4. Memorandum From the Executive Secretary of the Department of State (Eliot) to the President’s Assistant for National Security Affairs (Kissinger), Washington, March 14, 1973.1 2
DEPARTMENT OF STATE
WASHINGTON, D.C. 20520
March 14, 1973
- MEMORANDUM FOR MR. HENRY A. KISSINGER
- THE WHITE HOUSE
- NSSM 163/CIEPSM 24: Economic Policies for the Eastern European Countries
Transmitted herewith in response to your request of March 7 to Under Secretary Casey following the Senior Review Group meeting on NSSM 163/CIEPSM 24, is a brief outline on a country-by-country basis of actions we propose to take in the coming year with regard to the eight countries covered by that study. The outline is based on the assumption that movement toward economic normalization with these countries is desirable for trade promotion reasons but that it also affords us an opportunity to press for a better atmosphere of overall relations as well as for the completion of unfinished bilateral business in the financial, cultural, and consular areas.
The actions proposed in the outline are based on the understanding reached at the meeting that the principal negotiating problems ahead of us this year concern countries with which we have diplomatic relations but with which we have not yet normalized economic relations to the extent of extending most-favored-nation treatment (Romania, Hungary, Czechoslovakia, and Bulgaria). They are also based on the judgement that we should not enter into negotiation of issues which would be included in commercial agreements involving the extension of most-favored-nation treatment until Congressional consideration of the trade bill is far enough along so that it is evident that the bill will pass this session. It therefore accepts as a working hypothesis the likelihood that [Page 2] we will not be able to start our first negotiation of a commercial agreement until fall.
The outline also reflects the agreement reached at the meeting that negotiation of commercial agreements should be done in sequence starting with Romania and following next with Hungary, Czechoslovakia and Bulgaria. The precise timing would, of course, also depend on the progress registered on outstanding problems and in the atmosphere of relations.
As will be seen from the attached outline, the initiation of negotiation on cultural and scientific exchanges is the next step we plan to take with Hungary, Czechoslovakia and Bulgaria. Pursuit of such negotiations with Czechoslovakia and Bulgaria has been postponed over the last few months pending a review of NSSM 163/CIEPSM 24 but we now feel, in light of the March 7 meeting, that there is general agreement we should pursue such negotiations, and indicate to these governments that a rapid and successful conclusion will pave the way for negotiations looking towards economic normalization. Inasmuch as we have already satisfactorily concluded a cultural and scientific exchanges agreement with Romania, we plan to proceed next with Hungary, with which we have already exchanged drafts, and then propose drafts to Czechoslovakia and Bulgaria as the current consular convention negotiations with these two countries enter their final phase. We expect that, while we should be able to initial exchanges agreements with these countries, they may insist on delaying signature until MFN is assured.
With all four countries, we plan to continue to intensify our recommendations that they promptly initiate or conclude negotiations with the Foreign Bondholders Protective Council looking toward the settlement of defaulted pre-war bonds. With Czechoslovakia, we plan to initiate negotiations of US claims against Czechoslovakia for nationalized property and the return of Czechoslovak gold. This proposal will be forwarded for NSC review in the near future.
We plan to cite our improving relations with Poland [Page 3] and Hungary as appropriate in our discussions with representatives of these two countries of maters within the purview of ICCS in Vietnam. Assistant Secretary Green called in the Ambassadors of Poland and Hungary last week to urge their governments to press the DRV and the PRG to cease violations of the VN agreement. He stated that their efforts as ICCS members would have a bearing on the improvement of our bilateral relations with those two countries.
Inasmuch as the March 7 Senior Review Group meeting agreed that negotiation of substance with the GDR and Albania was still somewhat removed and that there are no major outstanding issues for phased negotiation with Poland and Yugoslavia, these four countries are dealt with in the attachment in a somewhat different manner than Romania, Hungary, Czechoslovakia and Bulgaria. Instead of a linked sequence of issues for negotiation, a simple listing of the principal issues which remain to be resolved is presented but with no indication of time phase or linkage.
- Source: National Archives, Nixon Presidential Materials, NSC Files, NSC Institutional Files (H-Files), Box H-194, NSSMs 162-165. Confidential. Ambassador Harry Barnes signed for Eliot above Eliot’s typed signature. For the minutes of the Senior Review Group meeting, see Document 3.↩
- In this 3 page memorandum, Eliot outlined the recommendations put forth in the attached 5 page “Proposed Actions and Negotiations in US Relations with the Countries of Eastern Europe during 1973 and 1974,” which provides a country-by-country strategy toward the normalization of economic relations with East European nations.↩