Foreign Relations of the United States, 1964–1968, Volume XVII, Eastern Europe

153. Memorandum of Conversation¹

SecDel/MC/51

New York, October 5, 1966, 8 p.m.

SECRETARY’S DELEGATION TO THE TWENTY-FIRST SESSION OF THE UNITED NATIONS GENERAL ASSEMBLY

New York, September–October 1966

SUBJECT

• Visit of Assistant Secretary Solomon to Bucharest; East-West Trade; Romanian Exports

PARTICIPANTS

• U.S.
  • The Secretary
  • Ambassador Goldberg
  • Asst. Sec. Solomon (E)
  • Dep. Asst. Sec. Stoessel (EUR)
• Romanian Side
  • Foreign Minister Corneliu Manescu
  • Dep. Foreign Minister Mircea Malita
  • Amb. to the UN Georghe Diaconescu
  • Sergiu Celac, Interpreter

The Secretary said that Assistant Secretary Solomon would be in Europe next week and that he might be able to pay a brief, informal visit to Romania to talk with trade representatives if the Foreign Minister thought this would be helpful. The Secretary said that he raised this matter since it was his hope that early in 1967 Congress will take up the East-West Trade Bill. Mr. Solomon will be one of the principal witnesses for the Administration, and it would be useful for him in talking with Congress if he had a chance to get the feel of the situation in Romania.

The Foreign Minister responded that of course this could be arranged, and he wished all success to Mr. Solomon in connection with the Trade Bill.

The Minister said this question of Mr. Solomon’s visit led into a very important part of our bilateral relations, namely, that of trade. He understood that an important delegation of American industrialists would be coming to Romania soon. Also, talks have been held with Phillips Petroleum about obtaining a license for some of their processes. This showed that there was a possibility of purchasing licenses and equipment in the field of oil processing. The trouble started, however, with Romanian exports.

In general, the Foreign Minister said, we are in a sad situation concerning trade. He asked that what he had to say be conveyed to the highest level of the American Government. Before he left Bucharest, he had talked with Secretary-General Ceausescu, who had said with regard to bilateral relations with the US, that Romania wished for normal relations with the US. Now, however, things were not going as smoothly as they should; the fact that Romania is unable to buy certain things it would like or to sell some products it wished to export shows that there are difficulties. All of this takes on a certain aspect of political pressure.

The Minister recalled the Firestone deal which had almost been completed when rightist circles intervened and caused their arrangements to be canceled. This was hard to understand. The Minister knew that the Administration in the US was not free to do as it would like and that Congress is a problem. Nevertheless, the Minister is dealing with the Secretary and not with Congress. He had the impression that we might want the Romanians to change their regime, and if that happened, things would be easier.

This is not the way to go about matters, however, the Minister said. Transactions should be considered strictly from the commercial point of view. In general, he thought the situation was rather strange. We seemed to be able to discuss various things in a constructive way and to understand each other’s point of view, but still we were unable to move forward on trade. The Minister referred to Ceausescu’s speech in which he had said that it is not any fault of Romania that relations with the US do not proceed as they should.

The Secretary responded that the US Constitution was very complicated. It was drawn up by men who did not wish to give any element in the Government supreme power. The President does not control Congress, even when his party has a majority. Also, the Congress has a special responsibility in the field of foreign trade which is provided for in the Constitution. These are problems for the US to resolve, not the Romanians. The President hopes to resolve them and to make a good start this coming year. The Secretary said we have been told by key Congressional leaders that they will not take action on the Trade Bill until after the November elections. We don’t agree with this position, but we must face facts.

A second problem in the development of our trade relations, the Secretary said, was that we cannot give directions to private industry or labor unions. We deeply regretted what happened in the Firestone case. We had done our best to prevent this, but Firestone, of course, was free to do what it wanted. It turned out they were overly timid.

All of these things created complications in our trade relations. However, problems which arise between systems of private enterprise and systems of socialism can be resolved, although this may take time. The Secretary noted that Romania’s best customer was the FRG, which is a private enterprise system.

The Secretary wondered what he, the President, or Assistant Secretary Solomon could do in the present circumstances before approval of the East-West Trade Bill. We can try to remove obstructions subject to administrative action, and we can encourage US businessmen to trade with Eastern Europe. We have done this. We can also advise Romania concerning opportunities in our markets for sale of its products. Frankly speaking, however, in the absence of most-favored-nation treatment, our tariff regulations are very severe.

Manescu said he understood these problems, which he has known about for a long time. He wished to note, however, that a solution should not be sought by trying to persuade the Romanians to do things like the US or by the Romanians attempting to change the outlook of the United States to meet their views. While these may be desires on the part of both sides, they are Utopian; only life will show the way.

The Secretary commented that we should put these ideological matters “in the corner.”

The Foreign Minister continued that, when Mr. Solomon comes to Bucharest, he will find people who are favorable toward trading with the US. Of course, trade cannot be at a very high level. The general outlook for trade between our two countries was that it will not be extraordinary in size; however, it will play a role in our relations. It is a question of living together and of establishing a basis on which to build. He predicted that Mr. Solomon would see that Romania wants better relations.

The Secretary confirmed that we on our side are interested in better relations with Romania and do not wish to quarrel about ideological matters. Of course there are things about which we disagree, but there is no government in the world with which we agree on everything. He also wished to say that we are not indifferent to small amounts of trade. The Secretary noted that he had gone to Germany to speak to the Chancellor personally about buying American chickens. We are interested in these things, whatever the size of the deal—$100,000, $100 million, or $100 billion. We do not treat these matters lightly. The Secretary had noted that our exports to Romania had increased rapidly in recent times, whereas the imports from Romania had not gone up so fast. He was concerned about this and felt we should find a way to improve the situation. Mr. Solomon noted that our exports to Romania in the last six months amounted to $11 million—a result of our liberalized licensing policy.

When the Foreign Minister asked how Romania could pay for imports from the US, the Secretary said that this could be done by tourism in part. Manescu replied that US tourists in Romania are very stingy. Most of them, he said, are of Romanian origin and stay with their relatives in Romania rather than in hotels.

Ambassador Goldberg said that the Minister should put out of his head any idea that the Administration of the US or officials responsible for foreign policy have any concept that trade should be used as pressure in deciding differences of opinion between countries. He would not be honest if he said that there were no Congressmen who felt this way, but for the Administration, there was definitely no idea of political pressure or of imposing ideological conditions on trade.

Referring to the world food crisis, the Secretary asked if Romania had a good harvest this year. Manescu answered affirmatively, saying there had been a good wheat crop and that corn and meat was also good.

In response to questions, the Minister said that Romania’s principal exports are oil, wood, furniture, plywood, chemical products and agricultural products, especially corn. Exports to Germany consisted largely of agricultural products, furniture and oil. As far as Romania’s balance of payments is concerned, Manescu said that it is more or less in equilibrium.

1. Source: Department of State, Conference Files: Lot 66 D 347, CF 85. Confidential. The source text bears no drafting information; the memorandum was approved in S on October 18. The meeting was held in Rusk’s quarters. The source text is labeled “Part IV of VI;” memoranda of this conversation dealing with Romanian-German relations, East-West relations, Vietnam, Manescu’s travel, peacekeeping, and Cyprus are ibid.