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

176. Memorandum From the President’s Assistant for National Security Affairs (Powell) to President Reagan¹

Washington, undated

SUBJECT

• Romanian Renunciation of MFN Status

You will recall that last month you signed a letter to President Ceausescu putting him on notice that it would be very difficult to recommend renewal of MFN for Romania unless there was considerable improvement of the human rights situation (Tab A).²

When Deputy Secretary of State John Whitehead delivered this letter, Ceausescu reacted negatively³ and described the letter as interference in Romanian affairs. Before leaving Romania, Whitehead was told that Ceausescu would send a return letter stating that Romania no longer wanted MFN⁴ status if it was tied to any conditions, including Jackson-Vanik. This letter was delivered to Deputy Secretary Whitehead last week and the State Department translation is at Tab B.⁵ (The next-to-last paragraph is the important one.)

We have accepted this Romanian decision to renounce MFN and will thus not have to submit a recommendation to Congress this spring⁶ on MFN extension. We are arranging to begin talks with the Romanians on implementation of this decision, since there are some complex legal and technical questions involved: for example, whether MFN will be terminated or merely suspended, whether there will be a grandfather clause for contracts already signed, and whether we should retain portions of the broader trade agreement which provide for such things as business facilitation offices. Our inclination is to suspend MFN but keep as much of our bilateral relationship as possible in place for the post-Ceausescu era. We expect Romanian MFN to expire on July 3.⁷

Pending the above talks with the Romanians, however, we believe it important to go public quickly with the Romanian decision so that Congress and businessmen are aware that Romanian MFN will end. A press statement has been prepared (Tab C)⁸ which the State Department plans to issue on noon Friday, February 26. We are also working on a plan to give advance, courtesy notification of the announcement on Friday morning to certain Congressmen and other individuals who have taken special interest in the issue. This will include Congressman Wolf and Senators Helms and Armstrong. Our general line will be that, following our strong demarches on human rights and warnings regarding MFN, Ceausescu saw the handwriting on the wall and decided to renounce MFN of his own accord.

We believe that Ceausescu’s decision works out to our advantage. In the short term, our relationship with Romania will deteriorate and we will have even less leverage on human rights issues than before. However, we no longer face the political problem of a recommendation on Romanian MFN to Congress—a recommendation which would have alienated certain constituencies no matter which way we went, because there are business and Jewish groups which favor MFN continuation.

In the long term, the net result of this episode is a distancing of ourselves from the Ceausescu regime, which is the political step that Congressman Wolf and others wanted us to take. Even though Ceausescu acted first, observers will understand that his decision stemmed from our human rights pressure and warnings about loss of MFN. Moreover, we may be able to negotiate termination of MFN under the most favorable conditions for eventually restoring it. We will have no legislative conditions which could make MFN restoration difficult, even in a post-Ceausescu era. In short, Ceausescu’s decision solves a lot of problems for us and will still send the kind of human rights message to Romanians and others which we wanted to convey.

1. Source: Reagan Library, Rudolf Perina Files, Subject File, Romania—MFN (1). Secret. Sent for information. Powell did not initial the memorandum.
2. Beginning with the word “putting” the remainder of this sentence was underlined by an unknown hand. Tab A is attached but not printed. See Document 171.
3. An unknown hand underlined “reacted negatively.”
4. An unknown hand underlined “no longer wanted MFN.”
5. Printed as Document 175.
6. An unknown hand underlined “to renounce MFN and will thus not have to submit a recommendation to Congress this spring.”
7. An unknown hand underlined “on July 3.”
8. Attached but not printed. The Deputy Spokesman read the statement to the press on February 26. (Department of State Bulletin, May 1988 p. 43)