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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