Foreign Relations of the United States, 1969–1976, Volume XXIX, Eastern Europe; Eastern Mediterranean, 1969–1972

199. Memorandum of Conversation¹

Washington, October 26, 1970, 10:55 a.m.–12:55 p.m.

PARTICIPANTS

• President Nixon
• Henry A. Kissinger
• Harry G. Barnes, Jr., DCM, Bucharest, American Interpreter
• President Nicolae Ceausescu
• Dumitru Popescu, Member, Executive Committee, Romanian Communist Party
• Sergiu Celac, First Secretary, Ministry of Foreign Affairs, Romanian Interpreter

The President began the talks by saying that he wanted to continue the discussion he had started with President Ceausescu a year ago.² He was glad to note that some progress had been made in the field of economic relations. He was sorry, however, to have heard about the disastrous floods that had hit Romania. Today he hopes it would be possible to explore other areas of cooperation as well as discuss questions of foreign policy.

President Ceausescu responded by noting that indeed there had been some results attained in the economic field. Since the President had mentioned the floods, he wanted to take this occasion to express the thanks of the Romanian people for the help given by the American people, for the sentiment of friendship displayed in this connection. It was true that the floods had caused unprecedented damages, but, thanks to the recovery efforts, most of the damage has been overcome.

So far as economic questions are concerned, Ceausescu noted, as he had said in Bucharest, that further development is hindered by a series of obstacles in American legislation. During his visit he has had useful sessions with American financial and business leaders, which have shown the existence of possibilities for substantial development of economic relations and joint ventures between American and Romanian firms. He realizes that the President and other American officials are encouraging the development of these relations and he thanks the President for this.

The President commented that since their meeting last August, as President Ceausescu was aware, instructions had been given to all agencies of the government—and Dr. Kissinger had concerned himself with this from the White House—to make decisions favorable to increasing economic cooperation with Romania whenever possible within the framework of existing legislation. “We shall continue to follow this policy. I believe,” the President said, “that as the war in Vietnam winds down to a close, the prospects of greater expansion of trade are very good. We think,” he continued, “that the area of credit is very important and have instructed the Export-Import Bank and the Secretary of Commerce to explore every area where through credit there could be increased trade.”³

The point about MFN is one raised by President Ceausescu last year. This will come. It is a problem having to do with the Congress because of the Vietnam war. The President said he could assure President Ceausescu he would move in that direction since it was one of his objectives to get MFN as soon as he could be sure of getting the necessary support in the Congress.

Ceausescu then took up the question of MFN by noting that it was one he had discussed during his visit here and also with a group of members of Congress (the IPU delegation) in Bucharest not long ago. He noted that these members of the American Congress seemed to have a favorable opinion regarding the extension of MFN to Romania, a sentiment which he welcomed. He added that he would remember with satisfaction that the President had said this problem could be solved in the not too distant future.

So far as credits were concerned, Romania, in order to assure its continued rate of growth, has to seek foreign credits. Ceausescu said he would like to be very frank as well as brief because he realized this problem was being discussed here in the United States. At present Romania is running a balance of payments deficit of $300 million. Hopefully this can be liquidated over the next few years and a positive balance achieved. But in the meantime Romania would be interested in credits so as not to impose too many restrictions or too many demands on Romanian economic development. Romania would welcome credits from America under favorable terms, needless to say. Being a developing country, Romania should be accorded credit on a more advantageous basis. Credits are needed for industrial development as well as for starting the construction of dams and irrigation works.

The President inquired if road construction was also in view.

Ceausescu replied that Romania wants to concentrate on drainage and irrigation works and dams, particularly in view of the floods of last spring, at least for the next five years. To be sure, there are road construction plans as well, but the credits are needed especially for the fields mentioned earlier, although any credits could of course be used in a variety of fields.

The President explained that he had inquired about roads because, during his talks with President Tito,⁴ the latter had said how useful it would be if the countries of that area developed a system of roads to open up the countryside. What was President Ceausescuʼs opinion of the idea of such a highway network, including such countries as Romania and Yugoslavia.

Ceausescu said the idea was definitely of interest, but Romania had to use its limited resources for its most urgent needs and this was giving priority to dams and irrigation works, for which a sum of about $3 billion equivalent had been budgeted over the next five years. In addition, he noted that a dam across the Danube is being constructed jointly with the Yugoslavs and one is being planned with Bulgaria, both dams thus serving as additional links with these two countries.

In addition, to a certain extent, it would be useful to have experienced American firms help develop tourist facilities in Romania, where there is already a beginning but still more could be done.

The President then addressed himself to Ceausescuʼs point of whether Romania could be considered as a developing country. He said he believed this is something that could be done. He would look into the question but, since this status had just been granted to Yugoslavia,⁵ he saw no reason why it could not be accorded to Romania as well. “My decision,” the President continued, “is that we will do this, but no announcement will be made until the bureaucratic procedures are completed, but I will give the President my assurance on this point.”

Dr. Kissinger then noted that loans from the Export-Import Bank were excluded by the Fino Amendment, but White House influence has been used to put together a group of banks which could make private loans. In addition, CCC loans have been made to Romania. With the exception of Yugoslavia, Romania has the most favorable status here. For instance, some two hundred items have been taken off the export control list and recently sale of a hydrocracker was approved.

Ceausescu referred to the fact that discussions had been held with many American companies regarding joint ventures in third markets in such fields as mining and petroleum, but such ventures presuppose credits. What Romania is interested in would be ways of combining Romanian and American experience with the expectation that the American partners would handle the financing. In other words, there are various ways of making use of credits besides the direct way.

The President responded by saying that he would direct the Secretary of Commerce to follow up on President Ceausescuʼs discussions with the business and financial community in New York and in other cities in order to see how appropriate action can be taken on the private side. Actually, the President noted, under our system the possibilities for credits and economic cooperation are greater in the private than in the public sector. In his opinion, it has been very useful that President Ceausescu should have talked with business and financial leaders. This will help direct investments to countries like Romania. In general, private companies have not invested in socialist countries, but if we can make a breakthrough this will be a new expanding type of cooperation which will be very helpful.

Ceausescu then turned to the problem of Romanian adherence to GATT. Romania has been holding discussion with GATT countries for two years and things have moved ahead. Actually the matter could be resolved if the United States would be more flexible. The question of a Romanian commitment to increase its imports from GATT member countries by a fixed annual quota is what has caused the difficulty. Although Romaniaʼs economic ties with these countries have doubled, it still does not want to have to commit itself so rigidly. The United States is now the only country insisting on such a formula. For Romania, adherence to GATT would create very favorable conditions for trade with the United States and with other countries. Romania would like this obstacle removed.

The President replied that he would look into the matter, with which he was not too familiar. In general, his attitude was sympathetic so far as increased trade, cooperation and credits between the United States and Romania was concerned. “President Ceausescu,” he added, “can be assured that we will continue to explore ways to build on the progress already made.”

Ceausescu explained that after adherence to GATT, Romania had in mind entering into discussions with the IMF and the World Bank, but wanted to decide the GATT question first since this will contribute to developing relations with the United States and others. Romania is interested in developing relations over a broad scale. Once more he wanted to express his thanks to the President for his interest, and to voice the hope that the President shares his view that the relations between the two countries could be a model of relations between large and small countries as well as between those with differing social systems.

The President responded by saying that this is what the United States has in mind with countries like Romania and Yugoslavia—that this kind of cooperation can be the basis for cooperation between countries with different systems, especially having in mind that this is a cooperation without strings, with no intention to influence the internal affairs of the other country.

The President then asked Ceausescu for his view of an important development that had occurred since their meeting, namely the Soviet-West German treaty.⁶

Ceausescu commented that the treaty needs to be looked at in terms of oneʼs assessment of the European security situation. Romania considers that conclusion of the treaty was a positive step in the sense of normalizing relations between the USSR and the German Federal Republic, especially since it was in keeping with the idea of solving problems through discussions. Although West German-Soviet relations represent the major problem in Europe, this treaty by itself does not solve everything. It must be followed by improving relations with Poland, Czechoslovakia and the German Democratic Republic and with other socialist countries on the part of the Federal Republic. At the same time, so that this tendency does not go too far in the other direction, Romania must insist on the participation of all concerned countries in assuring security in Europe. Thus, Romania believes that a European conference, in which the United States and Canada would take part, would give a new orientation to the situation in Europe. Romania would like the United States to be favorably disposed toward the realization of such a conference in Europe.

The President replied by stating that the United States had not indicated opposition to the idea of a conference as such. It did believe, however, that a conference should have a well considered agenda so that some definite progress could emerge. The matter is one which is under consideration. The President then said there was one point he would like to emphasize. After his talk to the UN,⁷ some observers in the press had speculated that he was committed to develop with the USSR a condominium to the detriment of other countries. The President continued by saying that he wished to state American policy quite directly. He had had a long talk with Gromyko.⁸ There would be other discussions in the future. The purpose of these discussions with the Soviets would be to explore areas where the United States and the Soviet Union could reduce the level of world conflict and the burden of arms. Under no circumstances will the direction of any discussions be toward a result where the independence of any country, especially any country in Eastern or Western Europe will be compromised. The future of each country in Europe must be determined by itself not by the USSR nor by the United States.

That is why we will continue, the President added, in the future to attempt to explore ways we can talk with the Peopleʼs Republic of China again because it is necessary to have avenues of communication with all nations in the world if we are going to have a world safe from the danger of a nuclear war.

Ceausescu remarked that the President had approached these problems in an open fashion. So far as a European security conference was concerned he would reply in the same frank spirit. Discussions with other States concerned had led Romania to conclude that it was very necessary to adopt an agreement renouncing the use of force. Similarly an engagement to develop freely economic, technical, scientific and cultural relations was also very urgent, as was the creation of a permanent organ of the conference, permitting thereby the establishment of a permanent base for the solution of European problems. Therefore Romania desires that the United States have not only a favorable attitude but that it actively contribute to the convocation of a conference as urgently as possible.

With reference to the Presidentʼs mention of comments about his speech to the UN, Ceausescu said he had had several exchanges of opinion with representatives of a certain number of States, especially in Europe. He added that he felt he must tell the President frankly that a certain concern exists in this regard. He himself did not know of course to what extent this concern might be well founded. The fact was that the Presidentʼs speech was directed more at the USSR rather than at all countries. The second notable aspect about the speech was that it did not contain any reference to future American relations with the Peopleʼs Republic of China. Ceausescu paused to say that he was only mentioning some of the remarks he had heard in passing from his various interlocutors in recent days.

Certainly, he added, we in Europe understand the necessity that there exist good relations between the United States and the Soviet Union. He went on to say that he would like to inform the President that after their meeting of a year ago, Romanian relations with the USSR had improved. A treaty of friendship had been signed.⁹ In general, he could say that relations with the Soviets were much better than they were a year ago. The same goes for the other European socialist countries. In November, treaties will be signed with Bulgaria, Poland, and the German Democratic Republic.¹⁰ Certainly this does not mean that Romania is pursuing a policy contrary to the interests of its people or its interest in cooperating with all countries. This is a part of Romaniaʼs entire active policy. Ceausescu added that he would particularly like to mention Romaniaʼs relations with Yugoslavia which are especially good and which it is Romaniaʼs intention to develop still further. These ties are such as to assure broad possibilities of having an exit to the Mediterranean and other areas.

While hoping for agreements, say on arms limitation between the United States and the Soviet Union, Romania would not want such solutions to have a detrimental effect on other countries. Therefore it is the feeling of countries like Romania—the small and middle sized ones—that in seeking solutions of these problems these countries not be consigned to one side but in some form or other be given a chance to participate therein and to have a chance to make their contribution.

The President stated that he agreed completely with Ceausescuʼs sentiments. He added that one must recognize that relations between the United States and the USSR are necessary if it is to be possible to have solutions to other problems such as the Middle East and Europe. Without Soviet cooperation, it would be impossible.

The President assured Ceausescu, however, that under no circumstances would the United States cooperate with any country, including the USSR, at the expense of another country or American relations with that country. This would be contrary to American tradition. He could also assure Ceausescu that the American position was clear, namely that the United States wants good relations with all countries of Eastern Europe. It rejects the idea that two great powers should sit down at a summit meeting and determine the future of smaller countries. That is wrong and the United States will not proceed on such a course.

Ceausescu responded by saying that he could only welcome this declaration of the Presidentʼs. He went on to express his hope that the United States, speaking of Europe again, would encourage Greece and Turkey to arrive at still better and more comprehensive understandings in the Balkans, because in his opinion and that of the Yugoslavs, this would help establish stability in that part of the world.

The President recalled that President Tito had emphasized this same point and had spoken very warmly about Yugoslaviaʼs relations with Romania and his own friendly and cooperative relationship with President Ceausescu.

Ceausescu noted that shortly after his return to Europe he was scheduled to see President Tito, on November 3 to be exact. The President mentioned that he had invited Tito to visit the United States some time next year.¹¹

The discussion then moved to the question of relations with China. The President said that he wished to express appreciation for the fact that since his last meeting with Ceausescu the Romanian government had conveyed American views to the effect that the United States would like to start discussions with China. He added that the United States cannot begin by establishing diplomatic relations. That is a step for later on. Rather a beginning must be made by having some type of talks. Public talks in Warsaw, he realized, might be quite difficult for the Chinese because the Chinese and the Soviets have their differences and talks in Warsaw might come to the attention of the Soviets. The United States is ready to have discussions with representatives of the Chinese government in other channels, in other capitals for instance. What he was suggesting, the President explained, was simply that the United States is open to discussions in formal channels like Warsaw or in any other channels.

Ceausescu commented that the President had earlier said that two great powers should not make decisions for others. This was something very good. Yet a continuation of the current situation where the Chinese are left to one side in the discussion of major problems is not helpful in finding equitable solutions to these problems. Of course, the improvement of relations between the United States and China would have a favorable influence on international life. The first thing to bear in mind is the need for China to be present in the United Nations. This can take place before establishment of diplomatic relations between the United States and China.

The President responded by saying that, as Ceausescu knew, this was a problem which was very difficult for the United States because of our ties with the Chinese Nationalist government. The President stated his belief that there must be preliminary steps. One has to begin somewhere. A start cannot be made at the highest level of action. The United States is ready to have discussions on other subjects with the Peopleʼs Republic of China whenever they are ready.

Ceausescu remarked that Romania has especially cordial relations with China. Since his last meeting with the President, there have been several fairly high level delegations which have visited China and discussed many subjects including relations between China and the United States and Chinaʼs presence in the UN. It is important to note from these discussions the point that China desires to have improved relations with the United States and is ready at any moment to occupy its place in the UN, including this year. This morning, Ceausescu added, he had just received a message from Chou En-lai on behalf of the Chinese leadership, thanking him for the clear Romanian pronouncement at the UN in favor of Chinaʼs taking its place there. He believes that the United States should take the first steps in that direction, especially after the Cambodian events.¹² Such steps could open the way to increased contacts with the Chinese. Ceausescu then said he must tell the President frankly that the Chinese have some of the same feelings of concern, some of the same doubts as those he had mentioned earlier regarding problems being solved by only two large countries.

The President commented that the other side of the coin was that the Soviets do not look with much sympathy on American moves to normalize relations with China.

Ceausescu replied why should they not. Otherwise things would be impossible. The Romanians have told the Soviets more than once that there should be good relations between China and the U.S. A lack of understanding of this problem will not help solve it. Ceausescu said he did not believe that an improvement in U.S.-Chinese relations would be directed against the USSR or others. He noted that he had had lots of discussions with Chinese leaders and knew how they thought. He was convinced that they are not pursuing such a goal.

The President stated that American policy is one of wanting friendly relations with both the USSR and eventually with Communist China. We do not intend to play one against another. Our desire is to have independent relations with each, not directed against the other. The President added that this seems to be President Ceausescuʼs viewpoint as well. He then remarked that President Ceausescuʼs continued role as a peacemaker is very useful in regard to U.S.-Chinese relations. He can talk to both parties which is very helpful and in the end, in the Presidentʼs opinion, this will produce results.

Ceausescu commented that Romania had been active in persuading the Chinese to improve their relations with Yugoslavia and now, after 15 years, those relations were good. To speak frankly, Romania particularly appreciates the Chinese policy in terms of its stress on the independent development of every country. So far as the future is concerned, Romania will greet any step toward improvement of relations with China and he will inform the Chinese leadership about his discussions with the President. He inquired if the President had some still more concrete suggestions regarding a real improvement in relations with China, adding at the same time that he agreed that a beginning is needed.

The President replied that a start could be made with the relaxation of trade barriers, with the relaxation, too, of restrictions on exchanges of people, and on travel. Of course, short of full diplomatic relations, there could be an exchange of high personal representatives. All this was open for discussion.

Ceausescu said as the discussion ended that he would like to take up during dinner the subjects of Vietnam and the Middle East, and even that of Korea.

After the advisers had joined the principals, the President informed them that he and President Ceausescu had had a very good talk, particularly on bilateral relations in the economic sphere. They also talked about European security and other world problems, having actually started where they left off last year. They had noted that considerable progress had been made as a result of the talks in Bucharest and hoped that more progress could be made along these same lines.

Ceausescu stated he was in agreement with what the President had said and noted the constructive spirit in which bilateral questions had been discussed, hopefully with good results.

The President commented further that in the matter of bilateral problems there are some areas where it is possible to take further steps as a result of todayʼs talks. In this discussion it was noted that as a result of last yearʼs talks, Romania had moved to a position next to Yugoslavia in terms of favorable economic relations with the United States. There is a lot left to be done; however, much progress has been made in a year and there are good possibilities to make progress in the future.

Ceausescu said he fully shared the Presidentʼs views. He and his advisers had discussions with over 30 American firms in the last two weeks, which he hoped would lead to good results in terms of mutual cooperation. He expressed himself as being especially satisfied with his visit so far and most particularly with his discussions with the President.¹³

1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 703, Country Files—Europe, Romania, Vol. III Jul 1970–Dec 1971. Secret; Nodis. Drafted by Barnes on October 27. The meeting took place in the Oval Office. Ceausescu arrived in the United States on October 13. After he gave a speech at the United Nations, he toured California and visited Detroit, Niagara Falls, and Williamsburg, Virginia.
2. See Documents 183 and 184.
3. See Documents 186 and 188.
4. See Document 221.
5. Regarding Yugoslaviaʼs treatment as a developing country, see NSDM 86 in Foreign Relations, 1969–1976, volume IV, Foreign Assistance, International Development, Trade Policies, 1969–1972, Document 245.
6. Signed at Moscow August 12. For the text, see Documents on Germany, 1944–1985, pp. 1103–1105.
7. October 23. For text, see Public Papers: Nixon, 1970, pp. 926–932.
8. A memorandum of the October 22 conversation is in the National Archives, Nixon Presidential Materials, NSC Files, Box 713, Country Files—Europe, USSR, Vol. IX 1 Aug 70–31 Oct 70.
9. Signed July 9 in Bucharest.
10. For texts of the treaties with Bulgaria, November 19; Poland, November 12; and the German Democratic Republic, December 22, see 855 UNTS 221, 71 POD 253, and 71 EGD 24, respectively.
11. Tito visited Washington October 28–30, 1971. See Documents 232–234.
12. Reference is to the entry of U.S. forces into Cambodia in an effort to destroy North Vietnamese forces and logistics. The President made the announcement in an April 30 television address to the nation. For text, see Public Papers: Nixon, 1970, pp. 405–410.
13. At an October 27 meeting with Ceausescu, Kissinger, acting on instructions from the President, attempted to clarify points made about U.S. policy in Vietnam and with regard to China. A memorandum of conversation is in the National Archives, Nixon Presidential Materials, NSC Files, Box 703—Country Files, Europe, Romania, Vol. III Jul 1970–Dec 1971.