US embassy cable - 03ZAGREB2656

C O N F I D E N T I A L  ZAGREB 002656 
 
SIPDIS 
 
 
E.O. 12958: DECL: 12/19/2013 
TAGS: PREL, PGOV, HR, Political Parties/Elections 
SUBJECT: AMBASSADOR'S MEETING WITH PM-DESIGNATE SANADER: 
FLAGGING U.S. CONCERNS 
 
Classified By: Nicholas Hill, Political-Economic Counselor, for reasons 
: 1.5 (b) and (d). 
 
Summary 
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Summary 
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1.   (C) We have "extremely high expectations."  That was how 
Ivo Sanader described on December 19 what he hopes will be 
very good bilateral relations with the U.S. when he becomes 
Croatia's Prime Minister next week.  Meeting at the 
Ambassador's request in the HDZ party headquarters, Sanader 
stressed that his early priorities would be moving full 
throttle toward EU and NATO membership.  He said he 
understands U.S. priorities in Croatia and wants to become 
our "strategic partner" in the region.  When the Ambassador 
flagged several issues of concern to the U.S., Sanader took 
them on board.  He promised to work to ratify the MOU on 
intellectual property in January.  On refugee returns, he 
said he wants to move faster than the previous government and 
has already made progress with Croatia's leading Serbian 
political party.  On ICTY, he said he was determined to get 
relations off to a good start (septel to follow).  On an 
Article 98 agreement, Sanader promised to move as fast as he 
could, but obvious near-term constraints loomed.  End 
summary. 
 
NATO a Bigger Priority 
---------------------- 
 
2.   (C) Prime Minister-designate Ivo Sanader, joined by 
incoming Foreign Minister Miomir Zuzul, met the Ambassador on 
December 19 at HDZ headquarters.  He said he intends to be 
"very ambitious" in his first months in office.  Priority 
would remain getting Croatia into NATO and the EU.  NATO 
membership was a strategic priority -- Sanader hopes it can 
be accomplished by 2006 -- but he sees it as part of a 
process that can only speed up Croatia's EU membership.  The 
Prime Minister-designate pointed to the 10 new countries 
entering the EU next spring as an example of this symbiotic 
relationship.  He said he looks forward to discussing 
Croatia's NATO aspirations at the Istanbul Summit in May. 
The Ambassador stressed that the U.S. remains committed to 
seeing Croatia join NATO, hoped that the government can 
continue the requisite defense reforms, but cautioned that 
NATO's timetable is also governed by other outside factors. 
 
EU Aspirations on Track 
----------------------- 
 
3.   (C) Sanader was satisfied that Croatia's EU aspirations 
remain well on track.  He had a good conversation with Romano 
Prodi on December 18.  Prodi had not been "precise" in his 
assurances, but Sanader said he was confident that Croatia 
would receive a positive avis sometime in the spring, and he 
hopes it would be approved by the Council of Ministers 
sometime around June.  In the meantime, German Chancellor 
Shroeder invited Sanader for an official visit to Berlin on 
January 8.  Sanader said he will be in Brussels for meetings 
with Prodi at the European Commission and the new NATO 
Secretary General on January 12-13, and travel to Strasbourg 
 
SIPDIS 
after that.  In a visit that was postponed from this week, he 
plans to be in Rome for meetings with Prime Minister 
Berlusconi and the Pope on January 20.  The new Prime 
Minister's schedule is filling up. 
 
Article 98 
---------- 
 
4.   (C) Related to Croatia's EU focus, Sanader told the 
Ambassador that he wanted to work with us on an Article 98, 
but that he would have to be very cautious.  He said in 
talking to Prodi and others about Croatia's EU aspirations, 
Article 98 was always there -- or, as he put it, always 
"somewhere present in the air."  The Ambassador underscored 
that signing an Article 98 with Croatia remains a priority in 
Washington and that we want to move forward on it.  Sanader 
said he would work with us, but timing would be important. 
He noted it would be enormously difficult to get the 
two-thirds support such an agreement would require in the 
Croatian Parliament, probably not before the European Council 
of Ministers approved Croatia's avis next summer. 
 
IPR MOU 
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5.   (C) When the Ambassador discussed the long-stalled 
Memorandum of Understanding on Intellectual Property Rights 
between Croatia and the U.S., Sanader promised to move it to 
the Croatian Parliament for ratification.  Both Sanader and 
Zuzul were familiar with the issue -- Zuzul had been the 
Croatian Ambassador in Washington when the MOU was first 
 
 
signed in 1998 -- and looked eager not to let it become a 
thorn in our bilateral relations.  Zuzul told the Ambassador 
the problem had always been Croatian Pharmaceutical company 
Pliva's opposition.  The Ambassador noted that he had 
discussed the issue with Pliva's CEO and been assured that 
the company would not oppose ratification.  By way of 
concluding discussion on the MOU, Sanader turned to Zuzul and 
said, "Let's do it immediately."  Zuzul nodded, and they 
indicated it should be ratified by January. 
 
Refugees, Serbian Community 
--------------------------- 
 
6.   (C) Sanader wanted to raise with the Ambassador progress 
he had made with Croatia's leading ethnic Serbian Party 
(SDSS).  SDSS would not join the government but it agreed to 
support the HDZ-led coalition in the Parliament.  To secure 
the agreement, Sanader said, he promised to work much more 
effectively and proactively to secure refugee return and on 
"all other open issues" -- including even tenancy rights, an 
issue which the previous government had dragged out endlessly 
over its mandate.  We "don't want delays like under Racan," 
he said.  The Prime Minister-designate boasted that the new 
coalition now enjoys the support of "all" the minority 
communities in Croatia. 
 
Croatian Troops to Iraq 
----------------------- 
 
7.   (C) Two other issues the Ambassador raised with Sanader 
included sending Croatian troops to Iraq and concern that a 
Croatian ship-yard is contemplating refitting a Libyan naval 
vessel.  After repeated delays, Croatian authorities had 
already indicated tentatively that it would act positively on 
dispatching troops to Iraq, but time ran out in the previous 
government's mandate.  The Ambassador handed Sanader a 
non-paper describing to him the modalities for the new 
government to move forward should it seek to commit troops. 
Sanader took it on board, professed not to know much about 
the subject, but reminded the Ambassador that he had been 
supportive of the U.S. Iraq policy since before the war 
started.  Dispatching troops to Iraq -- the MOD has in mind a 
Special Forces unit -- would, like an Article 98, require a 
two-thirds vote in the Parliament. 
 
Libya Vessel 
------------ 
 
8.   (C) The Ambassador also took the opportunity to brief 
the incoming Prime Minister on the firm U.S. position 
concerning Libya.  There have been reports, he said, that a 
contract had been signed to refit a Libyan naval vessel 
called the "Al-Munyed" at a Rijeka shipyard.  The Ambassador 
stressed that military cooperation with Libya had no 
productive future and could be illegal under U.S. law. 
Sanader said he knew nothing about any possible deal, but 
promised to look into the matter.  The Ambassador urged the 
Prime Minister-designate to take up the matter with President 
Mesic, who has been informed of the U.S. position. 
 
Comment 
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9.   (C) It is prudent to stay in wait-and-see mode, but so 
far the Prime Minister-designate has made no wrong moves or 
statements.  The bad news is clearly that he recognizes the 
difficulty of delivering an Article 98 agreement in the 
immediate future, but he wants to keep working at it.  We 
will see where this leads.  He knows it is important to us 
and that we hold some cards -- in particular, the U.S. has 
been Croatia's biggest NATO backer.  Notwithstanding this 
obstacle, Sanader and Zuzul are keen to get the relationship 
off to the right start.  They want to visit Washington early 
in the new government's mandate and hold some high level 
meetings.  If they stay on the reform course they have 
plotted, and are able to deliver on some of their promises -- 
such as a ratified MOU -- we should be receptive to granting 
the new Prime Minister a good visit sometime early in the new 
year.  We believe it important to reach out to them now, 
especially with the EU moving so quickly to gain their 
support of positions which -- on some issues -- are contrary 
to our own. 
 
FRANK 
 
 
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