Skip to content

07KYIV331, 2/9 UKRAINE WTO UPDATE: KYRGYZ BILAT

February 9, 2007

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #07KYIV331.
Reference ID Created Released Classification Origin
07KYIV331 2007-02-09 15:55 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv

VZCZCXRO3501
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHKV #0331/01 0401555
ZNY CCCCC ZZH
P 091555Z FEB 07
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC PRIORITY 1170
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHEK/AMEMBASSY BISHKEK 0001
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHGV/USMISSION GENEVA 0048

C O N F I D E N T I A L SECTION 01 OF 02 KYIV 000331 
 
SIPDIS 
 
SIPDIS 
 
GENEVA FOR USTR (RKASPER) 
STATE PLEASE PASS TO USTR FOR KLEIN/MOLNAR 
USDOC FOR 4201/DOC/ITA/MAC/BISNIS 
USDOC FOR 4231/ITA/OEENIS/NISD/CLUCYCK 
STATE FOR EUR/UMB, EB/TPP/BTA, EB/TPP/MTA 
BISHKEK FOR RBURGESS AND GWINSTEAD 
 
E.O. 12958: DECL: 02/08/2017 
TAGS: ETRD WTRO ECON PGOV UP KG
SUBJECT: 2/9 UKRAINE WTO UPDATE: KYRGYZ BILAT 
 
REF: A. KYIV 200 
     B. KYIV 82 
     C. 2006 KYIV 4667 
     D. 2006 KYIV 4648 
     E. 2006 KYIV 4237 
     F. 2006 KIEV 2587 
 
Classified By: AMBASSADOR, FOR REASONS 1.4 (B) AND (D) 
 
1. (C) Summary: Ukraine must sign one more bilateral Market 
Access Agreement, with Kyrgyzstan, as part of its accession 
to the WTO.  Erkin Mamkulov, Kyrgyz Ambassador to Ukraine, 
told us that resolution of USD 27 million worth of debt, owed 
by Ukraine to Kyrgyzstan, is the critical remaining issue and 
a precondition for agreement.  Mamkulov emphasized that only 
direct bilateral talks, outside the context of the WTO 
Working Party in Geneva, could resolve the issue.  He 
criticized the GOU for ignoring Kyrgyz demands.  The EU sides 
with the Ukrainians.  Meanwhile, the GOU is anxious to push 
ahead with accession as quickly as possible and has 
recognized that several outstanding issues -- agreement on 
agricultural support levels and grain export restrictions -- 
require immediate attention.  End Summary. 
 
2. (U) This latest edition in a series of regular update 
cables regarding the status of Ukraine's WTO accession (refs 
A-D and previous) covers the period January 29 - February 9. 
 
Kyrgyz Bilat: It's the Debt 
--------------------------- 
 
3. (C) Econ Counselor met on February 6 with Ambassador Erkin 
Mamkulov, Kyrgyz Ambassador to Ukraine, to discuss the status 
of a Ukraine-Kyrgyzstan bilateral Market Access Agreement, 
the last one required for Ukraine's WTO accession.  (Note: 
DCM had previously dealt with Mamkulov, a career diplomat, 
while the latter was working at the Kyrgyz Foreign Ministry, 
and found him to be competent and forthright.  End Note.) 
 
4. (C) Mamkulov said that Kyrgyzstan views the negotiations 
as consisting of two discrete parts: 1) trade/market access 
negotiations taking place in Geneva, in the context of the 
Working Party; and 2) strictly bilateral, Kyiv-Bishkek 
negotiations on outstanding debt owed by Ukraine to 
Kyrgyzstan.  Agreement on the debt issue must come first, 
said Mamkulov, and this issue is outside the competency of 
trade negotiators in Geneva. 
 
5. (C) Mamkulov emphasized that he had spelled out the Kyrgyz 
position clearly to the GOU, including to Prime Minister 
Viktor Yanukovych, and expressed some frustration that 
Ukrainian negotiators had talked of "bypassing" the agreement 
with Kyrgyzstan through a vote in the WTO (ref E).  He noted 
that Ukraine and Kyrgyzstan had discussed the debt issue many 
times, including most recently in 2002-3, but that the 
Ukrainian side never appeared eager to solve it. 
 
6. (C) Comment: Mamkulov was remarkably open in discussing 
the Kyrgyz negotiating position.  His clear differentiation 
of the two elements of negotiations may help explain why 
December reports from Geneva (ref D) of a breakthrough in the 
talks were premature.  There well may have been progress in 
Geneva on trade-related specifics, such as safeguards on 
Kyrgyz light bulbs, but solving the debt issue is clearly a 
Kyrgyz precondition to a bilateral agreement.  End Comment. 
 
Debt Specifics 
-------------- 
 
7. (C) According to Mamkulov, the issue surrounds USD 27 
million worth of debt accumulated by Ukrainian entities 
during Soviet days and in 1992.  Ukraine's lead WTO 
negotiator Valeriy Pyatnytskiy has told us repeatedly that 
the GOU views the obligation as enterprise, not state, debt 
that should be handled outside of government channels by the 
enterprises involved (ref F).  Mamkulov criticized this 
position, arguing that the "economic entities" involved had 
been acting under state guarantees at that time, and that 
most of the Ukrainian entities involved no longer exist. 
Expecting the enterprises to work out the issue themselves, 
or through the courts, was simply unrealistic.  "We are not 
trying to be difficult," he said, "but we must protect our 
national interests."  Mamkulov noted that Kyrgyzstan had paid 
 
KYIV 00000331  002 OF 002 
 
 
its own Soviet-era debts to Russia and Uzbekistan. 
 
8. (C) Econ Counselor asked if it is imperative that Ukraine 
formally recognize the debt as state debt.  (Note: The 
Ukrainians are concerned that doing so may open the door to 
similar claims by other former Soviet republics.  End Note.) 
Mamkulov said no, emphasizing that actual payment of the debt 
in full is the critical issue. 
 
9. (C) Luis Manuel Portero Sanchez, head of the European 
Commission's Trade and Economic Section in Kyiv, told Econoff 
on February 7 that he was sympathetic to the Ukranians' 
argument, given the nature of the debt in question.  Portero 
Sanchez said that, as he understood it, most of the debt 
accrued as a result of food supplies provided by Kyrgyz 
producers to Red Army troops stationed in Ukraine.  To 
determine the actual figure owed, he opined, would require 
the impossible task of calculating the value of Kyrgyz food 
products actually consumed by Ukrainian (rather than Russian 
or other) soldiers stationed in Ukraine. 
 
Way Forward 
----------- 
 
10. (SBU) The Ukrainians are sticking to their line that the 
debt issue falls beyond the scope of WTO negotiations, and PM 
Yanukovych stated publicly at Davos that the debt "has 
nothing to do with accession to the WTO."  Negotiations 
continue, however, most recently with Deputy PM Mykola Azarov 
leading the Ukrainian side (septel).  Mamkulov said that the 
GOU had in January provided a detailed proposal, which is now 
being analyzed by GOK financial experts. 
 
Ukraine Poised to Tackle Outstanding Issues 
------------------------------------------- 
 
11. (SBU) Ukraine remains anxious to push ahead with 
accession as quickly as possible.  GOU negotiators continue 
to tell us regularly they are eager to review USG comments on 
the recently passed legislation.  PM Yanukovych restated his 
commitment to a speedy accession at Davos, noting that, in 
addition to the Kyrgyz bilat, Ukraine would push ahead to 
solve the agricultural support question, U.S. imports of 
beef/pork, and grain export restrictions.  Ukrainian 
negotiators plan to meet with the Australians on February 19 
to discuss agricultural support levels.  The GOU believes is 
has resolved the problems involving U.S. beef and pork 
imports, although so far only a limited number of shipments 
of U.S. product have entered Ukraine.  Deputy Chief 
Veterinary Inspector Volodymyr Horzheyev told the press on 
February 7 that there are no longer any barriers to the 
import of U.S. meat, and that the GOU is waiting for the 
United States to set a date for a system audit of U.S. 
facilities.  The February 8 edition of the Kyiv business 
daily "Kommersant" cited government sources complaining the 
U.S. was holding up consideration of WTO-related legislation 
at the next Working Party meeting because of differences over 
meat imports and grain import quotas.  The article also 
printed Embassy's response that analysis of the legislation 
was ongoing and our reiteration of the USG's overall support 
for Ukraine's WTO accession. 
Taylor

Wikileaks

Advertisements

From → CONFIDENTIAL

Leave a Comment

Post tour comment here

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: