146. Memorandum of Conversation1
- Rumanian/US Relations
- The Secretary
- Mr. Givan, EUR
- Foreign Minister Manescu
- Vasile Pungan, Ministry of Foreign Affairs
- Sergiu Celac, Interpreter
Minister Manescu proposed that he begin by reviewing bilateral relations. He said he was satisfied that relations have improved and that the spirit in approaching mutual problems is good and equitable. Prospects are good, steps forward are being taken and he is most conscious of the support given by the Department of State and the Secretary personally. Moving to specific subjects, Manescu said his government has granted agreement to Mr. Crawford. Meanwhile Crawford has acted in his own capacity most tactfully and without preconceived ideas. He has assured himself of good conditions of work.
The Secretary said he could verify that Crawford is most seriously interested in improving our relations.
Manescu said another outstanding problem is the consular convention. This would be Rumania’s first such agreement with a Western country. The draft has been approved by the Government and it has been handed to Crawford. Presumably talks will start this month in Washington. There will no doubt be some discussions, but there are no problems that are insurmountable. There is the possibility of an understanding. The Secretary said we would do our best too.
Manescu said cultural exchange arrangements for 1965–66 are now being achieved which will increase present relations. There has been an important exchange of visits, including a group of American power experts. There is, finally, the problem of economic and trade relations. After the Gaston-Marin mission, Rumanian authorities took steps to see that all agreements arrived at would be effectively implemented.
A team is to be sent to the U.S. soon to negotiate a large purchase of cotton. There are also 13 Rumanian specialists surveying the American [Page 400] market. Their preliminary results show some possibilities. American demand exists for Rumanian products. Some of this demand can be met now, some in the future by adapting production to special American requirements.
Certain observations should be made, however, according to Manescu. For instance, the Export-Import Bank is showing some concern that orders for technical installations should not be given as a package, which raises problems of financing. In their view this concern is unfounded. A number of contracts are quite probable, including a catalytic cracking plant and a synthetic rubber plant. These will amount to about $100 million. This is not a great amount in relation to U.S. global figures, but American producers seem interested in selling these installations, and Rumania is interested in buying them. The contracts have not been concluded, however, because such a large amount is a problem for Rumania. Much or all of this could be covered by U.S. sales, but unfortunately the very high tariffs make sales almost impracticable. Where most favored nations pay 17 percent tariffs, Rumania must pay 40 percent.
Concluding this subject, Manescu said the Rumanians are counting on increased understanding of this problem and on the fact that the present Administration operates under conditions that give it a freer hand to settle the issue and improve bilateral relations. In any event the existence of so many important problems shows that our relations cover a broad field.
The Secretary replied that he fully recognized that trade opportunities are limited in the absence of an MFN relationship. Minister Manescu may know, however, that both the Executive and the Legislative Branches are actively taking up the problem of the bases of trade with Eastern Europe. Senator Fulbright is making an urgent and detailed study of the subject. The Secretary said he opened the hearings before the Senator’s Committee a few months ago.2 The Minister also knows that American businessmen are expressing more interest in changing the situation. Chambers of Commerce have taken up the issue and business groups have gone to Eastern Europe. The State Department is in close touch with these business leaders.
The Secretary said he personally hoped Congress would amend the legislation to permit us to extend MFN, but we cannot say exactly when this will happen. Congress will almost certainly take up the question early in the next session. In view of the need for legislation, there is a timing problem.[Page 401]
There is also another factor involving timing. From the standpoint of the politics of trade, it would help if we could see some progress in GATT negotiations in connection with the Kennedy Round. Talking about tariff reductions across the board is easier politically than individual cases. Meanwhile we will do what we can where opportunities pre-sent themselves. This is what we did last July when we introduced general licensing procedures. We will do our best to handle the problem of the Export-Import Bank within the present legislation. We are prepared to extend some general licenses now that we were not prepared to extend three years ago.
There is one field, the Secretary said, where quick improvement is possible—tourism. Americans have not been able to travel easily in Rumania and neighboring countries for 20 years and have accumulated a great backlog of interest in the area. From Rumania’s point of view, the promotion of tourism could be very important. From our point of view, as tourism grows we would hope the Rumanians would earmark a part of their tourist proceeds to permit Rumanian tourists to come to the U.S.
The Secretary said he would look into the Export-Import Bank problem when he returned to Washington. He said he was somewhat optimistic about the development of economic relations, although he recognized the importance of the MFN problem. We are both victims of history in this respect, but we will try to reverse it if we can. It would be useful if we could get certain Senators and Congressmen to visit Rumania next year. On this question Manescu said the Secretary would have his entire support.
- Source: Department of State, Secretary’s Memoranda of Conversation: Lot 65 D 330. Confidential. Drafted by Givan and approved in S on December 15. The meeting was held at USUN. The source text is labeled “Part I of II;” a second memorandum of this conversation, dealing with Communist China, is ibid.↩
- For text of Rusk’s March 13 statement before the Senate Foreign Relations Committee, see Department of State Bulletin, March 30, 1964, pp. 474–484.↩