Foreign Relations of the United States, 1977–1980, Volume XX, Eastern Europe

169. Memorandum From Timothy Deal of the National Security Council Staff to the President’s Assistant for National Security Affairs (Brzezinski)¹

Washington, March 19, 1980

SUBJECT

• SCC on March 20: Hungarian Grain

The SCC asked for an assessment of reports that Hungary is selling grain to the USSR and might replace it with US grain. We have confirmed that the Soviets have asked Hungary for 800,000 tons of wheat. The Hungarians told us they will meet this request from domestic supplies. (C)

After the Soviet invasion of Afghanistan, we informed East Europe Governments that diversion of US grain or controlled technology to the USSR would adversely affect bilateral relations and jeopardize additional purchases from the US. In the case of Hungary, we also said we would take into account any significant change in the pattern of Hungarian grain imports from the US and Hungarian exports to the USSR which might indicate surrogate purchases for the USSR. (C)

State has prepared an options paper (attached)² for SCC consideration. The Implementation Group reviewed it at today’s meeting. The paper sets forth three options: (1) continue present policy; (2) request East European countries not to sell grain to the USSR from domestic supplies above traditional export levels and avoid diversion of US grain; (3) seek commitments from NATO allies and other Western grain exporters on the establishment of quantitative limits on grain exports to each Eastern European country. (C)

After extended debate, agencies recommended that the SCC approve Option 1, as amended in the discussion. State will present this position in the meeting. Under option 1, we would: (a) continue to urge Eastern European countries to avoid diversion of US grain to the USSR or use grain to replace exports to the USSR; (b) not object to sales of grain to the USSR from domestic supplies; (c) monitor carefully Hungarian and Eastern European grain trade with the US and other cooperating countries; and (d) urge West European governments not to make extraordinary shipments of grain to Hungary and other East European countries. (C)

I recommend you support Option one for the following reasons:

—We have no evidence that Hungary or other Eastern European countries are diverting grain to the USSR although there are still numerous possibilities for swaps or transshipments.

—It would be exceptionally difficult to define “traditional” or “normal” Hungarian or East European trade with the USSR. For example, in the past five years, Hungarian grain exports to the USSR have ranged from 137 to 854 thousand tons.

—Option 2 would require a greater degree of cooperation from Hungary than we would expect from our allies and third world countries.

—Western grain exporters will not agree to quantitative limits on exports to East Europe as proposed in Option 3.

—We have a strong a political stake in treating East Europe differently from the USSR so long as these countries limit their involvement in Afghanistan or in other future Soviet ventures. (C)

Whatever option the SCC chooses, State should reemphasize to the Hungarian government that we consider this a critical issue and that efforts by Hungary or other East European countries to circumvent our controls will have a serious, long-term impact on overall relations.³ (C)

1. Source: Carter Library, National Security Council, Institutional Files, Box 111, SCC 291, 3/20/80 Iran/Afghanistan. Confidential. A stamped notation at the top of the page indicates that Brzezinski saw the memorandum.
2. The undated paper, entitled “East European Grain Sales to the Soviet Union,” is attached but not printed.
3. On March 21, Brzezinski informed the Secretaries of State, Defense, Agriculture, the Treasury, Commerce, and the Director of Central Intelligence that the President had “approved the recommendation of the SCC as follows: We should deal with the Hungarian case on its own merits, without attempting to expand it into a universal set of guidelines. We should inform the Hungarians that we consider sales of 800,000 tons to the USSR this year to be excessive by about 200,000 tons and inform them that sales in that amount—as well as diversion of high technology items—would be seen by the U.S. as unfavorable and would be taken into account in our future sales of grain and other items to Hungary.” (Carter Library, National Security Council, Institutional Files, Box 111, SCC 291, 3/20/80 Iran/Afghanistan)