Cablegate: Estonia: Scenesetter for Codel Frist


DE RUEHTL #0883 2700538
R 270538Z SEP 06





E.O. 12958: N/A

1. (SBU) Summary: Two and a half years after NATO and EU
accession, Estonia remains a strong ally on all fronts. It
is deeply committed to trans-Atlantic security institutions
and pro-free market economic policy. Estonia is a
steadfast ally in the Global War on Terror (GWOT) in both
Afghanistan and Iraq, where its troops have suffered 20
casualties including two killed in action, a stiff price
for a country with only 1.35 million inhabitants. With
parliamentary elections scheduled for next spring, however,
the debate on difficult issues, such as Iraq, will likely
grow sharper. End summary.

2. (SBU) Appreciation for U.S. non-recognition of the
Soviet occupation of Estonia remains an important source of
good will towards the United States. Estonian leaders
never tire of expressing their country's gratitude to
American interlocutors for the role of U.S. policy in
keeping alive Estonian aspirations during the Soviet
occupation. This good will is a diminishing asset,
however, as younger Estonians who did not live through the
occupation do not feel this tie as closely as their
parents' generation does.

3. (U) Since the early 90s consecutive Estonian
governments have backed a business- and investor-friendly
economic policy featuring a flat tax on personal income and
no tax on reinvested profits. The result has been the
fastest economic growth in this part of the world. In
2005, GDP grew by almost 10%, and growth accelerated even
further during the first quarter of 2006. Leading sectors
include high-tech, tourism, and manufacturing. The U.S. is
the fifth largest source of Foreign Direct Investment,
although we are far behind the Swedes and the Finns.

4. (SBU) Estonian troops have been serving side-by-side
with U.S. troops in Baghdad since June 2003, suffering 20
wounded including two killed in action. The current
mandate for troop deployment is set to expire at the end of
2006. The Embassy's main short-term priority is to
encourage Estonia to renew its mission mandate in Iraq.
Estonia also contributes to the international stabilization
and assistance force in Afghanistan. In May 2006, Estonia
dramatically increased its contribution in Afghanistan as
part of a UK-led Provisional Reconstruction Team in the
challenging Helmand Province. Afghanistan represents
Estonia's major foreign mission for the next two years. By
the end of this year, there will be 150 Estonian troops
serving in Helmand, a province which produces the lion's
share of opium in Afghanistan and has seen a resurgence of
Taliban attacks. On August 12, an Estonian patrol came
under Taliban attack near the Afghanistan-Pakistan border,
resulting in the wounding of three Estonian soldiers.

5. (SBU) It is possible that your Estonian interlocutors may
raise with you the government's desire to secure Estonia's
entry into the Visa Waiver program. We are working closely
with the GOE, in accordance with the 'Visa Waiver Program
Roadmap', to help them address issues which directly affect
Estonia's eligibility for visa-free travel. We are also
cooperating closely with the GOE on a public diplomacy
campaign to demystify the visa application process and
reduce the number of illegal Estonian workers and overstays
in the United States. Finally, we are taking steps to
simplify the application process and reduce the number of
times applicants have to appear at the Embassy. These
efforts have helped to improve the atmosphere
significantly. The refusal rate for Estonians has declined
steadily since 2003, dropping below 6% this calendar year.


6. (U) During your meeting with Defense Minister Ligi
(confirmed) and Foreign Minister Paet (TBC) you may wish

-- Outline your planned travel to Afghanistan and Iraq and
update the Estonians on your thinking regarding the way
forward in those two countries.

-- Express appreciation for Estonia's ongoing support in
Iraq and Afghanistan at this critical time and encourage
Estonia to extend its troop commitment in Iraq beyond
December 31.


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