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Cablegate: Scenesetter for Secretary Gutierrez' Visit To

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FM AMEMBASSY WARSAW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7265
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC IMMEDIATE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 03 WARSAW 001274

SENSITIVE
SIPDIS

DEPARTMENT OF COMMERCE FOR MIKE ROGERS AND SECRETARY
GUTIERREZ

E.O. 12958: N/A
TAGS: ECON PGOVPM PREL ETRD KIPR PL
SUBJECT: SCENESETTER FOR SECRETARY GUTIERREZ' VISIT TO
POLAND - 90TH ANNIVERSARY OF INDEPENDENCE

1. Mr. Secretary, you are coming to Poland at an exciting
time, following several high-profile bilateral successes: the
August signing of the Missile Defense Agreement; the
successful conclusion of a five-year Polish deployment in
Iraq; and the simultaneous strengthening of support for the
NATO mission in Afghanistan. These achievements reflect the
changing nature of our relationship with Poland, which
increasingly has become a proactive, collaborative partner on
regional and global issues. Your leadership of the
Presidential Delegation to the events marking the 90th
anniversary of Polish independence will strengthen an already
positive relationship with one of our most important European
partners. You will be joined by Heads of State and senior
dignitaries from over 50 countries expected in Warsaw for the
celebrations.

2. The event is a celebration to mark the 90th anniversary
of independent Poland. Polish independence was regained
after WWI following more than 120 years of partition, with
Poland divided among the Prussian, Austro-Hungarian and
Russian empires. Independence came with strong US support -
Polish independence was point 13 of Woodrow Wilson's famous
"14 points" speech to the US Congress. This independence was
to last just over 20 years before being interrupted by the
Nazi invasion and the 45 years of Soviet-influenced communist
rule which followed WWII. Since 1989 and the fall of
communism, Poland has been a regional leader in adopting
democratic and free-market reforms, quickly moving to gain
NATO and EU membership, and now planning to join the Euro
zone. The success of these bold reforms is reflected in
Poland's stable democracy and in economic growth well above
EU averages. As Poland has developed, so too has its role as
a partner for the US on some of our most important foreign
policy initiatives.

-------------
Your Meetings
-------------

3. You currently co-chair the US-Polish Economic and
Commercial Dialogue with your counterpart Deputy Prime
Minister/Economy Minister Pawlak which was launched in 2002.
I understand that your Department is briefing you in greater
detail on the bilateral commercial relationship as well as
preparing you for your meeting with Minister Pawlak. The
relationship is and has been positive. Poland is not among
the 10 largest trading partners for the US, nor does the US
make Poland's top 10. However, the US is a major investor in
Poland. The US has invested over $15 billion in Poland since
the fall of communism in 1989. The vast majority of
investors remain very positive about their experience.
However, the pharmaceuticals sector stands out for persistent
market access problems. Meaningful access to the Polish
market often hinges on whether a drug appears on the
government's reimbursement list. While the government added
a number of innovative drugs to the list last year, the
Ministry of Health continues to make regulatory decisions in
a highly non-transparent manner.

4. You will meet with President Kaczynski on the margins of
the November 11 gala event. Despite relatively low polling
numbers, Kaczynski is expected to run for re-election in
2010, but has not yet declared his candidacy. Prime Minister
Tusk, also undeclared, is expected to be another leading
contender. Almost one year into his term, Tusk enjoys high
public approval ratings, despite widespread criticism that
his government has yet to deliver on major campaign promises.
Political tensions between Kaczynski's populist Law and
Justice (PiS) party, currently in the opposition in
parliament, and Tusk's center-right, market-oriented Civic
Platform (PO), have produced gridlock. In a recent
high-level meeting, President Kaczynski and Tusk managed to
set aside their strong personal differences to discuss the
global financial crisis. Nonetheless, political insiders
expect the difficult relationship between PO and PiS will
make it all but impossible to enact significant economic and
financial reforms over the next two years.

5. We are planning a Cuba-related roundtable for you the
morning of November 12 with Polish MFA officials, NGOs such
as the Lech Walesa Institute, and members of a Parliamentary
group called "Free Cuba." The Polish government and NGO
community are actively engaged on many fronts in helping Cuba
achieve a peaceful transition to democracy. At times the
Poles have provided highly visible moral support, including
videoconferences between Polish leaders and Cuban dissidents;
at times they have quietly advised and supplied Cuban

WARSAW 00001274 002 OF 003


democratic activists, taking advantage of a lower profile
than U.S. officials and NGOs to evade obstruction by the
Cuban regime. Poland reluctantly did not oppose the recent
EU decision to end sanctions, but did insist on a mechanism
to evaluate the impact in Cuba. The MFA has already reached
out to Cuba to initiate a dialogue but is insisting that the
Cuban government authorize Polish officials to meet with the
opposition, a condition Cuba is stubbornly resisting.

--------------------------------------------
The Bilateral Relationship: A Global Partner
--------------------------------------------

6. Poland's commitment and active engagement in Iraq began
in the first days of Operation Iraqi Freedom and continued
with distinction until their last troops returned on October
28. Poles were among the first members of the coalition to
commit troops to Iraq. Their deployment lasted five years
and survived the transitions of two governments. The
decision to withdraw after the 2007 elections was coordinated
with U.S. and Iraqi forces over the course of a full year.
Poland leaves behind a stable province in Qadisiyah that is
now secured by Polish-trained Iraqi soldiers. Importantly,
as they withdrew from Iraq, the Poles plussed up their
mission in Afghanistan. We appreciate their support and
recognize the losses they suffered during the Iraq mission -
twenty two Polish soldiers died and seventy were wounded over
the course of their deployment.

7. Poland recently increased its military presence and took
on new responsibilities in Afghanistan. Poland assumed full
authority for all of Ghazni, a key province located between
Kabul and Kandahar. The Polish task force consists of almost
1600 troops. Poland also intends to increase its commitment
to political and economic development in Ghazni by replacing
the U.S. led PRT over the course of the coming year. The
growing Polish footprint in Afghanistan reflects Warsaw's
determination to bolster the military credibility of its own
forces as well as those of the Alliance as a whole. We
continue to offer the Poles our insights, aid and
encouragement.

8. Secretary Rice traveled to Warsaw in August to sign an
agreement to station 10 missile interceptors on Polish
territory in the northwest city of Slupsk (swoopsk). The
signing marked the conclusion of 18 months of tough but
cordial negotiations. The interceptors have no warheads as
they are designed to destroy ICBMs through kinetic energy,
and pose no offensive threat. European deployment of this
system is intended to counter the threat to European allies
from a small number of ballistic missiles potentially
originating in the Middle East. We are currently negotiating
a Status of Forces Agreement and the necessary Implementing
Agreements that would allow us to begin actual deployment by
2012. Public support for the system ticked up in August,
when the popular Tusk government communicated that it had
driven a hard bargain and struck a good deal with the U.S.
The disproportionate use of Russian force in Georgia also
served to convince Polish public opinion of the benefits of
an enhanced security relationship with the U.S. at a time
when Russia is flexing its muscles.

----------------------------
Poland's Strategic Interests
----------------------------

9. Poland increasingly sees itself as a regional and global
player. The country has tried to take the lead in shaping
major EU policies on such issues as emissions caps, energy
security and Eastern Policy, particularly relations with
Ukraine, Belarus, and the Caucasus region. Poland has
transitioned from an aid recipient to an assistance provider.
Polish aid programs often follow in the wake of Polish
military engagement (NATO and UN missions) or target
countries of strategic interest such as Belarus, Ukraine,
Moldova and Georgia. Together with the US, Poland was a
strong voice in support of Georgia during the August crisis.
The Poles have recently reached out as far as China in search
of allies on climate change negotiations, energy
diversification and trade expansion.

10. Energy is another area of shared interest with the U.S.
The Poles not only seek greater diversification for their own
energy security, but they are out front in encouraging an
EU-wide diversification and energy security strategy. We
share an interest in better use of coal (Poland generates
more than 90% of its power from coal) and cooperate on

WARSAW 00001274 003 OF 003


several research and development initiatives for advancements
in clean coal and carbon capture and storage capabilities.
Due to this reliance on coal, a reluctance to rely too
heavily on Eastern suppliers, and a perceived lack of
dependable alternative sources of energy, Poland acutely
feels the pressure of EU and Kyoto emissions caps initiatives.

--------------------------
The Current Mood in Poland
--------------------------

11. Poland has not completely escaped the financial crisis
despite its sound fundamentals and relatively strong domestic
banking sector. While it certainly has not suffered the
financial meltdowns of its neighbors, global markets seem to
lump Poland together with other emerging markets - at least
temporarily. Poland has not escaped the crunch, particularly
in the strength of its currency and interbank lending markets
(both of which have somewhat rebounded in recent days). Much
of the domestic banking sector is foreign owned, and global
freezing of credit and interbank lending has at least
temporarily impacted local subsidiaries. The real effects of
the crisis, however, will be transmitted through the real
economy in the form of weakened export markets and decreased
foreign and domestic investment. Though somewhat mitigated
by strong domestic demand, Polish GDP growth is expected to
come down to more modest levels of growth over the next year
or so (2-4%) from rates of over 6% in recent years.

12. Your visit comes against the backdrop of the U.S.
Presidential election, which Poles have followed closely
since the primary process. There is great fascination in the
U.S. democratic process, combined with some uncertainty about
what a transition in administrations might mean when it comes
to following up on the bilateral successes of the summer
already mentioned. Besides these prominent issues, there are
persistent frictions and distorted conventional wisdom
surrounding U.S. visa policy and the Visa Waiver Program,
foreign military sales of U.S. equipment to Poland, most
notably the F-16, and the transfer of older military hardware
(navy frigates, C-130s) that some critics claim are out-dated.

13. Many Poles feel that Poland is underappreciated. We
regularly hear the message that Poland is a loyal strategic
partner, who committed and engaged early in Afghanistan and
Iraq, and who continues to suffer casualties by putting its
forces in harm's way with no restrictive caveats like other
NATO partners. In the same breath, Poles will voice their
disappointment that its citizens still require tourist visas
to visit the U.S. (Poland's failure to qualify for the Visa
Waiver Program this year was particularly painful, since
neighbors such as the Czech Republic will be able to travel
visa-free starting November 21.) The undercurrent is: "We've
done all these things for the benefit of the U.S. - Iraq,
Afghanistan, buying F-16s and now agreeing to missile
defense...but what have you done for us?" Despite these
frictions, we are still seen as their strongest single ally.

14. You are visiting a dynamic Poland that has undergone
dramatic changes since its return to full independence in
1989. Poland is increasingly confident in the EU as well as
on the regional and global stage. Despite crosswinds from
the financial crisis, it is an economy that has flourished by
rapidly adopting free-market economic principles and
fostering democratic values. Our partnership has rapidly
transformed from one of bilateral assistance and cooperation
to one based on broadly shared values and mutual interest in
multilateral fora. While they increasingly see themselves as
an EU member and a regional leader, they continue to value
their relationship with the U.S. Your participation in
marking the 90th anniversary of an independent Poland and the
U.S. role in support of that independence will help to
strengthen our already robust ties.
ASHE

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