US embassy cable - 03ZAGREB1927

C O N F I D E N T I A L  ZAGREB 001927 
 
SIPDIS 
 
 
E.O. 12958: DECL: 09/05/2013 
TAGS: PREL, PGOV, PBTS, ECON, HR, Regional Issues 
SUBJECT: TIME RUNNING OUT FOR AGREEMENT ON PLOCE PORT 
 
REF: 02 ZAGREB 01295 
 
Classified By: POLOFF DARREN TAYLOR: REASON 1.5 (B) AND (D) 
 
SUMMARY 
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1. (C) PM Racan has vowed that Croatia will ratify the Ploce 
Port Agreement by the end of September despite continued 
local and parliamentary opposition to the agreement.  GOC and 
GOBiH have met frequently in recent weeks to try to reach a 
compromise that would provide Croatia the political cover to 
move forward on ratification.  Results have been encouraging, 
but some stumbling blocks remain after the BIH side recently 
voiced concerns that the new annex negotiated by the two 
governments did not go far enough in addressing its concerns 
over the method for settling future disputes.    The Acting 
Head of the Neighboring Relations Department, Davor Vidis, 
was not optimistic: he told us that Racan appears determined 
to bring the Ploce issue to closure, but it was too early to 
tell if parliament would ratify the agreement anytime soon. 
There is growing concern that the window of opportunity to 
resolve the Ploce Port issue is closing as election season 
heats up.  End Summary. 
 
Progress on Ploce Port Agreement 
-------------------------------- 
 
2. (C) While on an official trip to BiH in July, PM Racan 
declared that the Ploce Port agreement, first signed in 1999, 
would be resolved by the end of September.  In agreeing to an 
annex, GOC and GOBIH officials have eliminated the 
international arbiter called for in the original agreement. 
This was a central issue for the GOC because of concerns that 
the international arbiter would be part of a seven-person 
commission overseeing the port's activities, and would 
theoretically be able to cast the deciding vote when disputes 
arose.  The Croatians have balked because this would give a 
foreign mediator the right to make final decisions about a 
Croatian Port on Croatian territory -- in their view 
infringing on Croatia,s territorial sovereignty.  Racan and 
Picula were certain that parliament would not ratify the 
agreement in its current form and without an annex. 
 
But Time Running Out 
-------------------- 
 
3. (C) "The window of opportunity for a final agreement on 
the Ploce Port is closing fast."  This is what the Acting 
Head of the Neighboring Relations Department Davor Vidis told 
us when we met with him on August 27.  Vidis claimed that GOC 
officials accompanying Racan on the BiH visit were surprised 
by his declaration because of continued local and 
parliamentary opposition to the agreement.  His reference to 
the shrinking window of opportunity to resolve Ploce is 
linked to the recent snag in the negotiations.  Last week, a 
member of the BiH presidency rejected the newly negotiated 
annex to the current agreement because it did not contain a 
specific deadline for the ratification of the agreement and 
final procedures for establishing a commission to resolve 
possible future disputes over management of the port.  Vidis 
said that GOBiH appeared to be backtracking on the annex. 
 
 
4. (C) Vidis predicted that, if the Ploce Port Agreement were 
not resolved within the next three weeks, it would languish 
until next spring -- well after Croatia's elections.  Foreign 
policy issues, he said, would not receive much attention 
during the campaign, and Ploce was in any case too divisive. 
He commented that key parliament officials, including Deputy 
Speaker of the Parliament Tomac, who strongly opposed 
ratifying the agreement in its current form, have not 
indicated whether they would support ratifying the Ploce 
agreement if it contained a new annex.  He noted that HSLS 
president Budisa was already causing problems by voicing his 
opposition to the agreement even if it contained the annex. 
 
The GOC Strategy 
---------------- 
 
5. (C) Vidis said the GOC strategy will be to lay low on the 
Ploce issue to allow for a "cooling off" period.  He stated 
that the GOC would then try to resurrect negotiations in a 
low-key fashion with the hopes of addressing GOBiH concerns 
and reaching a final agreement.  The GOC would then seek to 
have parliament ratify the agreement through urgent 
procedure.  If this strategy failed, Croatia would have no 
other option except to allow the new government to try to 
resolve the issue.  He noted that local opposition in Ploce 
to ratifying the agreement was hardening, which is also 
complicating matters and leaving the GOC little room to 
 
maneuver.  Political leaders in Ploce continued to lobby key 
members of parliament against the agreement.  He was not 
optimistic that the GOC strategy would prevail but said that 
the GOC had limited options. 
 
Comment 
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6. (C) The Ploce Agreement was politically sensitive even 
before Croatia's disagreement with Slovenia over declaration 
of an Exclusive Economic Zone turned up the political heat on 
border issues.  In the current environment, we expect Racan 
to back away from his declaration that he will secure Ploce 
ratification in September and that this issue will languish 
until the next government takes it up.  During our meeting, 
Vidis seemed desperate to reach a final agreement with the 
GOBiH before elections.  While stressing that the GOC would 
do its part to reach an agreement in the next few weeks, 
Vidis was not convinced that GOBiH officials shared the same 
sense of urgency, particularly since the BiH parliament has 
already ratified the agreement. 
FRANK 
 
 
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