UKRAINE: FOREIGN POLICY OF A REGIONS-LED GOVERNMENT

C O N F I D E N T I A L SECTION 01 OF 03 KIEV 003041

SIPDIS

SIPDIS

E.O. 12958: DECL: 08/04/2016
TAGS: PGOV PREL ETRD WTO NATO OREP PINR RS UP
SUBJECT: UKRAINE: FOREIGN POLICY OF A REGIONS-LED GOVERNMENT

REF: A. KIEV 3026

B. KIEV 2964

C. KIEV 2530

D. KIEV 1693

E. KIEV 1642

F. KIEV 1530

G. KIEV 643

Classified By: Political Counselor Kent Logsdon for reasons 1.4(b,d)


1. (C) Summary: In an August 3 meeting, parliamentary deputy
and Party of Regions foreign-policy expert Kozhara was
sketchy on the details of how a Regions-led government might
modify Ukraine's foreign policy approaches. He affirmed that
Regions would work to pass WTO-related legislation, but also
suggested that the new cabinet would first "review" the
language of the bills and invite private sector comment.
Kozhara did not disagree that Yanukovych would work actively
toward a NATO membership action plan (MAP) at the Riga
summit. In various comments, Kozhara suggested Yanukovych
would exercise personal diplomacy to make progress in
Ukraine's relations with Russia, Belarus, and with Moldova on
the Transnistria issue.


2. (C) Comment: During a July 27 lunch, four leading
political analyst guests were unanimous and remarkably
downbeat about the implications of a Regions-led government.
They suggested that a government under Yanukovych would
virtually reverse all the gains made since the Orange
Revolution, stop Ukraine's westward progress dead in its
tracks, and restore Russian influence on Ukraine's foreign
policy. In the end, however, they grudgingly accepted that
any government would be better than the uncertainty and
doldrums existing at the time and that we would have to judge
this government by the concrete actions it took. Kozhara,
and Yanukovych, however, have been noticeably conservative in
their suggested approaches to foreign policy. Kozhara was
careful to convey the point that President Yushchenko,
through his choice of foreign minister, would take the lead
in developing and executing foreign policy. As we have noted
previously, we agree that we will have to to judge the nature
of the Yanukovych prime ministership based on actions, not
words, especially in the areas of foreign economic policy,
such as WTO accession, normally considered part of the prime
minister's portfolio. End summary and comment.

The Formal Commitment
--------------


3. (U) In refusing to sign the "universal" declaration August
3, leader of her eponymous political bloc Yuliya Tymoshenko
observed that 90 percent of the declaration consisted of
empty statements on social and economic issues and that the
remaining ten percent with real content had been rewritten in
Party of Regions' favor. While she singled out provisions on
language and religion, Tymoshenko was probably also thinking
about the last four clauses (24-27) of the declaration having
to do with foreign policy.


4. (U) The universal declaration lists the following
Ukrainian priorities:

-- In clause 24, "establishing effective economic cooperation
with all interested foreign partners, based on Ukraine's
interest." This includes a adopting legislative changes
without delay and "joining WTO by the end of 2006 on
conditions acceptable to Ukraine";

-- In clause 25, "continuing the direction of Ukraine's
European integration, with the prospect of Ukraine joining
the European Union." "Steady implementation of Ukraine-EU
Action Plan, immediate start of negotiations on formation of
the free trade zone between Ukraine and EU."

-- In clause 26, "completing . . . Ukraine's participation in
the Single Economic Space" and "creation at the first stage
of the free trade zone without restrictions and exclusions."

-- In clause 27, "mutually beneficial cooperation with NATO
in accordance with the 'Law of Ukraine on the Foundations of
the National Security of Ukraine,'" including "making a
decision about joining NATO based on the results of
referendum that takes place after Ukraine fulfills all
necessary procedures."


5. (C) In an August 3 meeting, former Ukrainian ambassador to
Sweden, Party of Regions foreign policy guru, and
parliamentary deputy Leonid Kozhara commented on the
universal declaration, its specific points, and the likely
approach a Regions-led government would take to other key
foreign policy issues. Kozhara voiced moderate approaches,
trying to put the best spin on Regions' world view, but his

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comments also closely tracked with the comments (reftels C-G)
of his boss, next Prime Minister Viktor Yanukovich.

The Universal Declaration
--------------


6. (C) Kozhara prefaced his remarks by noting that much would
depend on the personality of the next Foreign Minister. He
professed to have no knowledge of who might be the leading
candidate, although he was certain that a selection had been
made and the information kept close hold. Earlier, he had
opined to us that there were four leading candidates (former
FM Konstantin Hryshchenko, former First DFM Oleksandr Chaliy,
Ukrainian Ambassador to France Yuri Sergeev, and Ukrainian
Ambassador to Austria Volodymyr Yelchenko) and he now said
that, as far as he knew, they were still the leading
candidates.


7. (U) Kozhara was also certain acting Foreign Minister Borys
Tarasyuk would not continue in the position. Regions policy
called for improving relations with Russia, and Tarasyuk had
antagonized Moscow to a degree that mending fences would be
impossible if Tarasyuk continued in his position. As for
MFA's top leadership, Kozhara knew them personally and
recognized that they were top-notch professionals. While
their professional futures would be in the hands of the next
FM, Kozhara did not expect that a wholesale housecleaning
would necessarily occur. DFM Andriy Veselovsky (special
negotiator for Transnistria),for example, might stay on.
(Note: At this point, it looks clear that Tarasyuk will be
Yushchenko's choice to continue as FM. Kozhara holds a
personal grudge against Tarasyuk, so he might have been
voicing his personal hope that Tarasyuk would be forced out.)


8. (C) Kozhara noted the universal declaration was a
political document of uncertain impact that was not legally
binding. The new cabinet's actual program and policies would
probably need to be detailed in a written workplan that would
be submitted to Parliament (Rada) for ratification. Similar
workplans in the past, however, had focused on economic and
social priorities and touched upon foreign policy only
through the lens of trade and economic policies. While the
universal declaration could act as a reference guiding future
government decisions, the workplan was the legally
enforceable document.

The Declaration's Specific Provisions
--------------


9. (C) Kozhara said, if the Communists were to sign the
universal declaration, Communist participation would be a
real breakthrough since the document explicitly referenced
Ukraine's NATO aspirations. (Note: In the end, Communist
leader Petro Symonenko signed, but with five opt-outs,
including the NATO clause. See ref A.) When asked, he said
a Yanukovych letter to the NATO Secretary General requesting
MAP would not be inconsistent with Yanukovych's approach to
NATO. He affirmed that with respect to the Single Economic
Space (SES),Ukraine would continue to put an emphasis first
on the creation of a free trade zone within the four SES
countries. Access for Ukrainian goods to a market spanning
"Vladivostok to Kaliningrad" would be a tremendous advantage,
Kozhara noted. The Rada would address WTO-related
legislation but, he claimed, the Cabinet would not simply
forward the legislation. The Cabinet would first invite
comments from industry on the legislation, then review the
draft laws to ensure that they met WTO and Ukrainian economic
requirements. On EU membership, Kozhara said he pinned hopes
on the German presidency to achieve additional progress. He
had heard that, within the EU, Germany was championing an
initiative to establish a special EU-Ukraine relationship
that would remove Ukraine from the EU's "New Neighborhood"
category.

Russia
--------------


10. (C) Kozhara said a Regions-led government would put an
emphasis on restoring relations with Russia, which had
worsened under President Yushchenko. As Prime Minister,
Yanukovych would follow the tradition of new Ukrainian prime
ministers and make an early visit to Moscow. There,
Yanukovych would meet with Russian President Putin and would
work to lay the groundwork for the long-promised Putin visit
to Kiev later in the year. Yanukovych and the new cabinet
would also work to make progress on bilateral issues with
Russian that had been stalled. In particular, Yanukovych
would focus his efforts on getting Russia to lift the various
prohibitions and obstacles to the import of Ukrainian
foodstuffs. (Kozhara observed progress toward SES could be
one useful avenue to this goal.) Yanukovych also wanted to
make progress on practical issues regarding demarcation of

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land and sea borders (especially in the Kerch Strait) between
Ukraine and Russia.


11. (C) Kozhara noted the Yushchenko-Putin interstate
commission was supposed to work on such issues but had been
ineffective (note: principally because the Russians have
refused to meet). He suggested that an intergovernmental
commission, at the level of prime ministers, should be
established to supplant the Yushchenko-Putin commission.
(Comment: Kozhara might have been reflecting thinking within
Party of Regions, but we find it difficult to believe that
Yushchenko would allow Yanukovych to infringe on his foreign
policy prerogatives in such a fashion, especially since
establishment of a "Yanukovych-Fradkov" commission would
implicitly suggest the Yushchenko-Putin commission had been a
failure.)

Transnistria and Belarus
--------------


12. (C) Kozhara suggested Yanukovych would not roll back
elements of Ukraine's current approaches to Belarus and
Transnistria and, in particular, would continue to observe
the Ukraine-Moldova customs agreement. In both cases,
however, he argued that "isolation" was a poor approach that
simply bolstered popular support for Igor Smirnov in
Transnistria and Aleksandr Lukashenka in Belarus. Yanukovych
knew Lukashenka, Smirnov, and Moldovan President Voronin
personally. A key step toward settling the Transnistria
issue would be to have both Voronin and Smirnov sit at the
same table (which they have not done to date) to work on
resolving the issue of Transnistrian separatism. Just having
the two sit at the same table would be a confidence booster
and a breakthrough, Kozhara argued, and Yanukovych would
provide his good offices toward achieving this outcome. We
reiterated EUR DAS Kramer's point, ref B, that the two
figures were not equal.


13. (C) We briefed Kozhara on MFA's plans to host a Belarus
donors' conference in September. When Kozhara opined the
Belarusan government should welcome additional international
assistance, we clarified that donor contributions were
primarily directed at development of civil society. We said
we hoped MFA would press forward with preparations for the
conference once the next Foreign Minister had been appointed
and the new cabinet was in place.


14. (U) Visit Embassy Kiev's classified website:
www.state.sgov.gov/p/eur/kiev.
Taylor