West seeks formula to help Russian reforms: Clinton and European allies discuss economic aid as Moscow demands free-trade agreements

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PRESIDENT Bill Clinton met the Russian Foreign Minister, Andrei Kozyrev, who is visiting Washington, and spoke to John Major yesterday, as the US administration intensified preparation of the 'aggressive and specific' aid to shore up Russia's fragile democracy, which Mr Clinton will unveil at his summit with Boris Yeltsin next weekend.

Details of the Vancouver package have yet to be finalised. But ideas under discussion include a fund to assist young Russian businessmen, aid for Russia's decrepit oil and gas industry, help with currency stabilisation and the rescheduling of much of the dollars 80bn ( pounds 54bn) of foreign debt inherited from the Soviet Union.

The European Commission also attempted to throw President Yeltsin a lifeline yesterday by proposing a free- trade agreement as a way of keeping Russia on the path of economic and democratic reform. But it remains to be seen if member states, some deeply sceptical, will respond positively.

In a speech at the American University before his 45-minute meeting with Mr Clinton, the Russian Foreign Minister set out Moscow's agenda, urging the United States to use Vancouver to build a 'concrete programme of co-operation' between a democratic Russia and the West, 'with no double standards'.

As well as debt relief and a Western go-ahead for a dollars 6bn stabilisation fund for the rouble, Mr Kozyrev demanded an end to restrictions on trade in security and computer equipment dating back to Soviet days, open access to world high-technology markets - not least those for arms and nuclear energy - for Russian exporters, and a firm timetable for Russian membership of the Group of Seven.

As he left the White House, Mr Kozyrev sounded optimistic, if vague on detail. 'I'm truly convinced that the Vancouver summit will mark the passage from partnership in political interests to real, across-the-board action and co-operation.'

First though, Washington must reach agreement with its own allies on the aid package - hence Mr Clinton's 30-minute phone call to Mr Major, and a discussion with Brian Mulroney, the Canadian Prime Minister. The previous evening he held a two- hour session with top advisers, again exclusively devoted to Russia, and the tricky matter of selling aid to Moscow to a largely sceptical US public.

Russia inevitably was also top of Douglas Hurd's agenda, as the Foreign Minister began a two-day visit to the US, during which he will reiterate Britain's support for speedy help for Mr Yeltsin during a series of meetings with Mr Clinton's national security advisers and Congressional leaders.

The European Commission has asked for a change in its negotiating mandate from member states to include a reference to a possible future free-trade accord with Russia. But Brussels emphasised that such a development could occur only 'when economic and political circumstances in Russia are suitable'.

Jacques Attali, head of the European Bank for Reconstruction and Development, has been urging the Commission into action for months, even circulating a draft free-trade agreement for Russia and the rest of the former Soviet Union, modelled after the North American free-trade deal. Mr Attali said yesterday that he hoped the EC would do more than 'play with words' and that it would quickly negotiate a deal complete with transition periods and protection for fragile industries.

The Commission said that Russia would have to fulfil all obligations under Gatt (General Agreement on Tariffs and Trade), which it has not yet joined. The European Commissioner for External Political Relations, Hans van den Broek, played down expectations of an early agreement on a trade pact, telling a news conference: 'I don't think we should have the illusion that all this can be obtained, let's say, in a year's time. There is a lot to be done in Russia regarding the recovery of the economy there.'

The EC proposal will be considered by EC foreign ministers when they meet next week and then by heads of government in June. The promise of a free-trade zone is conditional on economic and political circumstances in Russia and thus is a political signal that the EC supports Mr Yeltsin's attempts at reform. 'It is not a specific message of support to Yeltsin the man as to the process of democratisation that he is trying to set in train,' a Commission source said yesterday.

Of all the former Soviet states, Russia is the furthest advanced in terms of negotiating a trade accord with the EC similar to those signed with other East European states. The clause relating to free trade was produced after foreign ministers, wary of the deteriorating political climate in Russia, asked the Commission to widen the scope of what the EC could offer.

(Photograph omitted)

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