84. Memorandum of Conversation0
SUBJECT
- US-Polish Relations; Request for new PL 480 agreement
PARTICIPANTS
- Edward Drozniak, Polish Ambassador
- Dr. Marian Dobrosielski, Counselor of Polish Embassy
- The Secretary
- Mr. William R. Tyler, Assistant Secretary, EUR
- Mr. Herbert Malin, EE
To the Secretary’s opening inquiry as to the health of Foreign Minister Rapacki, Ambassador Drozniak replied that it was not good, but that Rapacki was back at his desk.1 Although the Foreign Minister had wanted to attend this month’s opening UN session, he was advised against it for health reasons, and Deputy Minister Winiewicz will head the Polish delegation.
Ambassador Drozniak then explained that he had been in Poland for two months of vacation, but had also had opportunity for business talks with Mr. Gomulka, President Zawadzki, Prime Minister Cyrankiewicz, and Foreign Minister Rapacki. As for the internal economic situation, this year’s short period of vegetation, owing to a late spring, coupled with drought conditions in midsummer, had resulted in a crop expected to approximate that of the previous year. Harvest prospects were neither very good nor very bad, as indicated in Gomulka’s harvest speech on September 8. After a disastrous winter, sandwiched between two poor harvests, Poland was now beginning to catch its breath and get moving again, although the tasks ahead are not easy ones.
Concerning international relations, the Ambassador said the Polish people and official circles were enthusiastic over the recently concluded nuclear test-ban treaty and hoped this first step will lead to other relaxations of world tension and possible new agreements. In this atmosphere he had received instructions to work toward the development of bilateral relations in the direction of peaceful coexistence, and he wished to remind the Secretary that Poland was the only Warsaw Pact country that has already been working in this spirit for several years. He wanted [Page 175] to continue this work, emphasizing the economic relationship between the two countries.
Ambassador Drozniak said that his government entertains strong hopes that the question of MFN treatment will be resolved in the near future since unfortunate effects upon Polish trade are already being felt. He cited the attitude of US businessmen who have doubts as to the future of MFN and the hesitancy of Polish foreign trade firms to make future commitments for the same reason. It would be an unfortunate situation indeed if the withdrawal of MFN were to occur and bring about a loss of much of the good progress made between the two countries during the last few years. He explained that if he and the Poles sometimes appeared to show impatience on the question of MFN, it was because of the importance they attach to it.
The Ambassador then raised the question of negotiations for Polish purchase in this country of PL 480 grain. He was referring to an agreement similar to that of February 1, 1963—i.e., one, a part under which would be procured for cash, the rest for local currencies with eventual repayment in dollars. He pointed out that although obligated on February 1 to buy for cash only 200,000 tons of American grain, Poland had already purchased over 400,000 tons from the US, a fact over which Secretary Freeman had expressed his satisfaction in Warsaw. Poland anticipates that it must import about 2.5 million tons of foreign grain annually for several years to come, and it must plan on satisfying these requirements from several countries offering a source of supply. He referred to a conversation in Warsaw on September 6 between Ambassador Cabot and Foreign Trade Minister Trampczynski,2 in which the latter indicated that wheat purchases are so important to the Poles that they are willing to initiate cash purchases now, if the US can give some indication regarding the approximate amount of PL 480 sales envisaged. He recalled that in June Mr. Tyler had indicated that an answer to the Polish request would be forthcoming at the end of the summer. The Poles like to feel that summer is over already. He closed his presentation by saying he would be grateful if the Secretary could comment on the state of general bilateral relations and more particularly on the two specific problems he had raised.
The Secretary remarked that Ambassador Drozniak doubtless would be raising these questions in more detail with Mr. Tyler. Moreover, he himself might have to see the Ambassador again soon since other commitments of his time might prevent him from saying all he wished today. He too characterized the test-ban treaty as an indication [Page 176] of progress. The possibility of further progress depended upon whether some points on which the US and other Western nations are willing to move ahead can be found which coincide with those on which the USSR is willing to move. Nevertheless, the Secretary conceded a general improvement in the atmosphere.
Regarding MFN, the Secretary stated that Congress has not yet acted. He believed the Ambassador was aware of the Administration’s standpoint. In confidence, he referred to closed Congressional committee sessions on the MFN question, during which representatives of Congress have expressed reservations regarding Polish actions in Laos. As the US watches developments in Laos, it does not feel that the Polish ICC representative is acting in the spirit of the Geneva accords, and naturally this has a bad effect on US attitudes toward MFN treatment of Poland. The Secretary pointed out, again in confidence, that there in fact are some persons in Congress willing to move on MFN for Yugoslavia, but not for Poland, and principally because of events in Laos. While in Moscow recently, he had the impression that Moscow was more relaxed regarding Laos than was the Polish ICC representative himself. He said he felt further that Mr. Thee was more responsive to attitudes in Hanoi and Peiping than were the Moscow leaders.
Ambassador Drozniak interposed to comment that while developments during the first half of this year may have caused some in the US to feel this way, he had not seen or heard any adverse comments regarding Mr. Thee since his recall to Warsaw in June and subsequent return to Laos.
The Secretary rejoined that he had expressed his encouragement over Mr. Thee’s attitude to Ambassador Drozniak prior to the latter’s departure for Warsaw only to find on his desk after the conversation a cable concerning the Polish ICC representative which nearly prompted him in anger to telephone the Ambassador to take back his earlier remark.
As for PL 480, the Secretary said the question requires some further thinking on the part of the US, although he agreed that the Poles deserve an answer to their request in the near future. He inquired as to the status of the February 1963 agreement.
Mr. Dobrosielski explained that all sales and deliveries had been completed. Furthermore, talks on that agreement had been initiated in June 1962, but the agreement had been delayed by the long deliberations in Congress over the Trade Expansion Act; otherwise, there would have been a 1962 agreement instead of the one in February 1963.
The Secretary commented that the question of PL 480 sales was affected by other considerations. The Foreign Aid Bill would not come before Congress before October. He also indicated technical problems the [Page 177] Department still has to think about, all of which prevented him from giving an answer today. Mr. Tyler confirmed that we are actively considering the question and hope to give the Ambassador an answer soon.
Ambassador Drozniak acknowledged the existing difficulties, but reiterated his government’s interest in obtaining some indication of approximate amounts under a new agreement, particularly since Poland is ready to initiate cash purchases. He pointed out that credit terms for commercial sales of US wheat were less favorable than those obtainable from countries like Canada and France. Polish foreign currency assets are limited, and it is necessary to keep close account of the balance. Since certain amounts must be allocated for US purchases, the Poles desired to commence these purchases as soon as possible.
The Secretary offered to see whether anything could be done in anticipation of negotiations that would have the effect of shortening their duration when they did take place. He agreed to study the matter carefully and to discuss it with Secretary Freeman.
- Source: Department of State, Central Files, POL Pol–US. Confidential. Drafted by Malin and approved in S on September 17.↩
- Rapacki returned to his duties as Foreign Minister on July 1.↩
- Cabot reported on discussions with Trampczynski in telegram 463 from Warsaw, September 6. (Department of State, Central Files, AID (US) 15–Pol)↩