C O N F I D E N T I A L SECTION 01 OF 02 KYIV 004407

SIPDIS

SIPDIS

E.O. 12958: DECL: 08/31/2016
TAGS: PGOV ENRG PL UP
SUBJECT: UKRAINE/POLAND: PM KACZYNSKI'S VISIT SIGNALS
CONTINUITY OF WORKING RELATIONSHIP


Classified By: Political Counselor Kent Logsdon for reasons 1.4(b,d)


1. (C) Summary: Both the Ukrainian and Polish sides hailed
the November 15 visit of Polish PM Jaroslaw Kaczynski to Kyiv
as a solid sign of continuity in Poland's working
relationship with the government of Ukrainian PM Yanukovych.
During his one-day visit, Kaczynski met with Yanukovych,
President Yushchenko, and opposition politician Yuliya
Tymoshenko. Although the Poles are taking a wait-and-see
attitude regarding the direction Yanukovych will take
Ukraine, they are encouraged by recent progress on
WTO-related bills in parliament (Rada) and continued
expansion of bilateral trade. Kaczynski and Yanukovych
agreed to form a working group on a project to utilize the
Odesa-Brody pipeline to deliver oil to the Polish-owned
refinery in Kralupy, Czech Republic, and to take steps to
hold a summit meeting of the leaders of Ukraine, Poland,
Uzbekistan, and Kazakhstan on energy issues in Kyiv next
year. They also agreed to modernize and expand border
crossing facilities, work towards ending the ban on Polish
meat imports and to cooperate in the aviation sector.
Kaczynski invited Yanukovych to visit Poland. End summary.

The Itinerary
--------------


2. (U) Polish Prime Minister Jaroslaw Kaczynski made a
one-day working visit to Kyiv November 15. His delegation
included Economy Minister Piotr Wozniak (whose portfolio also
includes energy) and vice ministers of Agriculture, Culture,
Defense, and Interior. The Polish government official
responsible for preservation of cultural and historical sites
of significance to Poland also accompanied the delegation.
Kaczynski chaired an intergovernmental commission with his
counterpart, Ukrainian Prime Minister Viktor Yanukovych, met
with President Yushchenko and separately with opposition
politicians Yuliya Tymoshenko and Ukrainian Peoples' Party
head Yuriy Kostenko.


3. (U) Because of the brevity of the visit, Kaczynski did not
meet separately with Foreign Minister Tarasyuk, but Tarasyuk

did sit in on the Yushchenko meeting. Polish Embassy Deputy
Head of Mission Roman Kowalczuk noted to us November 22 that
since Rada Speaker Oleksandr Moroz was out of the country no
meeting occurred at the Rada. Other delegation members held
meetings with their counterparts, most notably a session of
the Ukraine-Poland intergovernmental economic cooperation
commission that Wozniak and Ukrainian Energy Minister Yuriy
Boyko co-chaired.

Strong Ties
--------------


4. (U) The two countries enjoy strong economic ties. As of
October 1, 2006, Poland is Ukraine's 11th largest investor
(behind 5 other EU members), with a stock of $331 million,
while total Ukrainian direct investment in Poland was $22
million. It was the second greatest destination for Ukrainian
FDI after Russia. Total trade turn-over was $3.6 billion, of
which Polish exports to Ukraine constituted $2.6 billion and
imports, $1 billion. Kowalczuk claimed that bilateral trade
in 2006 was expected to grow by 33% over last year, with
strong trade growth continuing in the future whether or not
Ukraine joined WTO.


5. (U) Ukraine and Poland also have historically strong ties,
with significant parts of western Ukraine once part of Poland
or the Polish Lithuanian Commonwealth, so that a number of
important Polish historical figures were actually born in
what is now Ukrainian territory. While the two countries'
paths have diverged since independence (Poland moving quickly
toward western Europe and first NATO then EU membership, and
Ukraine adopting a more ambivalent approach), bilateral
relations warmed considerably after the December 2004 Orange
Revolution. Poland has been a consistent advocate for
Ukraine within the EU and has pushed strongly for Ukraine's
early entry into NATO. With a change in the governments of
Ukraine and Poland, leaders of both countries saw the need to
reinforce the relationship.


6. (C) Both Kowalczuk and Ukrainian MFA Poland desk officer
Yuriy Tokar noted that PM Kaczynski's visit signified a
willingness on Poland's part to work with the Yanukovych
government. Kowalczuk observed that the two prime ministers
were able to build on a relationship that began when both
attended a September 6 Economic Forum meeting in Krynica,
Poland. During his meeting with Kaczynski, President
Yushchenko had averred that Yanukovych had changed himself
but Kowalczuk cautioned that "Yushchenko is an optimist."
Kowalczuk noted the course of Yanukovych's government should
be clearer over the next several months.

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Modest Achievements
--------------


7. (C) Kaczynski and Yanukovych agreed to set up a working
group to implement a project to pump crude oil through the
Odesa-Brody pipeline to the Polish owned refinery in the
Czech city of Kralupy. Tokar told us there were also plans
for a summit meeting of the leaders of Ukraine, Poland,
Uzbekistan, and Kazakhstan on energy issues in Kyiv early
next year. Regional cooperation with the Visegrad Group and
the prospects for the Transport Corridor Europe-Caucasus-Asia
were also discussed. Septel will report on recent
developments in the energy sector.


8. (SBU) Tokar also said agreement had been reached to expand
and modernize the border crossing facilities and that efforts
would be made to ease the ban on Polish meat imports to
Ukraine. According to Tokar, Yanukovych told Kaczynski that
the needed WTO legislation would be passed by the Rada by the
21st of December. Sounding a more cautious note, Kowalczuk
said that the recent Rada action is a "good sign" but "we
don't know what the conclusion will be."


9. (SBU) Tokar said Kaczynski supported Ukraine's eventual
entry into NATO and considered it an important step towards
integration into the EU but realizes that public support in
Ukraine for entry into NATO was currently weak. Tokar also
said that Ukraine's relationship with the EU was discussed
and that Ukraine had been grateful for Poland's support on EU
matters. Kaczynski welcomed a reciprocal Yanukovych visit to
Poland.


10. (U) Visit Embassy Kyiv's classified website:
www.state.sgov.gov/p/eur/kiev.
Taylor