Foreign Relations of the United States, 1981–1988, Volume X, Eastern Europe

168. Memorandum From Secretary of State Shultz to President Reagan¹

Washington, December 29, 1987

SUBJECT

• Suspension of MFN for Romania

In their recent meeting with you, Senators Armstrong and Helms and Congressman Wolf urged that you take the initiative to suspend Romania’s Most Favored Nation (MFN) tariff status for a period of three to six months because of that country’s poor human rights record. In return, they offered to withdraw their MFN suspension amendments to the trade bill now in House/Senate conference.

The Romanian human rights picture is dismal, and I know you want to do something to show your concern for the situation there. But I cannot recommend the Armstrong/Helms/Wolf proposal. It would draw the Administration into a violation of our bilateral commercial agreement and would undermine our ability to continue to work for better human rights in Romania. Also, as a matter of principle, we should continue to oppose suspension of MFN for any reasons other than those of law as set forth in the Jackson-Vanik amendment.

There are other strong reasons why we should hold the line against their proposal:

— Emigration from Romania is taking place at a high rate to the U.S., Israel and the FRG. The likelihood (an assessment shared by the American Jewish community) is that it would be cut off if MFN is suspended. The blame would fall on you.

— With the leverage afforded by annual review of MFN, we have been using government-to-government channels to get some real human rights accomplishments:

— family reunification;

— printing of Protestant Bibles for the first time since the 1920’s;

— preservation of certain Churches and historic Synagogues; issuance of building approvals for some new Churches;

— release from prison of political prisoners and religious activists.

— If you are personally associated with the initiative to suspend Romanian MFN, these channels most likely would close, at least for a time. The Congress would doubtless avoid responsibility for this outcome.

— By violating our bilateral trade agreement, we jeopardize U.S. commercial interests in such areas as intellectual property, joint ventures and repatriation of profits.

— American importers, e.g. K-Mart, indicate they will have to live up to contracts and eat the difference between costs before and after MFN suspension. Some smaller American firms say they would go out of business. Again, they would look to you, not the Congress, as the source of their difficulty.

— Our oppostion to MFN suspension for political reasons also is well grounded in our trade policy; changing direction would have ramifications for our credibility in GATT and our efforts to get other nations to live up to the international rules of the game in trade.

Although we must reject the proposal involving suspension of MFN, there is something you could offer the concerned members of Congress. We are discussing with the Romanians the possibility of holding a roundtable meeting early next year in Bucharest to thrash out human rights issues. The U.S. side would be headed by Assistant Secretary for Human Rights and Humanitarian Affairs Richard Schifter. To be responsive to the concerns expressed by Armstrong, Helms and Wolf, you could express to them your personal endorsement of the roundtable meeting as a means of raising concerns and pressing for concrete improvements in Romanian practices and invite them and other interested Congressmen to take a similar interest in the endeavor. They could be invited to take part in the actual meeting or, at a minimum, consult in the preparation of issues and positions the U.S. would present. With your interest and with Congressional backing, the roundtable could be used to send a strong message to the Romanian Government.

1. Source: Reagan Library, Secretary George Shultz Papers, Official Memoranda (12/29/1987). Confidential. Drafted on November 24 by Schlamm and Seymour; cleared by Wenick, Simons, Donald McConville (EB/TDC), Mark Johnson (H), Nuel Pazdral (HA), Michael Pea (L/EUR), Gerald Rosen (L/EBC), Verville, and Ralph Johnson (EB/TDC). Seymour initialed for all clearing officials except for Wenick. A stamped notation indicates the memorandum was received on December 29 at 5:53 p.m. Under an undated action memorandum sent through Whitehead, Ridgway, Fox, Larson, and Schifter sent Shultz this memorandum to the President. In it the drafters indicated that Shultz had asked them to prepare a memorandum to the President following Reagan’s November 12 meeting with Armstrong, Helms, and Wolf. They recommended that Shultz initial the attached memorandum. (Ibid.)