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ACTION EUR-12
INFO OCT-01 ISO-00 SCA-01 CIAE-00 DODE-00 INR-07 NSAE-00
PA-01 USIA-06 PRS-01 SP-02 EB-07 COME-00 TRSE-00
OMB-01 /039 W
--------------------- 126813
R 081902Z OCT 76
FM AMEMBASSY BRUSSELS
TO SECSTATE WASHDC 8105
AMEMBASSY LUXEMBOURG
AMEMBASSY WARSAW
INFO AMEMBASSY BONN
AMEMBASSY LONDON
AMEMBASSY MOSCOW
AMEMBASSY PARIS
AMEMBASSY THE HAGUE
USMISSION EC BRUSSELS
USMISSION NATO
USMISSION OECD PARIS
C O N F I D E N T I A L BRUSSELS 09947
E.O. 11652: GDS
TAGS: EEWT, BE, PL
SUBJECT: POLISH PRIME MINISTER VISITS BELGIUM, SIGNS SEVERAL
ECONOMIC AGREEMENT
1. SUMMARY: POLISH PRIME MINISTER PIOTR JAROSZEWICZ PAID
AN OFFICIAL VISIT TO BELGIUM SEPT 13-15. THE VISIT WAS
EVIDENTLY A POLITICAL SUCCESS FOR BOTH GOVERNMENTS. THE MAIN
BUSINESS ON THE MINDS OF THE POLES WAS ECONOMIC, HOWEVER,
AND IN THAT FIELD THEY ALSO EXPRESSED SATISFACTION OVER THE
FINANCIAL AGREEMENTS AND COMMERCIAL UNDERSTANDINGS ARRIVED
AT DURING THREE DAYS OF TALKS. THE CHIEF AGREEMENT WAS TO
PROLONG THE VALIDITY PERIOD OF A POLISH LINE OF CREDIT FOR
13 BILLION BELGIAN FRANCS AGREED TO IN 1973, ONLY HALF OF
WHICH HAS THUS FAR BEEN DRAWN DOWN. IN ADDITION, A
PROTOCOL WAS SIGNED ON INDUSTRIAL COOPERATION, AND
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SATISFACTORY TALKS WERE HELD WITH THE BELGIAN STEEL INDUSTRY,
LEADING TO A NEW LONG-TERM BUYING ARRANGEMENT FOR POLISH
COKING COAL. A TOURISM AGREEMENT PROPOSED BY POLAND COULD
NOT BE AGREED ON IN TIME FOR THIS VISIT BUT MAY BE SIGNED AT
A LATER DATE. END SUMMARY.
2. THE ATMOSPHERE FOR THE JAROSZEWICZ VISIT WAS WARM AND
FRIENDLY. THE BELGIAN MEDIA PLAYED UP THE FACT THAT POLISH
LEADER GIEREK HAD LIVED AND WORKED IN BELGIUM IN THE '40S
AND SPEAKS FLUENT DUTCH, AND THE BELGIAN GOVERNMENT TOOK
SATISFACTION IN REGARDING THEIR RELATIONS WITH THE POLISH
GOVERNMENT AS A MODEL FOR EAST-WEST RELATIONS. ACCORDING TO
THE BELGIAN PRESS AND OUR DISCUSSIONS WITH SEVERAL GOVERNMENT
OFFICIALS, THE ONCE-OVER-LIGHTLY POLITICAL DISCUSSIONS BETWEEN
PRIME MINISTERS JAROSZEWICZ AND TINDEMANS DELAT MAINLY WITH
FOLLOW-UP OF LAST YEAR'S HELSINKI AGREEMENT.
3. THE MOST IMPORTANT ECONOMIC AGREEMENT REACHED WAS TO
EXTEND THE PERIOD OF AVAILABILITY OF LINES OF CREDIT TO THE
POLISH GOVERNMENT BY BELGIAN BANKS BY EXTENDING THE GUARANTEE
OF THESE LOANS BY THE BELGIAN OFFICE NATIONAL DU DUCROIRE.
SOME 13 BILLION BF HAS BEEN AVAILABLE TO POLAND SINCE 1973
TO FINANCE THE PURCHASE OF BELGIAN-MANUFACTURED GOODS,
STEEL PRODUCTS, AND CONSUMER PRODUCTS, BUT TO DATE ONLY
ABOUT HALF OF THESE CREDITS HAVE BEEN UTILIZED. THE
BELGIANS ACKNOWLEDGED POLAND'S WISH THAT THEY OFFER
INTEREST RATES COMPETITIVE WITH THOSE FROM FRANCE AND
THE FRG, BUT THEY ASSUMED NO OBLIGATION TO DO SO. A MINOR
ACCORD ON FINANCING LOCAL COSTS ATTENDANT ON CONTRACTS
WITH POLAND WAS ALSO REACHED. IN THIS CASE, THE BELGIANS
INSISTED ON PROVISIONS TYING DISBURSEMENT OF FUNDS CLOSELY
TO THE TIMING OF ACTUAL CONTRACT COST NEEDS; THE POLES HAD
PROPOSED TO TAKE CONTROL OF FUNDS IMMEDIATELY, EVEN TO COVER
COSTS WHICH WOULD NOT BE INCURRED UNTIL SOMETIME IN THE
FUTURE.
4. THE POLISH DELEGATION TALKED WITH BELGIAN STEEL
MANUFACTURERS AND THEIR INDUSTRY ORGANIZATION, AND ARRANGED
FOR A NEW EIGHT-YEAR SUPPLY ARRANGEMENT OF COKING COAL, TO BE
PARTLY OFFSET BY POLISH PURCHASES OF BELGIAN STEEL AND STEEL
PRODUCTS. A PREVIOUS LONG-TERM COAL SUPPLY ARRANGEMENT
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EXPIRED IN 1975, AND DURING THE PERIOD SINCE THEN
BELGIUM HAS BOUGHT INCREASED AMOUNTS OF COAL FROM THE
U.S. ON A SPOT BASIS, AS WELL AS FROM ELSEWHERE. THE NEW
AGREEMENT, TOGETHER WITH BELGIAN DOMESTIC PRODUCTION AND
TRADITIONAL PURCHASES FROM THE FRG, WILL COVER THE BULK OF
BELGIAN NEEDS FOR COKING COAL THROUGH 1984.
5. THE TWO GOVERNMENTS (ACTUALLY, THE POLISH GOVERNMENT
AND THE BLEU--BELGIUM-LUXEMBOURG ECONOMIC UNION) ALSO
SIGNED A PROTOCOL ON INDUSTRIAL COOPERATION, WHICH
INCLUDES A CONFIDENTIAL LIST OF PRODUCTS CONTEMPLATED FOR
INCLUSION BY BOTH PARTIES. (WE ARE POUCHING THE TEXT OF
THE PROTOCOL WITHOUT THE ANNEXED LIST OF PRODUCTS, WHICH IS
CLASSIFIED BY THE BELGIANS AS "COMMERCIAL CONFIDENTIAL"
AND IS WITHHELD EVEN FROM THE EC COMMISSION). THIS PROTOCOL
IS A REGULAR PART OF BELGIAN BILATERAL HIGH-LEVEL MEETINGS
WITH EASTERN EUROPEAN COUNTRIES, ALTHOUGH IT HAS LITTLE
PRACTICAL IMPORTANCE. IN THE NEGOTIATION OF IT, THE POLES
PROPOSED NUMEROUS CLAUSES BEARING ON TRADE POLICY, WHICH IS
AN EC PREROGATIVE, AND OTHER MATTERS CONTRARY TO BELGIAN
POLICY. THIS TOO HAS HAPPENED BEFORE, AND THE BELGIANS
CAREFULLY INSISTED ON REMOVAL OF ALL SUCH PASSAGES BEFORE
AN ACCEPTABLE -- BUT UNINTERESTING -- DOCUMENT COULD BE SIGNED.
6. THE POLES AT THE LAST MINUTE BEFORE THE VISIT PROPOSED
A BILATERAL TOURISM AGREEMENT ALSO TO BE SIGNED DURING THE
VISIT OF JAROSZEWICZ, HANDLING THE BELGIANS PROPOSED TEXTS
IN POLISH, FRENCH AND DUTCH. THE AGREEMENT WOULD COVER
PAYMENT ARRANGEMENTS, CONSULAR QUESTIONS, AND PROMOTION OF
TOURISM, INCLUDING SPECIAL PROVISIONS FOR YOUTH TOURISM
AND FOR TOURISM BY CAR. THE BELGIANS, WHO HAVE AN AGREEMENT
ON THIS SUBJECT WITH THE SOVIET UNION, DID NOT OBJECT IN
PRINCIPLE TO NEGOTIATING ANOTHER SUCH AGREEMENT WITH
THE POLES, AND THEY HANDLED THE POLISH DRAFT ON AN URGENT
BASIS. AFTER ASCERTAINING THAT THE THREE LANGUAGE TEXTS
WERE TECHNICALLY ACCEPTABLE, THE BELGIANS DISCUSSED THE
TEXT IN AN INTERAGENCY GROUP AND CONCLUDED THAT SUBSTANTIAL
REVISION WOULD BE NEEDED, INCLUDING ELIMATION OF THE SPECIAL
PROVISIONS FOR YOUTH AND AUTO TOURISM. THE BELGIAN TEXT
HAD TO BE REFERRED TO WARSAW FOR POLISH INTERAGENCY CLEARANCE,
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WHICH COULD NOT BE COMPLETED IN TIME FOR THE PRIME MINISTER'S
VISIT. THAT AGREEMENT MAY BE COMPLETED AT A LATER DATE.
7. ON THE POLISH ECONOMIC SITUATION IN GENERAL, WE UNDERSTAND
THAT THE POLISH DELEGATION TRIED TO REASSURE THE BELGIANS
ABOUT THE VITALITY OF THE POLISH ECONOMY BY POINTING TO
RISES IN INDUSTRIAL AND AGRICULTURAL PRODUCTION, EMPLOYMENT
AND SALARIES. THE POLES ADMITTED, HOWEVER, THAT THERE WRE
AGRICULTURAL PROBLEMS. ABOUT 7 MILLION TONS OF WHEAT MUST
BE IMPORTED THIS YEAR, AND POTATO PRODUCTION HAS DECLINED
FROM 51 MILLION TONS IN 1975 TO 40 MILLION TONS THIS YEAR.
THEY ALSO SAID THAT THE TRANSPORTATION SYSTEM WAS INADEQUATE.
ON INTERNATIONAL ECONOMIC POLICY, THE POLES SUPPORTED
BREZHNEV'S ECONOMIC PROPOSALS AND SAID THAT COMECON WAS
WORKING WELL. THEY ALSO SUPPORTED THE CREATION OF A
EUROPEAN BANK.
8. WE ARE SENDING UNDER COVER OF AN AIRGRAM SEVERAL
DOCUMENTS RELATING TO THE POLISH OFFICIAL VISIT. THEY
INCLUDE THE TEXT OF THE PROTOCOL ON INDUSTRIAL
COOPERATION, A PUBLISHED INTERVIEW WITH JAROSZEWICZ,
THE TOAST PRONOUNCED BY PRIME MINISTER TINDEMANS AT
HIS DINNER FOR JAROSZEWICZ, AND NEWS ARTICLES ON THE
RESULTS OF THE VISIT.FIRESTONE
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