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

198. Memorandum From Secretary of State Vance to President Carter ¹

Washington, April 7, 1978

SUBJECT

• Visit of Romanian President Ceausescu

I. OBJECTIVES

Our objectives will be:

—To reaffirm our support for Ceausescu’s efforts to ensure Romanian independence;

—To urge more positive Romanian action on humanitarian problems such as divided families, binational marriages and Jewish emigration; more broadly, to encourage increased Romanian respect for human rights;

—To encourage Romania to adopt more liberal domestic economic and political arrangements;

—To recognize that Ceausescu is playing an active, constructive and independent role in international affairs;

—To reassert the U.S. interest in fruitful relationships with the communist countries in the Soviet Union’s European borderlands.

Ceausescu will be seeking:

—Assurance concerning the firmness and consistency of U.S. world leadership;

—Reaffirmation of the importance the U.S. attaches to Romanian independence from the Soviet Union, a vigorous bilateral relationship with Romania, and an active Romanian role in world affairs; and

—Economic benefits from the U.S. to cement both the economic and political relationship.

II. SETTING

Our bilateral relationship with Romania is advantageous for both sides, but the approach of the post-Tito and post-Brezhnev period provides the real setting for Ceausescu’s visit. This time of uncertainty, with implications far beyond Europe, sets the agenda for Ceausescu’s visit to Washington as it does for his visit to Peking in mid-May.

Tito’s visit to Washington helped strengthen U.S.-Yugoslav relations for the post-Tito period. Like Tito, Ceausescu is an independent communist, a regional leader in the Balkans, a partner for the United States and China in Eastern Europe, and a sometimes helpful mediator in international transactions. At 60, Ceausescu has many good years ahead of him. His visit therefore presents an opportunity to reinforce an American role in Eastern Europe for the uncertain years ahead.

In so doing, we will be building on a solid base. After a decade of steady effort, our relations with Romania are good. Ceausescu is coming to Washington ready and willing to keep them that way and to move them further forward. He clearly aspires to as much of Tito’s mantle as can be made to fit. The degree of recognition he gets from us will be, for him, an important measure of his prospects. Because recent activities in our relations with Yugoslavia, Poland and Hungary may have led Ceausescu to question whether our attitude toward Romania has cooled, he will be hypersensitive to the warmth and protocol aspects of his reception here.

At the same time, Ceausescu is not easy to deal with for the United States. Nurtured in the dangerous politics of the interwar communist movement, he runs a unitary state and a tightly centralized economy with a degree of direct personal control unmatched on the continent. In this respect, his regime differs markedly from Tito’s. Relying heavily on police power, the Romanian regime severely limits civil and political liberties and discourages emigration. To obtain significant movement on humanitarian problems—such as family reunification—normally requires a combination of external pressure and economic inducement.

The country’s economic strategy continues to stress heavy industrial development at the expense of the consumer, and to achieve it through annual reinvestment of a third of Romania’s national income. The results, in material terms, have been impressive. Romania has one of the world’s highest growth rates and is an eager international trader. The standard of living remains one of Europe’s lowest, but it continues to rise, if slowly.

Nevertheless, there are signs that the limits of this “traditional communist” type of development are being reached. A batch of economic reform principles was announced in February, followed in March by numerous personnel changes at the top. The two main thrusts—more economic “self-management” and greater Party control—point in opposite directions. Ceausescu may begin to realize that the economic efficiency Romania needs to maintain acceptable growth rates and reasonable prospects of economic independence from the USSR will soon require decentralized management and greater flexibility. He may fear, however, that a loosening of central control over the economy might spill into the social and political arena. This he is clearly determined for now to avoid.

Ceausescu’s claim to pursue an independent policy is well founded. In 1968, he publicly condemned the Warsaw Pact invasion of Czechoslovakia, thereby acquiring perhaps his greatest measure of personal popularity at home. He chose to maintain diplomatic relations with Israel after the 1967 war when even Yugoslavia, following the Soviet lead and Arab pressure, broke them off. And even more vigorously than Tito, Ceausescu has pursued economic and political relations with most of the world’s countries.

In substance, Ceausescu’s brand of foreign policy is the same as Tito’s. Huddled across the Soviet Union’s land route to the Eastern Mediterranean and the Adriatic, Romania and Yugoslavia are each other’s most essential partners in foreign affairs. Both are intermittently gripped by alternating fears of Yalta and the Cold War, of U.S.-Soviet collusion and U.S.-Soviet collision.

Both countries therefore work for “participatory diplomacy” on a global scale, for negotiations involving all states, great and small, in peaceful settlement of disputes and especially in disarmament. They are currently embarked, almost in tandem, on exchanges of high-level visits with the U.S. and the PRC in recognition of the fact that the post-Watergate and post-Mao period is over and that the preparation for the post-Brezhnev period has begun in earnest. Their anxiety about the direction the USSR might take after Brezhnev accounts for the special efforts both have been making to shore up the bilateral and multilateral framework of their independence in the European context.

At the very least, Ceausescu will come to Washington seeking continuation of U.S. support for Romanian foreign policy independence, sovereignty, and territorial integrity, which has been consistent through three Administrations. He will also bring a heavily economic agenda, partly because Romania sees economic ties as a way of anchoring political ties.² However, his economic agenda also has a genuine importance of its own in U.S.-Romanian relations, especially given his drive to turn Romania into a more modern, competitive economy. Ceausescu sees the U.S. as an enormously promising Western trading partner, a rich source of modern technology, agricultural products, industrial raw materials, as well as advanced management techniques.

There is bound to be a gap between what Ceausescu wants and what we can give in the economic realm. He will be pressing for credits at near-concessionary rates; multi-year most-favored-nation tariff status (MFN); liberalization of U.S. export controls; and a stronger Administration push to U.S.-Romanian economic cooperation. We are constrained in what we can do in all these areas, and we are bound by law, as well as policy, to keep the mixed Romanian human rights record in mind.

A full and candid review of major global issues, in a way that shows Ceausescu that his country’s positions and interests are important to us, will go a long way to substitute for our inability to meet his economic desires. As much as any other aspect of the visit, our treatment of the global agenda will determine the health of the U.S.-Romanian relationship in the months and perhaps years to come. Ceausescu sees his relations with us in a global perspective. The quality of U.S. foreign policy leadership is a vital component in his own struggle, hard on the Soviet border, to maintain Romanian independence.

III. KEY ISSUES

1. Trade and Emigration

U.S. Objectives: To encourage improved Romanian emigration performance while expanding U.S.-Romanian trade.

Ceausescu’s Objectives: To obtain most-favored-nation tariff status on a long-term basis without annual Congressional hearings, and to obtain renewal of the three-year trade agreement.

Essential Factors: Romania obtained most-favored-nation tariff status (MFN) and access to U.S. Government credits in 1975 under the terms of the Jackson-Vanik Amendment, which links them to emigration performance and provides for annual Congressional hearings. Although emigration to the U.S. has steadily improved, reaching about 1,250 last year, Romania discourages emigration and has erected cumbersome bureaucratic procedures to deter emigrants. A decline since 1976 in emigration to Israel has aroused concern here.

Two-way trade totalled just under $500 million in 1977, slightly in our favor, and continues to grow. Both sides have generally endorsed a goal of $1 billion by 1980.³ Ceausescu will argue that to reach this goal, we need the stability provided by MFN on a long-term basis. He may also seek your commitment to renewal of the U.S.-Romanian Trade Agreement, which expires August 3. However, Congress wishes to hold hearings in May or June on both MFN extension and trade agreement renewal. For the latter, a formal Presidential determination is also required. There is no prospect in the immediate future of changing the Jackson-Vanik Amendment to grant Romania MFN on a long-term basis, although improved Romanian emigration performance might make this possible in the future.

Points to be Made: (President should raise)

—Assure Ceausescu that the Administration recognizes the importance of renewal of the trade agreement, which is vital to continued expansion of our economic relations.

—Urge continued improvement in emigration to the U.S. and express concern at the recent decline in emigration to Israel, noting that the Administration and Congress are interested in both. Our two governments must continue our dialogue on these questions.

—Explain that while we understand the advantages of longer-term MFN status, we have concluded that it would be unwise to propose legislative action to modify the Trade Act this year. However, it may be possible in the future to work out a solution to accord MFN status for a longer period.⁴

—Tell Ceausescu that prospects for long-term MFN would be greatly improved by better emigration performance, particularly to Israel.

2. Economic Relations

U.S. Objectives: To reassure Ceausescu that we are interested in continuing to expand economic relations with Romania despite our inability to move ahead as quickly as the Romanians desire in certain areas.⁵

Ceausescu’s Objectives: To obtain a Presidential commitment that U.S. export controls will be relaxed; that Romania may receive concessionary credits; and that the U.S. Government will take an active role in establishing cooperative industrial projects between American firms and Romanian enterprises.

Essential Factors: The U.S. has played an increasingly important role in Romania’s attempt to reduce Soviet economic leverage on Romanian actions. Since 1969 two-way trade has expanded by more than ten times from a meagre base of about $40 million to almost $500 million last year.⁶ Important stimulants to this expansion were the granting of MFN tariff status to Romanian exports on August 3, 1975 and Romania’s inclusion in the U.S. scheme of generalized tariff preferences (GSP) for developing countries, which has allowed duty-free entry of many Romanian goods since January 1, 1976.

a) Credits. Senior Romanian officials have recently indicated that creation of a special American “financial facility” for Romania will be one of Ceausescu’s major goals. They are seeking credits on easier terms than those offered by either the Export-Import Bank or Commodity Credit Corporation export credit programs, which have been used extensively by the Romanians. The Romanians argue that as a developing country—and one so recognized by both the World Bank and the United States—they are entitled to receive “soft” loans. We have pointed out that concessionary credits, such as PL–480 loans, are intended only for the very poorest LDC’s and not for middle-level countries like Romania with a per capita GNP of $1450 (World Bank estimate). Furthermore, under current U.S. legislation Romania is not eligible for PL–480 loans. (Although the communist-country restiction in the Foreign Assistance Act can be waived by Presidential action, such a waiver must be “vital to the security of the U.S.”)

Points to be Made (if Ceausescu raises):

—Express our interest in expanding trade with Romania, as demonstrated by the active export credit programs conducted by Exim Bank and the Commodity Credit Corporation; express hope that Minister of Machine Building Avram’s talks on April 11 with Exim Chairman Moore and Ceausescu’s own discussions with Secretary Bergland will lead to even more productive use of these programs.

—Although the United States has provided concessionary credits to the poorest developing countries, Romania cannot be considered eligible in light of its very impressive economic development.

—Recall that the provisions of U.S. law and the Administration’s policy require us to review general questions of human rights in considering specific credit applications.

b) Export Control. The Romanians complain that our export controls are a significant barrier to expanded trade, particularly in high-technology fields such as computers and electronics. They are impatient with the delays and stringent conditions on the export of equipment and technology desired for cooperation projects with American firms, and in particular for an existing joint venture with Control Data Corporation to manufacture computer peripherals.

Points to be Made (if Ceausescu raises):

—We are treating Romania as liberally as possible within the restraints required by our export control legislation and our security interests.

—Acting Secretary of Commerce Harman, with whom Ceausescu will meet Wednesday afternoon, will provide more information on the administration of our export controls.

c) Cooperation Projects. The Romanians have sought direct U.S. Government involvement in establishing cooperation projects with U.S. firms. Despite considerable facilitative assistance by the Department of Commerce in locating appropriate American partners, there have been few success stories. The reasons for this include: asymmetry of economic systems; insufficient information from the potential Romanian partner; Romanian toughness in business negotiations; and, most importantly, skepticism by U.S. firms that the likely benefits warrant the required investment of time, money and effort to put the deal together. In an effort to wrap up some cooperation projects which could be announced during the visit, the Romanian Minister of Machine Building (Ioan Avram)⁷ and a host of other officials have been visiting U.S. firms for the past week.

Points to be Made (if Ceausescu raises):

—As part of our policy to forge even closer economic ties with Romania, we wish to see U.S. firms engage in mutually beneficial cooperative projects with Romanian enterprises.

—Our government will continue to facilitate contacts with U.S. companies wherever possible, but in our system there are limits to what U.S. officials can do. It will be up to the Romanian side to convince its potential American partner that the proposed cooperation project is truly of mutual benefit.

3. Middle East

President Ceausescu will look forward to your assessment of the present situation, including the prospects for Israeli-Egyptian negotiations and for dealing with the Palestinian issue. He has recently been in touch with Dayan and others and will want to give you his views.

4. US-Soviet Relations and Detente

U.S. Objectives: To give an overview of the present state of US-Soviet relations, including SALT.

Ceausescu’s Objectives: He will be interested in your assessment of the present state of US-Soviet relations (including the prospects for SALT agreement) in the light of recent developments. He will be concerned about a period of chill in US-Soviet relations and the implications of this for Soviet policies in Eastern Europe.

Essential Factors: Bucharest’s independent policies—which Ceausescu has been careful to keep within well-defined limits—are an irritant which Moscow has learned to tolerate grudgingly, though not necessarily to accept as a permanent or desirable state of affairs.

Points to be Made:

—Give Ceausescu our assessment of progress toward a SALT agreement.⁸

—Review some of the points of disagreement between us and the Soviets, and express our particular concern at the Soviet and Cuban military presence in Ethiopia.⁹

—Make clear that in seeking good and stable relations with the Soviet Union, we will not do so at the expense of the national interests of any third country.

5. Global Human Rights

The Ceausescu visit affords you an opportunity to explain our global human rights policy, including U.S. policies in the UN and other international organizations.

Point to be Made:

—Discuss U.S. global human rights policy, explaining that it represents an essential aspect of U.S. values and diplomacy and is not designed to interfere in the internal affairs of other nations.

6. CSCE

U.S. Objectives: To maintain close US-Romanian cooperation on CSCE issues. In particular to encourage the Romanians to improve their performance on human rights matters.

Ceausescu’s Objectives: To cultivate U.S. support for specific Romanian objectives in the CSCE process, in particular in the military security and economic fields. Ceausescu is likely to raise the issue.

Essential Factors: The Romanians have traditionally sought to use CSCE to enhance all-European cooperation. Romania was disappointed at the inconclusive results from the Belgrade meeting.¹⁰ Ceausescu will be seeking U.S. support for highly visible means of demonstrating the continued vitality of the CSCE process. We have sought to work closely with the Romanians on CSCE issues, on the understanding that they give serious consideration to our human rights concerns. This cooperation has worked to our advantage both in CSCE and on bilateral issues.

Points to be Made:

—Note our belief that the Belgrade meeting at least provided a firm basis for continuation of the CSCE process. Express satisfaction with the close cooperation between the U.S. and Romanian sides.

—Ask Ceausescu how he believes the CSCE process should develop in the period leading to the Madrid meeting.¹¹ Note the importance of patient and persistent effort over the long term to ensure concrete results.

—Point out that human rights issues require further scrutiny by CSCE states. Express satisfaction that Ceausescu has been willing to discuss human rights matters frankly and urge further progress in Romanian human rights practices, including specific emigration cases, under Basket 3.

7. US-China Relations

U.S. Objectives: To obtain Ceausescu’s insights into recent developments in Chinese relations.

Essential Factors: Since the late 1960’s, China has been an important part of Ceausescu’s international balancing act. Ceausescu plans to visit Peking in mid-May, and Hua Kuo-feng, who has not left China since taking power, is expected to visit Bucharest later this year. The Chinese understand the delicate game Ceausescu must play with the USSR and are likely to moderate their attacks on the Soviets while Ceausescu is in Peking.

We will want to be forthcoming in giving our views on US–PRC relations but must assume that anything we say on China may reach both the Chinese and the Soviets.¹²

Points to be Made:

—Note Ceausescu’s valuable role in helping the U.S. reestablish a dialogue with Peking in 1970–1971 and that we will soon be visiting Peking again. Express the hope that he will convey these points to the leadership in Peking:

• You recognize the historic and strategic importance of our relations with China. The goal of this Administration is normalization within the framework of the Shanghai Communique. (S)

• You agree with Premier Hua’s observation at the recently-concluded National People’s Congress that the U.S. and China share quite a few points in common in world affairs. You believe it is important for us to have authoritative discussions with the Chinese at the highest levels in order to consult about these matters of mutual interest. (S)

• The current expanse of U.S.–PRC contacts in such fields as scientific and technological exchanges, trade, and tourism helps create a favorable environment for normalization. We hope to enhance these dimensions of our relationship with China in the months ahead. (S)

• You seek an improvement in relations with China because it is in our interest to do so. But, normalization is not directed against any Third Country. We simply believe that China plays a positive role in maintaining the global equilibrium, and we wish to consolidate our relations with China to enhance the prospects of peace in Asia and elsewhere. (S)

—What will be the agenda of Ceausescu’s discussions with the Chinese? (S)¹³

—Whom does he expect his interlocutors to be? (S)

—How does he view the future evolution of Chinese foreign policy? (S)

8. Korea (If asked)

U.S. Objectives: To emphasize our desire for a reduction of tensions on the Korean peninsula.

Ceausescu’s Objectives: To pass on the views of North Korean leaders and to obtain our views as to the prospects for a negotiated settlement of the Korean issue.

Essential Factors: A high-level North Korean official visited Bucharest last month, and there is a good possibility that Kim Il-song has asked Ceausescu to carry a message to Washington. If that is the case, Ceausescu may offer to carry a reply back to Kim Il-song whom he will probably visit in May in connection with his visit to the PRC.

Points to be Made:

—State our opposition to talks with North Korea in the absence of the South, as Kim Il-song has urged for some time.

—Explain our view that a serious direct dialogue between North and South Korea is necessary to bridge past hostilities and to move toward the eventual goal of reunification.

—Note that those countries like Romania which wish to encourage a reduction of tensions on the peninsula can contribute by developing contacts of their own with both Koreas. (Romania currently shuns all diplomatic and commercial contact with South Korea.)

9. North/South Economic Issues

U.S. Objectives: To assure President Ceausescu that the U.S. welcomes a continuation of a positive North/South dialogue and to urge a constructive Romanian role.

Ceausescu’s Objectives: To convince the U.S. of the need for establishment of the New International Economic Order espoused by the “Group of 77”; to persuade the U.S. to be more forthcoming on the G–77’s proposals which they believe would promote the development of the LDC’s like Romania; and to convince us that Romania is playing a moderating role in the G–77.

Essential Factors: Romania is the only Soviet Bloc country that is a member of the G–77.¹⁴ By strengthening Romania’s ties to the developing countries through active participation in the Group of 77, Ceausescu has sought to limit his country’s dependence on the Soviet Union and CEMA, and to balance its relationship with the West. Romania was an early proponent of the New International Economic Order. It has supported G–77 demands that the developed countries—East and West—make concessions to the developing countries. Romania, however, has not played a leadership role in the G–77 generally or in meetings on specific issues.

Points to be Made:

—Assure Ceausescu that the U.S. continues to be willing to discuss any issue of the N/S dialogue so long as negotiations on specific issues are confined to specialized forums relatively free of political debate.

—The U.S. looks forward to the ECE regional meeting of the UN Conference on Science and Technology for development in Bucharest this June and the World Conference on this subject in Vienna in 1979. We hope, however, that they will not result in the creation of new international bodies but will utilize existing UN institutions for any proposed program of action.

—Express U.S. views on the appropriate role of the UN General Assembly’s “Overview Committee.”

—(If raised by Ceausescu.) Explain the U.S. position on resumption of negotiations on a Common Fund.

10. UN Special Session on Disarmament (SSOD)

U.S. Objectives: To assure Romania that we regard the UN role in disarmament as important, and to note our belief that SSOD objectives should be reached by consensus agreement.

Ceausescu’s Objectives: To express his support for the UN as a disarmament forum. He will probably raise this issue and may ask if you plan to attend the SSOD.

Essential Factors: Representatives of the U.S. and Romania met in Washington in mid-March to discuss preparations for the SSOD scheduled for May 23–June 28, 1978. The Romanian delegation pressed for a larger role for non-nuclear states (e.g., Romania) in disarmament discussions and hoped that the SSOD would give the UN a more active role in disarmament. We agreed there could be improvements in multilateral disarmament mechanisms but argued that there must be a continuing and experienced disarmament negotiating body, and that disarmament agreements must be based on consensus. Substantively, the U.S. is actively engaged in reviewing policy issues for the SSOD.

Points to be Made:

—The recent US-Romanian talks on the SSOD were candid, and fruitful for the U.S. Despite some difference in the views of our two countries, it is very important to achieve consensus agreement on the final documents produced in the SSOD.

—(If asked): The U.S. has adopted a strong and positive approach to the Special Session. We hope the meeting will generate broad agreement on principles and priorities, and thus give an impetus to progress on disarmament issues of pressing concern. We are conducting an extensive review of a broad range of disarmament issues for the SSOD.

11. Africa

Particularly in view of your recent visits to Nigeria and Liberia, Ceausescu will want to hear your views of developments on the continent, especially on movement toward majority rule in Southern Africa and toward the peaceful settlement of the Ethiopia-Somalia dispute.

12. Hungarian Minority in Romania

Recently, 66 members of the Congress wrote you a letter expressing their concern about Romanian treatment of the Hungarian minority and requesting that you raise the issue with Ceausescu.¹⁵ We have received an indication that Ceausescu may raise it himself because of his fear of Hungarian irredentist aspirations and will seek to explain Romanian policy toward minorities.

Points to be Made: (If Ceausescu raises)

—Express your satisfaction that the issue has come up and appreciation for Ceausescu’s explanation.

—Note the concern felt in the United States on this subject, in the Administration, Congress and the Hungarian-American community. Point out our readiness to engage in a frank dialogue on this and any other human rights issues.

—Stress U.S. support for Romania’s independence and territorial integrity.

1. Source: Carter Library, National Security Affairs, Brzezinski Material, VIP Visit File, Box 12, Romania, President Ceausescu, 4/12–13/78: Cables and Memos, 4/11–22/78. Secret.
2. Brzezinski highlighted the previous two sentences in the margin.
3. Brzezinski highlighted the first two sentences of this paragraph and wrote in the margin “2X/3 yrs.”
4. Brzezinski highlighted each of the first three points in the margin.
5. Brzezinski underlined “expand economic relations” in this paragraph.
6. Brzezinski wrote “10X/10 yrs” in the margin.
7. Brzezinski underlined the Minister’s name.
8. Brzezinski underlined “SALT agreement.”
9. Brzezinski underlined “Soviet and Cuban military presence in Ethiopia.”
10. The Belgrade meeting of the CSCE was the initial follow-up meeting on the implementation of the 1975 Helsinki Accords. The meeting began on October 4, 1977, and adjourned on March 8, 1978.
11. The Madrid meeting of the CSCE was the second follow-up meeting on the implementation of the Helsinki Accords; it opened on November 11, 1980, and adjourned September 9, 1983.
12. Brzezinski highlighted this paragraph in the margin.
13. Brzezinski highlighted this paragraph in the margin.
14. Brzezinski underlined “only Soviet bloc country” and “the G–77” in this paragraph.
15. Brzezinski highlighted this sentence in the margin. See Document 196.