173. Telegram From the Department of State to the Embassy in Hungary1
237207. Madrid for Zimmerman, CSCE Del. Subject: Hungarian Ambassador’s Meeting With the Counselor.
1. (C)-entire text
2. Summary: Meeting with Counselor Ridgway following home leave consultations in Budapest, Hungarian Ambassador Esztergalyos confirmed Hungary’s intent to maintain and extend positive bilateral relations. Esztergalyos expressed concern about the President’s reference to Hungary’s human rights practices in his nomination acceptance speech,2 and exchanged views with the Counselor at some length on CSCE-Madrid topics. The Counselor praised careful management by both sides of the bilateral relationship and took note of Esztergalyos’ remarks about the President’s comment. The conversation touched also on economic and business topics. End summary.
3. Bilateral relations. Esztergalyos said his home leave consultations confirmed that in Hungary’s view, nothing has changed for the worse in bilateral relations and Hungary’s aims and goals remain as before. He had been gratified to see his colleagues in Budapest on the same wavelength as himself concerning the positive nature of the relationship. Ridgway responded that a well-managed, realistic approach by both sides had yielded positive results. Neither side has exaggerated [Page 513] expectations, and a careful, case-by-case approach to issues was and is useful. Regarding larger international issues, use of measured language to describe differences is helpful and is noted. Ridgway noted that she retains the same favorable impression of U.S.-Hungarian relations as during her visit to Budapest last June,3 and that she had been particularly favorably impressed by the quality and content of her talks with Janos Nagy and other Hungarian officials in Washington last May and in Budapest.
4. Ridgway continued that we should keep it this way regarding items on the bilateral agenda. Esztergalyos responded that the U.S. and Hungary have molded a good businesslike relationship in which candor is also important. Each side realizes that problems should not be left for time to heal since, instead, they can grow worse. Ridgway acknowledged that smaller problems, left unresolved, can grow into bigger ones. She noted favorably both governments’ conscientious handling of the chemical patents disputes, and recent resolution of the old question of Embassy personnel ceilings. She expressed hope that another old question of USG properties in Budapest would be taken care of, and said she thought we have now found a way constructively to discuss that issue. Esztergaylos replied he thinks a solution can be found.
4. The President’s statement. Esztergalyos said he had been surprised to see President Carter’s reference to human rights in Hungary during his nomination acceptance speech (“...ask the Hungarian-Americans.”). He volunteered that he had not called Budapest’s attention to the comment lest it precipitate a sharp reaction there. Likening the comment to “thunder from a blue sky,” Esztergalyos said it could raise questions in certain circles both in Hungary and the U.S. that Hungary has bowed to pressure from the United States in its human rights practices. Esztergalyos denied that this had been the case. He said he personally could accept the remark as an election-year comment, but hoped [Page 514] that the President does not truly believe that progress with Hungary has been made because of U.S. pressure. “I know the whole story back 10–15 years, and I know our people—that’s a most sensitive point.” Pressure leads to a negative reaction. Esztergalyos worried that the President’s remark would give encouragement to circles in Congress which oppose abolition of the requirement for annual review of Hungary’s most-favored-nation tariff status, and to certain Hungarian-American circles. Esztergalyos said the latter would pose problems “not for Hungary, but for the Department.” The Counselor took note of the Ambassador’s comments, recalling that an Hungarian Embassy officer had earlier raised the question in EUR/EE.
5. CSCE/Madrid. The Counselor asked about the Hungarian delegation’s position at Madrid. Ezstergalyos replied that:
(A) Hungary does not want to see Madrid become a “mudslinging forum” since this “would kill the whole process.” It would be better to have discussions without illusions.
(B) Disarmament will be a main issue in the political field. Hungary is willing to accept that Madrid should not be used as a disarmament forum, but hopes for a kind of post-Madrid mandate to discuss this key issue.
(C) Hungary also seeks how to resolve larger common European projects such as energy, water resources, communications, and transportation issues. Progress in such areas pays not only economic but political dividends in contributing to reduction of tensions and to greater understanding. Esztergalyos said the idea would not be to institutionalize such project discussions since institutions come to fend for themselves, but a start could be made at Madrid. He cited the Hamburg scientific forum as having shown an interest and willingness to start.
6. The Counselor said that the U.S. regarded the Hamburg experience as very important for Madrid. While the public may focus on the CSCE biennial reviews, day-by-day gradual progress is the real CSCE “process.” There had been a vigorous exchange of views at Hamburg. While there had been no agreement on implementation, there had been a candid discussion and a final document. The U.S. looks at Madrid in the same way. We have no desire to be confrontational, but we should be candid, thorough, and have a full review. We will focus on balance of all aspects of the Final Act.
7. Esztergalyos agreed that all three baskets are a unified whole. He emphasized that actual fulfillment of individual Helsinki commitments is a bilateral task between participants. He noted that it is helpful that the November conference convenes only after the FRG and US elections. Otherwise there would be pressure for electoral publicity-plays. The Counselor responded that the Final Act was signed for the U.S. by a Republican administration and has been implemented for several years by a Democratic one, and that U.S. views on CSCE transcend party lines.
[Page 515]8. Economic and business topics. Esztergalyos reported his consultations included an extensive discussion with Deputy Prime Minister for Economics Marjai on US-Hungarian business relations. Esztergalyos reported Hungary’s main economic task is to increase efficiency and productivity and that 1979 through early 1981 is the crucial period. He noted favorably that Hungary has gotten its debt-service ratio down to about 20 percent.
9. Ridgway noted that although as a matter of policy the U.S. does not seek to achieve bilateral trade balances, congressional and other inquiries do arise. She hoped that in future years the mix of bilateral agricultural versus industrial trade will evolve to a more stable situation. Esztergalyos responded that Hungary has a major interest in entering into long-term relationships with U.S. firms, including some Hungarian investments in the US, and in altering the basic structure of bilateral trade. He noted that last year for the first time Hungarian industrial exports exceeded agricultural ones, and said Hungary wants to import more industrial goods than agricultural and raw materials.
10. Particular business issues.
(A) Chemical patents dispute. Esztergalyos said he had heard that a Hungarian court ruling had recently gone against the Chinoin Chemical enterprise. He said this proves what the Hungarian Government has consistently maintained: that Hungarian courts and procedures are objective and do not automatically favor the Hungarian party. Esztergalyos said it is logical that as commercial relations expand, particular problems will arise but it is important that—as was done regarding the chemical patents disputes—both governments work to promote solutions between the disputing firms and enterprises and not permit things to become politicized.
(B) Rockwell/Raba. Esztergalyos said it appears clear that in its MFN testimony last July Rockwell was trying to inject politics into a purely competitive question. It resents seeing Raba get a foothold in the United States with products as good as its own. Esztergalyos labeled as significant Rockwell’s inability or unwillingness to answer Senator Ribicoff’s question on how much business from it Raba’s new role is taking away. He said Rockwell has been invited several times to Hungary to discuss business prospects, including with Raba, but that sometimes companies seek to “win by political ways.” He said it was good to see that Congress and STR, on the contrary, look at things objectively.
(C) Occidental. Esztergalyos reported that Occidental’s Armand Hammer may come to Hungary in the fall to review a number of prospective projects with Deputy Prime Minister Marjai and others.
11. Comment. Discussion was cordial and ran for 1¼ hours. There were no particular surprises except that Esztergalyos raised the President’s comment, which he did in low key and ostensibly on his [Page 516] own and without instructions. Embassy will have received a memcon of discussion in EUR/EE on that topic on August 21.4 End comment.
- Source: National Archives, RG 59, Central Foreign Policy File, D800424–0288. Confidential; Priority. Sent for information to Madrid. Drafted by Longo; cleared by Bridges and Barry; approved by Ridgway.↩
- Referring to human rights in his August 14 speech accepting the nomination of the Democratic Party, Carter said, “ask the former political prisoners who now live in freedom if we should abandon our stand on human rights. Ask the dissidents in the Soviet Union about our commitment to human rights. Ask the Hungarian Americans, ask the Polish Americans, listen to Pope John Paul II.” He continued: “As long as I am President, we will hold high the banner of human rights, and you can depend on it.” (Public Papers: Carter, 1980–1981, Book II, p. 1536)↩
- Ridgway traveled to Budapest June 15–17. In telegram 3374 from Budapest, June 19, the Embassy reported Ridgway’s conversation with Ministry of Foreign Affairs State Secretary Nagy on June 16. Nagy, the Embassy reported, “stated that the long term continuation of tension between the U.S. and USSR will cause Hungary problems. If Hungary is forced to withdraw into ‘its own world again,’ it will not be helpful to either Hungary or the U.S.” (National Archives, RG 59, Central Foreign Policy File, D800301–1122) In telegram 3350 from Budapest, June 19, the Embassy reported Ridgway’s meeting with Puja. The discussion with the Foreign Minister, the Embassy reported, focused on the Iranian hostage crisis, NATO-Warsaw Pact relations, and Afghanistan. (National Archives, RG 59, Central Foreign Policy File, D800301–1026)↩
- Not found. In his August 14 speech accepting the Democratic Party’s presidential nomination, Carter accused the Republicans of wanting to move away from his policy of emphasizing human rights: “Ask the former political prisoners who now live in freedom if we should abandon our stand on human rights. Ask the dissidents in the Soviet Union about our commitment to human rights. Ask the Hungarian Americans, ask the Polish Americans, listen to Pope John Paul II. Ask those who are suffering for the sake of justice and liberty around the world. Ask the millions who’ve fled tyranny if America should stop speaking out for human principles. Ask the American people. I tell you that as long as I am President, we will hold high the banner of human rights, and you can depend on it.” (Public Papers: Carter, 1980–1981, Book II, p. 1536)↩