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

34. Action Memorandum From the Assistant Secretary of State for European and Canadian Affairs (Burt) to Secretary of State Shultz¹

Washington, December 5, 1984

SUBJECT

• Eastern Europe: Next Steps

ISSUE FOR DECISION

Whether to approve possible next steps to advance our objectives in Eastern Europe. As you requested at the conclusion of the November 15 meeting on Eastern Europe,² we have set out areas of agreement and disagreement.

ESSENTIAL FACTORS

From the Soviet perspective, Eastern Europe has gone from a disciplined, Moscow-led “socialist” camp to a more disparate alliance consisting of states that assert varying degrees of national autonomy. Moscow’s assets include military preponderance, economic leverage and guarantor status for some of the EE ruling elites. On the negative side, Moscow faces a prolonged leadership crisis, and serious structural economic difficulties, in addition to a nationalistic Eastern Europe with serious economic problems of its own.

Soviet-EE differences have been exacerbated in recent years, partly as a result of EE efforts to maintain and expand contacts with the West. The commencement of NATO INF deployments³ was a defeat for the Soviets that had particular resonance in Eastern Europe. EE leaders and publics expressed dissatisfaction and unease over Soviet counter deployments in Czechoslovakia and East Germany. To varying degrees, the EEs resisted Soviet efforts to reduce political and economic contacts with the West, resulting in the emergence of new alignments in Warsaw Pact and CEMA circles which, at times, grouped East Germany, Hungary and, on occasion, Bulgaria and Romania. If the Soviets were successful in forcing postponement of the Honecker and Zhivkov visits to the FRG, the EEs regard it as but a temporary setback. If only because their economies are heavily dependent on trade, the EEs will press even more strongly to advance, wherever feasible, their national interests.

S/P—and to some extent, HA—are skeptical that recent developments in Eastern Europe have created an “historic opportunity” for U.S. policy. They believe that our margin for achieving real strategic gains from a more forthcoming policy toward Eastern European hard-line states is less than EUR estimates. They believe that EUR exaggerates the latitude that most EEs have, within the constraints of Soviet power, to define their own domestic and foreign policies. There is no difference in our evaluation of EE desire to carve out greater independence from Moscow; this had always been the EE desire. Where we differ is in EE ability to achieve that goal. S/P interprets recent developments in the region (the Honecker/Zhivkov visit cancellations, the postponement of Genscher’s visit to Poland) as confirmation of Moscow’s desire and ability to crack down and arrest EE efforts to assert greater automomy. It also believes that underlying economic trends in the area point to increasing Soviet leverage—irrespective of feasible Western initiatives. In short, S/P sees the present period as one of the intermittent Soviet crackdowns on Eastern Europe, which could even be exacerbated by overly activist U.S. diplomacy with the more recalcitrant EE states. There is no consensus on the fundamental nature of the trends in the region.

Broad Policy Perspectives. There is consensus, however, that there are some interesting developments in the region offering potential policy opportunities, and that we should take advantage of these when it clearly serves our interests. All recognized that our approach should be guided by NSDD–54, which provides that:

— our fundamental goal is to loosen the Soviet Union’s grip on Eastern Europe;

— in pursuing this goal, we differentiate the EE countries from the Soviet Union, and we differentiate among the EEs according to the degree to which they demonstrate foreign policy independence or greater internal liberalization, including human rights performance, and market-oriented economic decentralization and reform.

— U.S. concessions should be in exchange for concrete actions by EE regimes—rewards must be earned.

— As provided by NSSD–54, in implementing our differentiation policy, “the baseline for comparison, will be our policy toward the Soviet Union.” (S/P disagrees with NSSD–54 in this respect, noting the special character of U.S./Soviet relations and that NSDD–54 contains specific provisions on high-level visits. If U.S./Soviet relations were to be the baseline for hard-line EEs, we would be receiving their Foreign Ministers at the White House, as we did recently with Gromyko.)

All agree that we should be particularly mindful of human rights performance and of EE behavior contrary to U.S. interests in the Third World. There is agreement on the usefulness of penetrating EE societies with VOA/RFE radio broadcasting and USIA in-country programs to erode Soviet-imposed barriers between EE and the West.

EUR also believes that as we do more with Eastern Europe, we should say less publicly about differentiation and speak instead of “Europeanization.” S/P disagrees, believing that continued emphasis on the President’s differentiation policy is essential in sending signals concerning rewards for more liberal and autonomous polices.

EUR believes that trends in the region favor a somewhat more active, responsive, yet differentiated approach. S/P believes that this is true in some cases but not in others, and that the very essence of differentiation is to be forthcoming only in the former cases rather than across-the-board, lest we blur differentiation among EE countries. Since we cannot raise the ceiling for Hungary and Romania much higher, the floor should not be raised indiscriminately for the less cooperative EEs. HA agrees and believes that an across-the-board approach would undercut the Administration’s human right policy, particularly regarding Romania, and downplay EE activities in the Third World that are harmful to our interests.

Possible Specific Steps. Several possible specific steps over the next year and their pros and cons are discussed below:

1) A Secretarial Visit to Eastern Europe.

2) Differentiated political discussions.

3) Multi-year MFN for Hungary and Romania.

1) Secretarial Visit to Eastern Europe.

A Secretarial visit is one of the most effective ways to demonstrate U.S. interest in Eastern Europe and advance our policy objectives in the region. The choice of countries to visit would reaffirm our differentiation policy. The choice of countries not visited would signal our unwillingness to reward regimes unwilling or unable to differentiate their policies from those of the Soviet Union and/or those which pursue particularly repressive policies.

Your visit would also serve another important objective of differentiation: that we don’t accept the Soviet view that Eastern Europe is their exclusive sphere of influence. As long as our public statements do not restrict the EE countries’ room for maneuver, your visit can strengthen historic trends in the region toward greater nationalism and independent behavior, and demonstrate that we remain committed to the Helsinki process.

Although HA and S/P are particularly concerned that a visit to Romania not fail to underscore our deep human rights concerns, there is agreement in recommending that you schedule an early visit to Hungary, Romania and Yugoslavia:

— Hungary. The Hungarians are anxious to have you return Foreign Minister Varkonyi’s visit to Washington last year. Our bilateral relations are good and devoid of serious problems. Your visit would underscore our support for Hungary’s market-oriented economic reforms and internal liberalization. Hungary provides an effective and convincing example to the communist world of the efficacy of decentralization, the application of market mechanisms, and experimentation with private enterprise. Your visit would also encourage Hungary’s generally helpful bridging role in East-West relations and moderating influence in Warsaw Pact and CEMA deliberations. Your visit could also bolster advocates of further reform and political liberalization within Hungary at a time when the Soviets are exerting greater economic demands and ideological pressures.

— Romania. You have accepted in principle Foreign Minister Andrei’s invitation to visit Bucharest. Over the last year, Romania has continued to demonstrate independence in ways important to us, most dramatically by defying the Soviet Olympics boycott and by Ceausescu’s visit to Bonn after the Soviet-forced cancellations by Honecker and Zhivkov. Despite its relatively independent foreign policy, Romania is distinguished for its repugnant domestic regime. This prompts S/P and HA to point out the importance of ensuring that a visit not lend itself to misinterpretation as an endorsement of Ceausescu’s despotic record. EUR shares this view. HA is particularly concerned that human rights not be relegated exclusively to private talks, for this will aid the regime by conveying an impression that human rights is being ignored. We agree, but believe the problem is manageable.

Your visit would also underline our interest in improving the human rights and economic well being of the Romanian people. Our repeated expressions of human rights concerns have produced some notable results: higher emigration (more than all the rest from EE combined), reduced harassment of prospective emigrants and the release of some prominent human rights cases such as Father Calciu. (HA believes that Romanian concessions on emigration are simply designed to retain MFN, and are not a reaction to our “expressions of human rights concerns”.) While the human rights situation is extremely serious, to some extent the perception is worse than reality. For example, the Vatican is pleased with progress made in Church-State relations, a variety of new churches (including Baptist) have been built, and the Jewish community has been generally well treated.

At the same time, years of economic mismanagement, repression, and an unbridled personality cult have made Ceausescu and his politically active family universally unpopular. You would see Ceausescu, but care would be taken in your statements to emphasize support for Romanian independence and the well being of the Romanian people in order not to enhance Ceausescu’s personal status or to identify the U.S. unduly with his regime. Vice President Bush has visited Romania,⁴ as have Presidents Ford and Nixon.⁵ So a visit at your level would not in any way change our approach. On the other hand, failure to visit Romania while you visited Hungary would bring about a major crisis in relations with Romania and convey a confused signal about differentiation, i.e., that we have abandoned one of our criteria—foreign policy independence—and care only about internal reform and human rights.

— Yugoslavia. Neutral and non-aligned, Yugoslavia could be part of your East European itinerary even though it is not, strictly speaking, a target of our differentiation policy. Because Yugoslavia stresses its independence from the Soviet Union and the Warsaw Pact EEs, your visit should be structured to emphasize the distinction. You might also consider visiting Yugoslavia separately as part of other travel to Europe. In either case, Belgrade will welcome your presence. As the country undergoes increasing political strains in the post-Tito period, your visit could provide needed reassurance of our continued support for Yugoslavia’s independence, territorial integrity and economic viability. We are currently engaged along with other Western creditor governments in an effort to work out with the IMF and commercial lenders an appropriate rescheduling of Yugoslav foreign debt. This process should be on the way to completion, if not completed, by the time of your visit. The visit also should be used to strengthen moderate advocates of needed economic reforms and greater democratization against conservatives who prefer tighter controls (including the recent crackdown on dissidents).

2) Differentiated Political Discussions.

There was general agreement at your November 15 meeting that some US-EE political consultations (e.g., the Goodby visit)⁶ can be effective in conveying our foreign policy agenda, including arms control and regional conflicts. They can also serve to express the concerns over EE behavior we find objectionable (e.g., human rights, terrorism, Third World activities).

Without abandoning our differentiated approach which accords the highest level of contacts (President, Vice President, Cabinet officers) to Romania and Hungary, EUR proposes that we engage in a somewhat more intensive, but still calibrated approach that would broaden the range of our political consultations to include, as circumstances warrant, the other EE countries. By a more “intensive” approach, we mean seeking opportunities to convey our message directly to senior EE government officials without the Soviet filter through which EUR believes that the EEs normally learn of major foreign policy developments.

EUR believes our consultations and representations over the past year on arms control, regional issues such as the Middle East and Central America, and U.S.-Soviet relations have forced the Soviets to deal with their Warsaw Pact allies with more circumspection. The EEs have increasingly functioned as something of a political lobby with the USSR on these issues within the Warsaw Pact and in other ways. EUR concedes that our ability to influence EE behavior is limited, yet convinced it is, nonetheless, worth the effort. We have also raised directly and forcefully with EE leaderships our concerns over their objectionable human rights behavior and involvement in terrorism, arms deliveries and Third World meddling, either on their own or as surrogates for the Soviets.

EUR does not believe we should reward the “problem EEs” with visits by you or the Deputy Secretary. Indeed, withholding visits at that level as well as the tangible economic benefits of differentiation make it abundantly clear that we are not abandoning differentiation or rewarding repressive and undeserving regimes. We have in mind visits by senior officials (such as Ambassador Goodby) to address specific multilateral concerns. If circumstances warrant, EUR thinks visits to the area by Under Secretary Armacost and Assistant Secretary level Department officials (EUR, HA, S/P, etc.) would advance specific objectives without signalling any unearned reward. As to the EE representatives coming to the United States, EUR would receive them from “problem” countries at the level of their Deputy Foreign Ministers (of whom each has four to five), a position that falls roughly between our Assistant Secretary and Under Secretary.

Arguments Against Political Consultations. S/P believes that high level political consultations at the Assistant Secretary level and above with the hardline EEs (GDR, Czechoslovakia, Poland and Bulgaria) would seriously undermine differentiation as defined in NSDD–54. In the past, such officials generally have not visited hardline EEs to avoid legitimizing those regimes. S/P fears that our differentiation policy would be debased and our leverage lost if we treat with the “problem” states in much the same manner as with Hungary and Romania. Furthermore it does not believe that broader U.S. policy interests are well-served by legitimizing countries such as the GDR with an increase in the level of dialogue with us at a time when it is deploying Soviet INF, mucking about in Nicaragua and other Third World crisis areas, actively cooperating with the Soviets to acquire embargoed Western technology, and supporting anti-U.S, terrorist groups in the Third World. The same applies to Czechoslovakia, which recently killed an escaping citizen in Austrian territory. S/P believes that high-level visits to Prague would be especially ill-advised. HA adds that if the Administration’s human rights policy is to be seen as credible and effective in Eastern Europe, the U.S. should not “reward” EEs with notorious human rights records. It believes that a “modest and cautious” program of contacts can be useful, but is concerned about the symbolic impact of high-level meetings. S/P shares HA’s concerns that we must be careful not to appear to be legitimizing repressive regimes that have done nothing to earn positive treatment under differentiation.

Dealing with the GDR: As U.S. relations with the GDR are driven in substantial part by the unique geopolitical situation of Germany as well as by considerations of differentiation, EUR does not believe that this paper is the right vehicle for a comprehensive and detailed discussion of our entire bilateral relationship with the GDR. We have dealt with the GDR in the context of our EE policy where appropriate in this paper. S/P, on the contrary, notes that NSDD–54 states: “In this NSDD Eastern Europe refers to Bulgaria, Czechoslovakia, the German Democratic Republic . . .” S/P expresses its surprise at the notion that East Germany is not a part of Eastern Europe, where we believe it to have been located from time immemorial, and at least since the linking at the Elbe in 1945, the formation of the Warsaw Pact, and construction of the Wall. In brief, deleting GDR from this analysis would undercut U.S. policy of the last 20 years and simply relieve the East Germans of the criteria of U.S. policy applied to all other Warsaw Pact members. In this connection, S/P understands that Ambassador Ridgway will be sending you a report on discussions with the GDR on concessionary trade benefits and Jewish claims.⁷ Following that, S/P believes that you should be presented with an action memorandum from the concerned bureaus.

3) Multi-year MFN for Hungary, Romania (and China).

Hungary, Romania (and China) are granted MFN through a Presidential waiver as required by the provisions of the Jackson/Vanik Amendment to the Trade Act of 1974. That waiver is linked to emigration practices and must be renewed annually. The Romanians and Hungarians (and Chinese) have made removal or modification of the annual waiver requirement a high priority. Even though the Supreme Court appears to have nullified the one-house legislative veto aspect of waiver certification in the 1983 Chahda decision, the Administration has not objected to (and indeed, encouraged) continued Jackson-Vanik Congressional review. We do not know the White House’s attitude toward changes in Jackson-Vanik. While a candidate in 1980, President Reagan pledged to Senator Jackson that he would not seek a modification of Jackson-Vanik while President. Although that pledge clearly was issued in the context of the Soviet Union, the White House may still be unwilling to consider multi-year MFN. There is some interest developing in Congress to re-examine Jackson-Vanik; last year hearings were only held in the Senate. Some key House leaders (Gibbons and Frenzel) openly support multi-year MFN and introduced such legislation in 1983; others are against any change that might reduce human rights leverage on Romania.

We agree that we should retain the leverage provided by the annual review process, but believe that this can be accomplished in a multi-year arrangement that would better meet needs of U.S. exporters as well as the Romanians and Hungarians (and Chinese). As the President begins his second term, the time is opportune to consider whether a multi-year approach (initially for two years) could satisfy our objectives and to explore whether there might be support in the Administration and the Congress. To assure that multi-year would continue to provide us needed human rights and emigration leverage, we favor:

— An explicit Presidential statement at the time a two-year multi-year MFN arrangement is accorded Hungary and Romania (and China) that the Administration reserves the right to withdraw MFN should the recipient grossly violate “Jackson-Vanik” commitments.

— An annual Presidential report to the Congress on emigration and human rights progress in each country and certification that continued MFN status is merited.

— Continued annual Congressional review.

EUR and EB believe that if multi-year MFN is to be implemented, it should be applied initially to all three countries (Hungary, Romania, and China). Should multi-year be arranged only for Hungary, this would seriously damage our relationship with Romania which would consider such a step politically discriminatory and hostile. It could even be seen in Bucharest as lending support to Hungarian irredentist claims in Transylvania. Should multi-year be considered in the context of continued annual human rights review and Presidential certification, we would not sacrifice the leverage we want to retain on Romanian human rights and emigration performance.

EUR and EB believe that we should sound out other agencies and the Hill to determine the level of support and opposition before making any final recommendation to you and the President.

Arguments against Multi-Year MFN.

HA opposes a move to multi-year MFN; S/P is concerned about its application to Romania. First, MFN is accorded to Hungary and the PRC almost automatically, and the annual review is not disruptive of relations. Second, Romania behaves best when under MFN pressure, as witness its imposition and then withdrawal of an education tax on emigrants. Granting multi-year MFN to Romania seriously erodes our human rights leverage. Third, an effort to open up the Jackson Amendment will be fought by many in Congress. This is a gratuitous fight. If we “win,” we gain little regarding the PRC or Hungary, lose leverage on Romania, and go through a bruising battle. If we lose, we have demonstrated our limited influence on the Hill.

S/P and EAP further believe that consideration of multi-year MFN for China is not relevant to this paper. Our relations with China have a strategic rationale totally different from our relations with Eastern Europe. Thus, multi-year MFN for China ought to be considered on its own merits. EUR and EB agree that in terms of abstract logic this should be the case, but in the real world Congress and the two EE countries have expectations that all three will be dealt with together.

RECOMMENDATIONS⁸

A. Secretarial Visit to Eastern Europe

That you agree in principle to visit Hungary, Romania and Yugoslavia as early as your 1985 schedule permits, and authorize us to explore timing of the trip. (All favor)⁹

B. Political Consultations

1. That we engage the hardline EEs somewhat more actively in calibrated political consultations at the Assistant Secretary and Under Secretary level (as well as with experts on multilateral issues) to advance bilateral agendas, convey our foreign policy views (including arms control and regional conflicts), and express our concerns over objectionable EE behavior. (EUR favors)¹⁰

2. Alternatively, that we restrict political consultations with countries undeserving of positive differentiation to below the Assistant Secretary level, except for meetings devoted to bilateral issues and specific multi-lateral concerns (e.g., Goodby). (S/P and HA favor)¹¹

C. Multi-year MFN

1. That you authorize us to sound-out with interested agencies and the Congress the feasibility of multi-year MFN for Hungary, Romania and China with explicit reporting and review requirements, and that we report back to you before any decisions are taken. (EUR and EB favor)¹²

2. Alternatively, that we seek no change at the present time in the MFN extension and review process for Hungary, Romania and China. (EAP, HA and S/P favor)¹³

1. Source: Reagan Library, Secretary George Shultz Papers, Executive Secretariat Sensitive (12/05/1984–12/07/1984). Secret; Sensitive. Sent through Armacost. Drafted by Kuchel on November 23; cleared by Rodman, Azrael, Abrams, Neitzke, Price, Courtney, Thompson, Palmer, Brown, Niles, and Hurwitz. Kuchel initialed for all of the clearing officials. Shultz’s initials are stamped at the top of the memorandum. McKinley initialed the memorandum on December 5 and again on December 28, and wrote in block letters “treat as original.”
2. Minutes of this meeting were not found.
3. November 1983.
4. September 18–19, 1983. See Document 120.
5. For Nixon’s visit, see Foreign Relations, 1969–1976, vol. XXIX, Eastern Europe; Eastern Mediterranean, 1969–1972, Documents 183 and 184. For Ford’s visit, see Foreign Relations, 1969–1976, vol. E–15, Part 1, Documents on Eastern Europe, 1973–1976, Documents 36–38.
6. Not further identified. James Goodby was head of the U.S. Delegation to the Conference on Confidence- and Security-Building Measures and Disarmament in Europe (CDE) in Stockholm.
7. See Document 276.
8. In the margin, Butler hand wrote, “Per Secto 20004. MB 12/28/84.”
9. Butler wrote on the “Agree” line, “Probably, but get ready to start explorations.”
10. Butler checked “Disagree.”
11. Butler checked “Agree.”
12. Butler checked “Disagree.”
13. Butler checked “Agree.”