Ukraine abruptly canceled a $45 million deal to provide nuclear technology to Iran on Friday, announcing the move after talks with U.S. Secretary of State Madeleine Albright.
The action was one of several taken by Ukraine to limit exports that could be used for the development of weapons of mass destruction.
The announcement was made by Ukrainian Foreign Minister Hennady Udovenko following talks with Albright, who was on the first leg of a seven-country tour.
Udovenko also disclosed that Ukraine is planning to become a member of an international agreement designed to curb the spread of missile technology. Albright pledged support for Ukraine's immediate membership.
In addition, Albright and Udovenko signed an accord that provides for peaceful nuclear cooperation. Both sides said the broadened ties signified the start of a U.S.-Ukraine 'strategic partnership.'
The cancellation of the Iran deal followed months-long negotiations, and Albright welcomed the breakthrough during a seven-hour visit that included talks with President Leonid Kuchma.
The United States has been using its diplomatic muscle to prevent Iran from obtaining materials for its weapons programs. U.S. officials say Iran may be seven to 10 years away from developing a nuclear weapons capability. Kuchma said the Ukrainian decision will not derail the Iranian project because Russia is expected to fill the void left by the cancellation. At issue was the planned acquisition by Russia from Ukraine of turbines for two Iranian nuclear power reactors.
Iran says that the project will be used for peaceful purposes and that international inspectors will be permitted to monitor the sites. The Clinton administration believes the project is part of a clandestine Iranian effort to develop nuclear weapons.
Iran on Saturday sharply rebuked Ukraine for buckling under U.S. pressure to scrap the deal.
'Ukraine is the biggest loser,' the country's official news agency IRNA quoted state-run Iranian radio as saying. 'First, the country has lost its political and economic credit because of the failure to respect its commitments, and it will not be qualified to enjoy promotion of relations with Iran for some time,' the radio added in a commentary.
'The people of Ukraine and their independent political groups and parties will protest after having witnessed Albright's humiliating treatment of the country's leaders and the threat to reduce American aid,' IRNA quoted Iranian radio as saying.
'Russia has sufficient capability to complete this project and if turbines manufactured in Ukraine are not used, undoubtedly those produced by Elektrosila in St. Petersburg or other Russian manufacturers can be used instead,' IRNA quoted a spokesman for Russia's atomic energy minister as saying.
Ukraine's decision to cancel the sale of turbines was no surprise to the Kremlin, President Boris Yeltsin's spokesman said Saturday.
During a recent visit to Russia, President Kuchma 'made it understood in advance that his country would not take direct part in this project because of serious pressure from the United States,' spokesman Sergei Yastrzhembsky told the Interfax news agency.
Washington has been determined to do what it could to discourage Ukraine from exporting the large stores of weaponry and technology it inherited from the Soviets. As part of its campaign to gain influence, the United States has provided Ukraine with $3.2 billion in aid over six years, more than it gave to any country outside the Middle East. Last year, official NATO-Ukraine links were established.
At a news conference in the ornate Mariinsky Palace, Albright hailed the Ukrainian decision to cease cooperation with Iran, saying it will cement the country's place in the international effort to halt the spread of weapons of mass destruction.
Udovenko said the decision was not easy because of the 'substantial financial losses' Ukrainian companies will suffer.
But President Kuchma, who also spoke at the news conference, called Udovenko's remark 'a bit of an exaggeration.' It would only cost his country some $45 million which could be made up in contracts elsewhere, Kuchma said.
As a result of Ukraine's decision to join the 29-nation Missile Technology Control Regime, the United States and Ukraine will be able to expand space cooperation. The Clinton administration has limited such cooperation until now because space-launch and ballistic missile technologies are essentially interchangeable. Also, Ukraine's pledge to tighten export controls opens the way for U.S. government permission for Westinghouse Electric Corp. to bid on a $1.2 billion project to complete two Russian-designed nuclear plants in Ukraine. The administration had been concerned that Ukraine, without export controls, could have sold Westinghouse equipment and technology to countries it considers rogue states. Russia had been planning to purchase the turbines from Turboatom, a firm in the Kharkiv region of Ukraine. To compensate for the loss of this business, the United States plans a series of steps to promote investment in Kharkiv's industrial sector.
While Friday's announcements brought the two countries closer, relations are still hampered by red tape and other obstacles that U.S. businesses say they encounter here. Unless Albright is able to certify a substantial improvement in resolving these complaints in the coming weeks, she is required by Congress to cut up to $90 million from aid to Ukraine.
Albright arrived here on a dank rainy morning. Her first stop was an appearance before about 100 attentive students at a high-ceilinged auditorium at the Kyiv Mohyla Academy. She said Ukraine can look forward to a new day after decades of Soviet rule that featured 'famine, persecution and nuclear poisoning' – a reference to the Chernobyl nuclear disaster of 1986.
She said the switch from communist to democratic leaders was a good thing. 'You used to work for them,' she told the students. 'They now work for you.'
