve the recovery of oil and gas 

and reduce production costs.  Finally, they signed a joint 

statement on environmental cooperation involving 15 technical 

assistance projects to begin immediately and another on 

alternative energy studies.



Defense Conversion.  The Vice President and the Prime Minister 

signed a memorandum spelling out the principles guiding U.S. 

and Russian cooperation in the conversion and diversification 

of defense industries. The two sides followed this with a 

protocol to the existing Nunn-Lugar defense conversion 

implementation agreement that provides up to $20 million for 

direct conversion assistance for the transition to civilian 

production of modular housing.



Science and Technology.  Vice President Gore and Prime Minister 

Chernomyrdin signed a historic agreement providing, for the 

first time, a framework for cooperation in all fields of 

science and technology for a 10-year period.  A major 

achievement of the agreement is a new bilateral framework to 

protect intellectual property resulting from cooperative 

research and development programs. The two sides also signed a 

related memorandum of understanding on cooperation in the 

fields of mining research and minerals information for a five-

year period.



Third Gore-Chernomyrdin Meeting, June 1994 



The third meeting of the Commission, held June 22-23, 1994, in 

Washington, DC, registered further progress in all areas of the 

Commission's work.  In particular, this most recent session 

emphasized the implementation of U.S.-Russian cooperative 

ventures and programs.  



Space Cooperation.  The National Aeronautics and Space 

Administration and the Russian Space Agency signed an interim 

agreement covering initial Russian participation in the 

international space station program, as well as a $400-million 

contract to provide Russian space hardware, services, and data 

in support of the "Shuttle-Mir" program--a joint flight program 

leading to the development of the international space station.  

Key elements of the contract include support of U.S. astronauts 

on board the MIR space station for approximately two years, the 

possibility of 10 shuttle docking missions with Mir, provision 

of hardware, joint technology development, and support for 

science and technology research to be conducted on board Mir.



Business and Investment Development.  A consortium of U.S. and 

other Western oil companies signed an agreement with the 

Russians which launched the largest single U.S. investment in 

Russia--a joint contract to develop the oil fields of Sakhalin 

Island.  The project, worth about $10 billion, is the first 

development of a Russian energy field involving foreign direct 

investment.  Two OPIC funds comprising $4 billion of private 

sector investment in Russia and the other New Independent 

States were signed at this session of the Commission, while a 

$1-billion OPIC fund, which was signed at the Commission's 

inaugural meeting, will soon announce its first closing. 



Energy.  The Vice President and the Prime Minister signed an 

agreement obligating the U.S. and the Russian Federation to end 

the operation of plutonium production reactors by the year 

2000.  The agreement also prohibits the restarting of any 

reactors already closed, and bars both countries from using in 

nuclear weapons any plutonium produced by the production 

reactors after the agreement enters into force.  A committee 

also is developing a joint study on alternative energy sources 

and is establishing an Oil and Gas Technology Center in Russia.



Defense Conversion.  The U.S. announced the first awards made 

under a March 1994 Nunn-Lugar defense conversion agreement 

which provides up to $20 million in assistance to U.S. firms to 

establish joint ventures with Russian defense firms converting 

to civilian production.  It also announced the incorporation of 

the Defense Conversion Enterprise Fund with a grant of $7.7 

million to assist in the conversion of defense industries in 

Russia and the other New Independent States.



Science and Technology.  The two countries signed a statement 

of principles on data exchange and five new memoranda of 

understanding, dealing with transportation, bio-medicine, 

geosciences, offshore energy development, and basic sciences 

and engineering.  These will enable cooperation in areas 

ranging from cancer research to civil aviation and global 

climate change. 



Environment.  A new agreement on the environment provides for 

broader cooperation on global issues, such as biodiversity, 

environmental management, and public participation in 

environmental decision-making.  It also calls for joint 

formulation of policy on environmental problems of bilateral, 

regional, and global significance, increased data sharing, and 

more vigorous efforts to protect intellectual property rights.  

(###)







ARTICLE 12



Fact Sheet:  Safe and Secure Dismantlement of Nuclear Weapons 

in the New Independent States



The U.S. Congress established the Nunn-Lugar program 

authorizing Department of Defense funds to be spent in the New 

Independent States of the former Soviet Union for the non-

proliferation and safe and secure dismantlement (SSD) of 

nuclear weapons.  The Defense Department will commit a total of 

about $961 million in the form of 38 implementing agreements 

with Russia, Ukraine, Kazakhstan, and Belarus in fiscal year 

1994.



SSD assistance facilitates the denuclearization of Belarus, 

Kazakhstan, and Ukraine and the dismantlement of weapons in 

Russia.  Preventing proliferation of weapons of mass 

destruction is another important goal; the U.S. will continue 

to use its assistance for this critical problem as well.



Russia.  The U.S. has signed 12 agreements with Russia totaling 

$374 million in assistance.  The two top priorities for this 

assistance have been strategic nuclear delivery vehicle 

dismantlement and construction of a storage facility for 

fissile material removed from dismantled weapons.  Recent 

discussions have focused on concluding agreements on export 

control.	



Ukraine.  Following completion of the SSD umbrella agreement in 

October 1993, the U.S. signed five implementing agreements with 

Ukraine in November and December:  export control, government-

to-government communication links, material controls and 

accounting, strategic nuclear delivery vehicle dismantlement, 

and emergency response.  After Ukraine signed the Trilateral 

Statement in January 1994, providing for the transfer of all 

nuclear weapons in Ukraine to Russia for dismantlement, the 

U.S. agreed to an additional $100 million in assistance to 

facilitate implementation.  This assistance, including heavy 

equipment such as cranes, facilitates the removal of warheads 

from Ukraine to Russia for dismantlement. 



Kazakhstan.  In December 1993, the U.S. and Kazakhstan signed 

an umbrella agreement and implementing agreements on export 

control, government-to-government communication links, material 

controls and accounting, strategic nuclear delivery vehicle 

(SNDV) dismantlement, and emergency response for a total of $85 

million.  In March 1994, an additional agreement for $15 

million in defense conversion assistance was signed.  The two 

sides also signed a joint letter of intent that calls for a 

U.S.-led survey of the damage at the former nuclear test site 

near Semipalatinsk.  This survey will be conducted in July 

1994. 



Belarus.  Following Belarus' ratification of the Strategic Arms 

Reduction Treaty and the nuclear Non-Proliferation Treaty, the 

U.S. offered $65 million in SSD assistance in addition to the 

$11 million provided by agreements already concluded.  As a 

result, the U.S. has signed agreements with Belarus totaling 

$70 million and continues to explore with Belarus the best use 

of the remaining $6 million. 



SSD Projects by Country, June 1994

                       Obligations ($ millions)



RUSSIA  

Armored blankets                    5.00

Railcar security                   21.50

Emergency response                 15.00

Material controls                  30.00

Storage containers                 50.00

Facility design                     5.00

Facility equipment                 75.00

Export controls                     2.26

Science center                     25.00

Chemical weapons                    25.0

SNDV dismantlement                130.00

Military to military contacts       9.20

Arctic nuclear waste               20.00

Chemical demilitarization lab      30.00

Defense conversion                 40.00

Subtotal                          492.96



UKRAINE 

Emergency response                  5.00

Communications                      2.40

Export controls                     7.26

Material controls                  12.50

Science center                     10.00

SNDV dismantlement                185.00

Military to military contacts       3.90

Reactor safety                     11.00

Defense conversion                 40.00

Subtotal                          277.06



KAZAKHSTAN

Emergency response                  5.00

Communications                      2.30

Export controls                     2.26

Material controls                   5.00

Military to military contacts       0.40

SNDV dismantlement                 70.00

Defense conversion                 15.00

Subtotal                           99.96



BELARUS

Emergency response                  5.00

Export controls                    16.26

Communications                      2.30

Environmental restoration          25.00

  (Project Peace)

Defense conversion                 20.00

SNDV dismantlement                  6.00

Military to military contacts       1.50

Subtotal                           76.06



GENERAL

Support/assessment                 15.00



TOTAL                             961.04



  (###)







ARTICLE 13



Fact Sheet:  U.S. Assistance to Central and Eastern Europe



Background



After the revolutions of 1989 that brought freedom to the 

countries of Central and Eastern Europe, the United States 

pledged to assist the region in the difficult transition from 

communism to democracy.  The principles of U.S. policy were 

outlined in the Support for East European Democracy (SEED) Act.  

Enacted in November 1989, the act authorized the U.S. 

Government to undertake a range of activities designed to 

encourage the establishment of democratic institutions, assist 

in the development of free market economies, and promote an 

improvement in the overall quality of life.



Since 1989 Congress has appropriated through the Seed Act $1.9 

billion to fund programs in Central and Eastern Europe, 

primarily for technical assistance but also including 

Enterprise Funds and balance-of-payments support.  Including 

food assistance and other U.S. contributions, total U.S. 

commitments to Central and Eastern Europe are more than $8 

billion, making the U.S. the second-largest bilateral donor to 

the region.  The U.S. is the largest donor of grant assistance 

(nearly $5 billion).



Democratic Initiatives



During the critical period of transition to democracy, the new 

governments of Central and Eastern Europe are faced with the 

need to develop democratic institutions, foster an 

understanding of democracy among their people, and devolve 

considerable political authority to the regional and local 

levels.  U.S. assistance in these areas includes:



--  Support for free elections, including monitoring support 

for election commissions and equipment;

--  Training and technical assistance in governance and 

administration skills, including budgeting and finance, 

personnel, and organizational management;

--  Educational reform, such as social science studies, 

curriculum revision, and introduction of student councils and 

student newspapers;

--  Technical assistance and equipment purchases to support 

emerging independent media, including management training, 

programming, and seminars on journalism and a free press; and

--  Development of legal systems, including help in drafting or 

revising constitutional, criminal, and civil laws, as well as 

in administrative procedures and regulations dealing with 

crimes, commerce and a market-based economy, and protection of 

civil liberties.



Economic Restructuring



U.S. assistance promotes free market economies in Central and 

Eastern Europe through support for privatization, development 

of small and medium-sized business, policy and legal reforms, 

and key sector restructuring.  Assistance includes:



--  Providing governments in the region with advisers to help 

develop or revise the legal, fiscal, regulatory, and 

institutional frameworks which govern the process of 

privatization;

--  Creation of independent Enterprise Funds, a bold experiment 

giving a private-sector board of directors U.S. Government 

grant funds to promote the development of small and medium-

sized businesses through equity investments, loans, and grants;

--  Privatization assistance and technical assistance to 

enterprises aimed at rapid transformation of state-owned 

enterprises to private owner- ship and long-term commercial 

viability;

--  Department of Treasury advisers to central banks, banking 

institutes, and finance ministries;

--  Commercial law advisers on anti-trust laws, contract 

enforcement and dispute resolution, property rights issues, and 

tax policy and administration;

--  Policy advisers on energy pricing and management, technical 

assistance and equipment to improve energy efficiency, and 

training and equipment to improve safety at nuclear reactors 

throughout the region; 

--  Technical assistance and training to independent 

agricultural cooperatives and private agribusinesses to help 

them in the areas of production and marketing; and

--  Support for the development of infrastructure projects 

through various U.S. Government agencies, including the Trade 

and Development Agency and the Overseas Private Investment 

Corporation.  



Quality of Life



Recognizing that the transition to a market economy creates 

economic dislocation and other social hardships, the U.S. has 

tailored assistance programs to help soften the blow, as well 

as to foster responsible social policies and regulations 

through:



--  Training and technical assistance in employment services, 

worker retraining, vocational skills, and public and private 

pension reform;

--  Partnerships between U.S. and East European hospitals, as 

well as advisers in health care policy, financing, and 

management;

--  Technical assistance in housing and municipal finance; and

--  Environmental advisers and training for national and local 

governments on policy reform and enforcement measures, as well 

as assistance to individual firms on environmental control and 

management.



As noted by President Clinton at the Prague summit in January 

1994, developments in the region require that the U.S. 

emphasize democratization and the social sector in its economic 

assistance programs.  Two new initiatives will address these 

concerns:  The "Democracy Network" will help bolster non-

governmental groups in advocacy and watchdog work;  social 

sector assistance programs will help governments develop short- 

and long-term solutions to unemployment, job creation, and 

basic social services.  



Former Yugoslavia



The United States Government has provided more than $564 

million in humanitarian assistance--financial resources, food, 

goods and equipment, and personnel--to the victims of civil 

strife in the former Yugoslavia.  Assistance efforts have been 

carried out primarily by the U.S. Agency for International 

Development and the U.S. Department of Defense, as well as 

through contributions to the UN High Commissioner for Refugees, 

the International Committee of the Red Cross, and private 

voluntary organizations.  (###)







ARTICLE 14



Fact Sheet:  Global Environmental Issues



The environmental challenges confronting the world today are 

greater than at any time in recent history.  Threats to the 

global environment--such as climate change, increasing 

population growth, stratospheric ozone depletion, and the loss 

of biological diversity and forests--affect all nations, 

regardless of their level of development.  As a result, the 

environment is becoming an increasingly important part of the 

foreign policy agenda.  The U.S. accords high priority to 

addressing global environmental problems and is pursuing a 

wide-ranging agenda of action to protect the environment and 

promote the goal of sustainable development.



Global Climate Change



The possibility that human activities may cause climate change 

is one of the most serious international environmental 

concerns.  The U.S. has been a leader in the effort to respond 

to this threat.  Negotiations on a Framework Convention on 

Climate Change (FCCC), which began near Washington, DC, in 

early 1991, culminated in an agreement that received more than  

150 signatures at the UN Conference on Environment and 

Development (UNCED) in Rio de Janeiro in June 1992.  The 

convention entered into force on March 21, 1994.



The climate change convention establishes an effective process 

for dealing with this global issue.  Industrialized countries 

are developing specific action plans to limit their emissions 

of greenhouse gases and enhance forests and other greenhouse 

gas "sinks."  Other countries are to take similar actions in 

the future.  In April 1993, President Clinton announced that 

the U.S. intends to return its greenhouse gas emissions to 

their 1990 levels by the year 2000.



In October 1993, the President presented a National Climate 

Change Action Plan, containing nearly 50 domestic measures 

designed to meet this U.S. commitment.  In addition, it 

includes a U.S. initiative on joint implementation to promote 

cooperation between countries on projects that will reduce or 

sequester greenhouse gas emissions.  This initiative can serve 

as  a model for an international joint implementation regime.  

By September 1994, the U.S. will make its national submission 

under the climate change convention detailing the actions it is 

taking in all areas to address the threat of global climate 

change.



To assist developing countries and countries with economies in 

transition to market economies in establishing analytical 

foundations for addressing the threat of climate change, the 

U.S. offered $25 million in financial support and technical 

assistance for country studies in fiscal years 1993 and 1994.  

Eligible efforts included inventories of greenhouse gas 

emissions, vulnerability studies, and analyses of options to 

address vulnerabilities and reduce greenhouse gas emissions.  

The U.S. is working with more than 50 countries on such 

studies.  



All Group of Seven (G-7) countries agree that the FCCC does not 

adequately address the post-2000 era.  The U.S. is urging that 

suitable measures for next steps be proposed and discussed at 

upcoming preparatory sessions in August 1994 and February 1995.  

The first conference of parties to the convention is scheduled 

to take place in late March 1995 in Berlin, Germany.



Protection of the Ozone Layer



There is scientific consensus that the depletion of the ozone 

layer continues to be a serious problem.  The U.S. has led 

efforts to address this threat to the atmosphere, beginning 

with a decision in 1978 to ban the use of chlorofluorocarbons 

(CFCs) in non-essential aerosols.  Because protection of the 

ozone layer is possible only with participation by all 

countries, the U.S. urged the conclusion of an agreement to 

restrict the use of CFCs and other ozone-depleting substances.



This effort has led to a succession of landmark international 

agreements since 1985 designed to protect the ozone layer, 

including the 1985 Vienna Convention and the 1987 Montreal 

Protocol.  Based on an amendment under which countries will 

completely phase out the production of CFCs and most other 

ozone-depleting substances by the end of 1996, President 

Clinton announced in April 1993 that the U.S. will reach the 

phase-out target for most substances by the end of 1994.



UNCED and the Commission on Sustainable Development



UNCED was a landmark event in addressing the global 

environment.  Unlike other environmental conferences, UNCED 

focused on "sustainable development," i.e., economic growth 

that takes into account environmental concerns.  UNCED resulted 

in adoption of three key documents:



--  Agenda 21, an action program to guide national and 

international environmental and development efforts into the 

21st century;

--  The Rio Declaration, a statement of principles regarding 

the environment and development; and

--  A statement of principles for the conservation and 

sustainable use of forests worldwide.



Based on UNCED recommendation, the UN has established the 

Commission on Sustainable Development (CSD) to monitor 

implementation of Agenda 21 recommendations.  The U.S. strongly 

supports the CSD as a primary international body for promoting 

sustainable development world- wide.  The CSD, which last met 

in May 1994, will continue to meet annually to pursue follow-up 

to the Rio Conference.  At the May 1994 meeting, the CSD 

discussed the role of official development assistance in 

implementing Agenda 21 goals and ways in which UN system 

support for Agenda 21 could be made more effective.



The U.S. is working domestically to implement the 

recommendations made at the Rio Conference.  On     June 14, 

1993, President Clinton announced the formation of the 

President's Council on Sustainable Development (PSCD), which 

will develop specific policy recommendations for a national 

strategy for sustainable development that can be implemented by 

the public and private sectors.  The PSCD represents a ground-

breaking commitment to explore and develop policies that 

encourage economic growth, job creation, and effective use of 

our natural resources.



In addition to the treaties on biodiversity and climate change, 

UNCED also endorsed the Convention to Combat Desertification, 

particularly in Africa.  Negotiation of this new treaty in the 

"Rio Family" was completed in Paris on June 18, 1994.



Conservation of Biological Diversity



The U.S. is party to a large number of bilateral and 

multilateral agreements designed to protect endangered species 

and ensure wildlife conservation.  One of the most important is 

the Convention on International Trade in Endangered Species of 

Wild Fauna and Flora (CITES), which enables the 122 CITES 

signatories to monitor and control international trade in wild 

species.  CITES was crucial in efforts by the U.S. and other 

countries to protect the African elephant by banning trade in 

elephant ivory, and it is now involved in efforts to protect 

the rhino and tiger.  The ninth CITES conference of parties 

will be held in Fort Lauderdale, Florida, on November 7-18, 

1994.



While CITES has been effective in protecting species that are 

threatened as a direct result of international trade, the main 

cause of species loss is habitat destruction.  The U.S. seeks 

to address this issue through a variety of means, such as 

increased funding for forest conservation programs, the 

establishment of protected areas under the World Heritage 

Convention and other agreements, and the Ramsar Treaty on 

International Wetlands.  The U.S. Agency for International 

Development currently provides more than $160 million a year in 

assistance for tropical forestry and biological diversity 

programs.



On June 4, 1993, the U.S. signed the UN Convention on 

Biological Diversity, which establishes a framework for 

countries to work together to protect the earth's species.  The 

treaty is now before the U.S. Senate for ratification.  The 

U.S. believes that the convention presents a unique opportunity 

for nations not only to conserve the world's biological 

diversity but also to realize economic benefits from the 

conservation and sustainable use of its genetic resources.



Population and Environment



During the 1990s, the increase in the size of the world's 

population will be greater than ever, with annual increases 

between 90 and 100 million.  Unaddressed, global population 

will almost certainly double and could triple before the end of 

the next century.  The implications of such growth for global 

economic, political, social, and environmental security are 

profound.



The third UN International Conference on Population and 

Development will convene in Cairo, Egypt, September 5-13, 1994.  

The Cairo conference is a once-in-a-decade opportunity to 

marshal resources behind a global comprehensive effort   to 

stem rapid population growth.  The U.S. will urge its G-7 

partners to develop comprehensive international assistance 

programs which include addressing the unmet need and demand for 

family planning and reproductive health services, strategies 

for improving maternal health needs and improving child 

survival, and mobilizing institutional and financial resources 

to meet these goals.



Financing Environmental Protection



The U.S. supports effective use of resources and institutions 

to promote the goals of sustainable development and 

environmental protection.  It has been a leader among bilateral 

donors in supporting environmental programs abroad and ensuring 

that environmental considerations are taken into account in 

assistance programs.  The U.S. foreign assistance budget gives 

priority emphasis to sustainable development, including 

programs for reducing natural resource degradation, reducing 

greenhouse gas emissions, and supporting biological diversity, 

among other areas.



Multilateral institutions remain essential to efforts to 

promote economic reforms and development in a rapidly changing 

world; they are also important instruments to promote 

sustainable development and environmental protection.  The U.S. 

has worked to ensure that the multilateral development banks 

take environmental considerations into account in all their 

lending programs.  The U.S. has urged multilateral development 

banks to institute policy reforms to incorporate environmental 

impacts in their project plans.  It also strongly supported 

creation of the Global Environmental Facility (GEF), which 

helps fund projects that provide global environmental benefits, 

such as those related to climate change, ozone-layer depletion, 

biodiversity conservation, and protection of international 

waters.



Marine Conservation and Pollution



The world's oceans face a number of threats as a result of 

human activities such as unsustainable resource use and 

pollution.  The U.S. has played an active role in ocean 

conservation, from efforts in the early 1980s to protect whales 

to a UN-sponsored moratorium in 1992 on the destructive 

practice of driftnet fishing.  Work also is underway to ensure 

that fishing practices by tuna and shrimp fleets minimize 

impacts on dolphin and sea turtle populations.



The U.S. has been a major proponent of two major international 

agreements to address marine pollution:  the Convention for the 

Prevention of Pollution from Ships, which regulates discharges 

of harmful substances during the normal operation of ships at 

sea;  and the London Convention, which bans the ocean disposal 

of a number of wastes and lists others that may be disposed of 

only with special care.



Because pollution from land-based sources presents the most 

serious threat to the marine environment, the U.S promotes 

efforts to address this concern.  Delegates to UNCED adopted a 

U.S. proposal calling for an intergovernmental conference to 

consider effective ways for dealing 

with these land-based sources.  This important conference will 

be hosted by the United States in Washington, DC, in 1995.  

(###) 



[END OF DISPATCH VOL. 5, SUPPLEMENT NO. 6]