KYRGYZ REJECT PRESSURE ON UKRAINE WTO ACCESSION

C O N F I D E N T I A L SECTION 01 OF 02 BISHKEK 001354

SIPDIS

SIPDIS

DEPT FOR SCA/CEN (GEHRENBECK)
DEPT PASS TO USTR

E.O. 12958: DECL: 11/13/2017
TAGS: ETRD WTRO PREL KTIA ECON KG
SUBJECT: KYRGYZ REJECT PRESSURE ON UKRAINE WTO ACCESSION
TALKS

REF: BISHKEK 984

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Classified By: Ambassador Marie Yovanovitch for Reasons 1.4 (b) and (d)


1. (C) Summary: A Kyrgyz MFA official asked visiting SCA
Senior Advisor Robert Deutsch November 8 to relay Bishkek's
readiness for "constructive" talks with KYIV over Ukraine's
WTO accession to Washington, but argued against continued
"politicization" and "third party political pressure" with
respect to the Kyrgyz-Ukrainian discussions. MFA
International Economic Cooperation Department chief Jeenbek
Kulubayev expressed the Kyrgyz Republic's interest in seeing
Ukraine join the WTO, and specifically delinked the bilateral
WTO-related talks from an outstanding $27 million Ukrainian
debt to the Kyrgyz Republic. Kulubayev's remarks preceded a
November 11 telephone conversation between the Kyrgyz and
Ukrainian presidents and the visit of the Ukrainian finance
minister to Bishkek addressing WTO issues. Discussions
between KYIV and Bishkek have not yet reached an impasse, and
it appears both sides are targeting the first quarter of 2008
for the completion of their talks. End summary.

Kyrgyz MFA Official Relays Discontent with Kiev
-------------- --


2. (C) At the conclusion of a November 8 discussion of
regional economic issues, Kyrgyz Ministry of Foreign Affairs
International Economic Cooperation Department chief Jeenbek
Kulubayev asked visiting SCA Senior Advisor for Regional
Integration Robert Deutsch to relay the Kyrgyz stance on
Ukraine's World Trade Organization (WTO) accession talks to
Washington. Kulubayev stressed that the Kyrgyz Republic
would be "happy" to see Ukraine join the WTO, but wanted
"constructive" talks. He criticized the "politicization" of
the bilateral discussions and counseled against "third
parties getting involved in order to produce political
pressure" on Bishkek. Such a step, he argued, would be
"erroneous" and would not be "constructive."


3. (C) Lamenting KYIV,s "unjustified" statements on the
bilateral accession talks and attempts to utilize the media
to "pressure us," Kulubayev said Bishkek's position is based
solely on WTO-related issues, "and nothing else." He cited
Ukrainian anti-dumping measures, which hamper the export of
Kyrgyz light bulbs to Ukraine, as an example. Interestingly,
Kulubayev delinked settlement of Ukraine's $27 million debt
to Kyrgyzstan from the WTO negotiations. "We insist," he
noted, "that the debt has nothing to do with the WTO talks."
Kulubayev then noted that future WTO-related negotiations
could only take place in the presence of the WTO secretariat.


4. (C) Kulubayev concluded his remarks with two messages.
For Washington, he said that Bishkek is willing to work
constructively with KYIV, but without "politicization." For
KYIV, he noted that the MFA had briefed ambassadors of WTO
member states that the Kyrgyz Republic "is not creating
obstacles, nor do we have a desire for a misunderstanding,
nor do we want to undercut Ukraine."

Media Report Limited Progress
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5. (U) On November 11, Ukrainian President Yushchenko and
Kyrgyz President Bakiyev reportedly discussed the WTO issue
by telephone, and a Ukrainian delegation led by Finance
Minister Azarov and Foreign Minister Yatsenyuk arrived in
Bishkek for talks with their Kyrgyz counterparts November 12.
While Kyrgyz media reported that Kyrgyz and Ukrainian MFA
officials had signed a protocol on cooperation, separate
articles revealed limited progress after seven hours of talks
between the Kyrgyz and Ukrainian finance ministers in

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Bishkek. News accounts also repeated a Ukrainian proposal to
cover the $27 million debt with "technical assistance."
Meanwhile, Kyrgyz media reprinted a November 12 Ukrainian
newspaper article which reported that "Washington had
suggested bypassing Bishkek's demands to KYIV."

Comment
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6. (C) The Kyrgyz are aware of their leverage over KYIV on
the WTO accession talks, and are probably hopeful that the
Ukrainians will be more accommodating in meeting Kyrgyz
demands (see reftel). Yet, Kulubayev's comments reflect
Kyrgyz displeasure with Ukrainian media accounts and possible
U.S. intervention. Before we engage more deeply in this
issue, we should be certain that the Ukrainians have been
sufficiently responsive to the Kyrgyz. This week's Ukrainian
visit to Bishkek and the presidential discussion are positive
steps, and signal that an impasse has not been reached; we
will try to get a readout of the two discussions. Based on
information emanating from the talks, both sides appear to be
targeting the first quarter of 2008 for the completion of
their WTO-related discussions.

YOVANOVITCH