61. Telegram From the Embassy in Poland to the Department of State0

2082. Department pass Commerce. Behrman called June 14 Trampczynski, Jedrychowski and Winiewicz. Approximately one hour conversation each. At Behrman request Trampczynski outlined future Polish trade West, expressed concern common external tariff Common Market, particularly affecting Polish agricultural exports. However, said 1962–1963 expected no appreciable problem this sector. In discussion possibilities Polish relationship GATT, freely admitted problems posed by trade relations two differing economic systems but offered no solutions. Trampczynski stressed importance foreign trade to development Polish economy, asserting that expectations were for growth of industrial goods exports. In reply to question of how Poles would work to reduce common external tariff Common Market, Trampczynski offered no effective reply. Did show considerable interest in working towards method of accommodating state trading procedures to demands of free world traders, but again nothing specific.

Trampczynski, Jedrychowski and Winiewicz took same position on problems which prevent trade from developing between Poland and United States. First, lack technical knowledge goods available US (2) lack commercial credits (3) tightness export controls. Argument was that without knowledge of technical capabilities of American products, purchases often led to inefficiencies and inadequate tooling up of plant. [Page 125] Also that relatively greater knowledge Western European and UK capabilities led to greater imports from these countries. On second point asserted Johnson Act detrimental since did not affect grade other countries, and on third, that application embargo delayed trade and made planning difficult since could not know what could be obtained and whether future plans might be interrupted or inconvenienced.

Behrman replied each of these to effect that first would be resolved if trade opportunities in Poland became greater so that private business felt it worthwhile spend time sales effort, that present was no time to attempt change Johnson act but that in fact Poles could take care of situation by joining IMF. Trampczynski and Jedrychowski indicated IMF membership low priority, mentioning specifically that consideration had been given to this 1958 but support not forthcoming when Poles took initiative. General impression from discussion was that political realities in bloc prevent any strong move by Poles towards IMF. Seemed to be full understanding that US could not [omission in the source text] on Johnson Act.1 Jedrychowski stressed Poles intended pay every cent of debts, including World War I and interim, not indicating any precise period in which this expected to be done. On third point of embargo and trade policy, Behrman stressed attitude Congress as presented by possible position on MFN in trade bill and amendments to Export Control Act. Brunt of argument here was that Congress saw no real return to US from deferential treatment to Poles compared with rest of Soviet bloc, and that recent political and economic moves by Poles showed closer identity with bloc, which Congress tended to feel would remove justification for continuing deferential treatment.

Jedrychowski stressed MFN treatment negotiated by Poles as part property claims settlement 1960 and removal would be contrary such agreement. Trampczynski indicated MFN worth half million dollars in trade 1961 (our estimate and that of his subordinates considerably larger and would be worth much more in 1962).

Conversation Winiewicz stressed long-run friendship US despite ups downs current problems. Although stressed Poland politically and economically tied Soviet bloc, point also made that reliance by Poland on socialist trade actually much less than assumed outside and probably less than figures showed. Said Polish policy to increase amount trade with West. Behrman replied Common Market economically integrating [Page 126] with intention trade externally but moving toward political integration as well and that CEMA integration would weaken basis for continuation of Polish deferential treatment. On export control point Wieniewicz argued that no control policy could in fact prevent economic growth and policy had in fact caused creation of shipbuilding industry in Poland—obviously at great cost but now pride of their economy.

Jedrychowski and Winiewicz both made special point at length that no political conditions could be imposed on Poles for continued deferential treatment, that no specific action would be taken to make congressional continuation of deferential treatment easier, and that political and economic unity with socialist group was overriding consideration of all policies vis-à-vis West. Within these limitations Winiewicz stressed desirability long-run friendship and hopefulness that ups and downs could be weathered. Behrman replied long-run friendship certainly sought and philosophical approach taken by Winiewicz hopeful in view fact Congress might at some time restrict flexibility executive.

While Winiewicz particularly raised specific points such as [garble] indebtness and publicity in Poland on US/Polish economic agreements, saying everyone in Poland knew of US-Polish trade relations, no attempt made settle any particular issue nor were any raised from our side. Behrman explained on each occasion that objective was fuller understanding broad situation in which each country had to operate.

Although all three made no indication Poland considering any changes external position which could contribute to improvement relations, value of talks lies in opportunity make abundantly clear that Congress unhappy current position these relations and that Poles must consider importance every move which weakens hand of administration in effort continue deferential treatment Poland as member Soviet bloc.

Behrman checked with me approach to be taken in discussion. I concurred in a firm line on above points and feel it important that opportunity was taken by Washington official to present this to high officials in Polish Government. Further, every opportunity in future should be taken to stress necessity of Poles to demonstrate mutual profit to US as result of deferential treatment. Behrman concurs in record discussion above.

Cabot
  1. Source: Department of State, Central Files, 411.4841/6–1562. Confidential. Repeated to Belgrade.
  2. Reference is to the Johnson Debt Default Act, signed on April 13, 1934, which prohibited financial transactions with any foreign government in default in its obligations to the United States. (48 Stat. 574) The act was amended on July 31, 1945, to exempt foreign governments that were members of both the International Monetary Fund and the International Bank for Reconstruction and Development from some of its provisions. (49 Stat. 516)