U.S. Optimistic Ukraine Economy, Reforms Are “Back on Track”

Source: The Washington File/U.S. Department of State

Ukraine’s Quest for Mature Nation Statehood Roundtable VI
“Ukraine’s Transition to an Established National Identity”

27 September 2005

U.S. Optimistic Ukraine Economy, Reforms Are “Back on Track”

State’s Wayne calls on Ukraine to fight corruption, continue trade reforms

Tim Receveur (Washington File Staff Writer)

Washington-The United States is optimistic that Ukraine is “back on track” in moving its economy forward and fighting the high levels of corruption inside the country, said Assistant Secretary of State for Economic and Business Affairs E. Anthony Wayne.

Corruption at many levels of government and in the private sector undermines investor confidence and trade relations, Wayne told a Washington conference on Ukraine’s Transition to an Established National IdentitySeptember 27. He emphasized that Ukraine must increase transparency to “eliminate opportunities for malfeasance.”

Wayne recommended making budgets, revenues and other financial documents accessible to the public and “rigorously investigating and prosecuting wrongdoing.” He also called on Ukraine to streamline regulations and make the rules of doing business more transparent.

According to the assistant secretary, President Bush and Ukrainian President Viktor Yushchenko have made progress on a bilateral trade agenda, including “constructive discussions on Ukraine’s accession to the World Trade Organization [WTO] and on enforcement of intellectual property rights.

On September 22, the Ukrainian Parliament approved Yushchenko’s choice, Yuriy Yekhanurov, as the country’s new prime minister. Wayne said the United States is optimistic that with the confirmation, “the process of economic reform is back on track.” Wayne said he hopes the new government will “muster the political will” to move forward on reforms required to meet WTO norms.

Additionally, “it is essential that the new Cabinet maintain a steady policy that minimizes state intervention and allows the market to function effectively,” he said.

Efforts To Protect Intellectual Property Rights

Wayne praised the Ukrainian government’s recent efforts to bolster the protection of intellectual property rights. On August 2, new amendments to Ukraine’s laser-readable disc law went into effect that will strengthen its licensing regime and enforcement efforts to stem the illegal production and trade of compact discs and digital versatile discs. (See related article).

In response, the United States lifted the 100 percent tariffs that had been imposed on $75 million worth of Ukrainian exports to the United States since 2002 and restored normal tariffs levels. Ukraine has been designated a Priority Foreign Country for its failure to protect intellectual property rights; the United States currently is evaluating whether to change that designation.

Wayne said an assessment of Ukraine’s eligibility for benefits under the U.S. Generalized System of Preferences, or GSP, also is under way.

The Bush administration is urging Congress, Wayne said, to exempt Ukraine from the provisions of the Jackson-Vanik amendment to the 1974 U.S. Trade Act and to authorize the president to grant permanent normal trade relations to Ukraine.

He said Ukraine for more than a decade has been in full compliance with the freedom of emigration requirements of the Jackson-Vanik law.

Energy Issues

Wayne called on Ukraine to develop “a concerted energy diversification strategy,” which might include partnering with foreign countries interested in possible hydrocarbon reserves in Ukraine’s Black Sea waters. “Above all, we encourage the Ukrainian government to establish clear rules of investment in the sector,” he said.

He also suggested that Ukraine develop a commercial plan for the Odessa-Brody pipeline, and explore coal bed methane and safe nuclear technologies. Better energy conservation policies also are needed, he said.

Wayne praised Ukraine’s 2004 elections and the “Orange Revolution,” saying the world was inspired by the “courage of the Ukrainian people and their hunger for democracy.”

He said he was proud of the role the United States and Europe played in helping to guarantee free elections and said the United States is “committed to helping ensure that the political and economic transformation of Ukraine continues to move forward.”

Ukraine should not face a choice between closer ties to the West or closer ties to its former Soviet partners, Wayne said. “This is a false choice …. Ukraine will deepen its ties in both directions and increasingly serve as a bridge between regions,” he said.

The conference booklet notes that the conference is the sixth in a series, “Ukraine’s Quest for Mature Nation Statehood Roundtable,” which had its genesis in April 2000 when several Ukrainian/American organizations came together to consider ways to support the U.S.-Ukrainian dialogue.

See related articles on remarks on Ukraine by Assistant Secretary of State for European and Eurasian Affairs Daniel Fried before a House of Representatives subcommittee, and the Bush-Yushchenko statement on U.S.-Ukraine strategic partnership.(The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: