87. Telegram From the Embassy in Poland to the Department of State0
1118. Passage MFN by Congress1 enables us for first time in some 19 months to plan our policy for relations with Poland on reasonably sound foundations. During this protracted period over-riding importance [Page 181] MFN and uncertainty re congressional action have made policy formulation almost impossible. On one hand we have been unable pursue effectively such matters as bond settlement and removal of Thee from Laos, not to mention numerous minor grievances. On other hand it has been difficult to know how far to go, for example with regard to PL–480, in our efforts further special relations which we have steadily tried since 1956 to establish with Poland.
With MFN question settled, I hope that a new PL 480 agreement for approximately 30 million dollars will soon be concluded with Poland. I recommend that we do not offer larger amount than this even though I expect Poles will strongly seek more. If Department Agriculture insists, I would not object to our requiring tie-in sales. However I would urge that in addition we make every effort facilitate availability of competitive credit terms for Poles and I think they will then buy more from us in fact than they would be willing to commit themselves to buy in an agreement.
Outstanding issue between us today which might now be negotiable is presumably question of Polish defaulted bonds. I have not pursued this in recent months since MFN uncertainties obviously impinged on Polish ability to service this Department. I believe I should now raise this matter again. In their present economic difficulties Poles will almost certainly refuse to assume these obligations and I do not think we should insist just yet, for example, on refusing further PL 480 transactions (I do feel, however, that this remains unfinished business). I also think Poles should be reminded in any PL 480 negotiations that it is difficult to see how they can assume new obligations if they are unable to meet old ones in not dissimilar amounts.
Question of travel restrictions in Poland (presuming we reject their request for reconsideration of ours) might be taken in connection with PL 480 agreement but I do not recommend this. My feeling is that we would either pay too high a price for what we get or run the risk that Poles would reject whole deal with disastrous effects on what we are seeking to accomplish in this country. Department is of course aware Poles are very sensitive with regard to attaching any political conditions to PL 480 deals.
We can scarcely attach any conditions with regard to actions of any new Polish ICC representative in Laos in connection with PL 480 agreement. Should, however, Polish Commissioner’s actions be subject to justified exception on our part, we should be now in stronger position object to them.
In regard firmly expressed Polish intentions seek reciprocity regarding travel restrictions, I feel that they [we?] would be prepared show Poles concretely that reciprocity is two-way street. One way do this would be by abolishing immunities for Polish White List personnel. [Page 182] However, quite apart from legal difficulties Department has previously mentioned in this regard, I see some disadvantages to such move. It would abolish precarious protection we have been able to secure for our own non-commissioned personnel here. It might result in Polish retaliation against us in sectors where we are vulnerable, for example by stopping Embassy support or by restricting free entry privileges. On other hand, it might, in view of fact that Poles gave commissioned officers in non-commissioned positions in Washington, make our travel restrictions more effective since any improper activities of their White List personnel after immunity was cancelled might result in legal measures against their non-commissioned personnel for such activities. I am inclined to think that this is card we should hold and play later if desirable.
If Poles establish travel restrictions in retaliation, I believe that I should be instructed to argue with them various matters in which we have been subjected to unfair and discriminatory treatment. Pole can go to PKO and get 72 zloties for his dollar whereas foreigners can get only 24. In Washington Polish Government and its employees can buy or lease land, houses or apartments on competitive market without securing permission from US Government. In Warsaw we can secure these only from what amounts to a government monopoly and at extortionate prices. I do not expect Poles would give us any satisfaction in these matters and I do not recommend severe pressure on them to that end. My thought is that we should keep before Poles fact that we have legitimate grievances in order to put us in better posture re action other matters as occasion arises.
Polish officials can still travel over most of the US and meet with Americans in seminars and round-table discussions, can deliver speeches on any subject, and are generally unimpeded in making their presence felt in US. In Poland we are perfectly aware that such contacts between Poles and American officials are prevented by Polish authorities.
We have not heard whether any final decision has been reached with regard possible retaliation against Poles for unjustified expulsion our two attaches last fall. Should Poles retaliate by establishing travel restrictions on US officials in Poland, I am inclined to think that it would now be advisable to expel some Polish officer against whom there is some evidence in retaliation for Polish action. This might of course precipitate further retaliation on their part and might start descending spiral of relations. I am inclined to think however that effect would be to remind Poles that strict reciprocity is not necessarily best basis for conducting international relations, while not sufficiently annoying them to precipitate undesirable repercussions. It is of course most important not to precipitate descending spiral in our relations but experience suggests [Page 183] to me that Polish Communists react better to prudent firmness than to flabbiness.
I think I should also remind Foreign Office that we have yet to hear anything from them on our proposed consular convention despite several followups on our part. We surmise Poles may have wished to see in which direction our relations would turn or what would happen in our consular negotiations with Soviets before replying to our proposals.