Senate Hearings Open Today : Romania’s Most-Favored Trade Status Under Fire

A year ago, when Romania breached the Soviet Bloc’s Olympics boycott and became the only Warsaw Pact country to attend the Los Angeles Games, the international prestige of this small Balkan country was riding high.

But now it is under attack by political conservatives and human rights activists in the United States, who are urging the Reagan Administration to rescind Romania’s most-favored-nation trading status. Senate Finance Committee hearings on U.S. relations with Romania are scheduled to start today in Washington.

The critics contend that Romania’s relatively independent foreign policy, which the United States has sought to encourage with trade benefits, is a sham. They also argue that President Nicolae Ceausescu’s regime ranks with, and may exceed, the Soviet Union in the ruthlessness with which it suppresses political and religious dissent.

The loss of most-favored status, which exempts its exports to the United States from a variety of tariffs, would be a serious blow to Romania’s hard currency earnings and its ability to pay off a $7-billion debt to the West.

The United States has granted Romania a variety of trade concessions since the early 1960s and most-favored-nation status since 1975. Bilateral trade is currently running at $1.2 billion a year, with Romania exporting $896 million in goods to the United States last year, mostly in refined petrochemical products.

The debate over Romania’s unusual trade status--China, Hungary and Yugoslavia are the only other Communist countries so privileged--recurs each year, because the White House extends it only on an annual basis.

But the argument this year has been sharpened, and its outcome made less certain, by the addition of an unusual ally on the opposition side: the former U.S. ambassador to Romania, David B. Funderburk.

A protege of conservative Sen. Jesse Helms (R-N.C.), the 41-year-old Funderburk resigned in May after serving as ambassador to Bucharest since 1981. In newspaper interviews and materials distributed by the conservative Heritage Foundation, Funderburk has argued during the past two months that Romania has “outfoxed” the United States, deceiving the White House and the State Department into believing that it has distanced itself both economically and in foreign policy from Moscow, even though it remains a member of the Warsaw Pact.

“There is a street term the Romanians use, smecher , meaning someone who is sneaky, crafty, a wheeler-dealer,” Funderburk told the Washington Post in May, immediately after resigning his post. “That applies to the government in Bucharest.”

Funderburk contends that Romania’s economy is more closely integrated with that of the Soviet Union than American policy-makers have thought and that Moscow and Bucharest closely orchestrate Romania’s demonstrations of independence to curry trade favors from the West.

If U.S. policy is unable to bring about internal political and economic reforms, the former ambassador has said, a harder line toward Romania is in order, including the possible revocation of its favorable trade status.

A former university professor who speaks Romanian and studied in Romania in the 1970s under a Fulbright grant, Funderburk was supported in his quest for the ambassadorship in 1981 by Helms. Funderburk has since indicated to friends that he would like to run for Congress from North Carolina.

Romanians Incensed

Not surprisingly, his remarks have incensed the Romanians, who considered him young, inexperienced and out of his depth as ambassador.

“He may have spoken the language, but he learned nothing while he was here,” said a ranking Romanian official, who asked not to be named. “We have a saying here, that David’s ‘hat was too big for his head.’ ”

Senior career diplomats in the U.S. Embassy tend to agree with this harsh assessment. Funderburk appears to have left a complex tangle of personal and bureaucratic conflicts among the embassy staff. Some were intensely loyal to him. Other, more experienced diplomats felt that he was unduly influenced by the conservatism of his sponsor, Helms, and unrealistic in expecting U.S. trade concessions to bring about fundamental policy changes in a Soviet Bloc country.

“He was a very political animal, and not a very good one at that,” said an veteran diplomat who worked closely with Funderburk. “He was certainly honest in his intentions, but probably something of a captive of his sponsor.”

In part, this officer said, Funderburk drew his conclusion that Ceausescu’s independent image was founded on disinformation from the writings of a Soviet defector, Anatoly M. Golitsin. But Golitsin, a major in the Soviet KGB who defected in Finland in 1961, left the Soviet Union four years before Ceausescu came to power, and in any case would have had no more than peripheral contact with high-level policy toward Eastern Europe.

‘This Conspiracy Theory’

Western diplomats interviewed in Bucharest said that Funderburk was largely alone in believing what one called “this conspiracy theory.” The general belief is that, while Romania’s relations with Moscow are complex, and may involve an element of theater, their differences are genuine.

Romania, for instance, refuses to allow the stationing of Soviet troops on its soil and does not send ground troops to Warsaw Pact maneuvers. But it does send whole command structures down to the regimental level, and it does participate with the Soviet Union in naval and air exercises and training programs.

Unique among Soviet Bloc countries in maintaining relations with Israel, Romania served as an intermediary between Israel and Egypt and helped arrange the breakthrough summit between Egyptian President Anwar Sadat and Israeli Prime Minister Menachem Begin in 1977.

Its dependence on Soviet oil and gas and other raw materials has grown in recent years, but not, diplomats contend, out of choice but as the result of an overly ambitious, Stalinist-style program of heavy industrialization that has left the country increasingly dependent on imported natural resources.

In the field of human rights, Western diplomats say, it is true that Romania ranks with Czechoslovakia and the Soviet Union in its hard-line treatment of dissidents and religious activists. At the same time, however, Romania allows a higher level of emigration to Israel, West Germany and the United States than any other Warsaw Pact country.

In 1983, the United States threatened to suspend Romania’s most-favored-nation status in response to Bucharest’s decision to impose a tax on would-be emigrants based on years of free education they received. The tax was dropped.

The long lines of visa applicants that form daily outside the U.S. Embassy on Snegov Street here are an unusual sight in Eastern Europe. About 3,000 Romanians are currently being allowed to emigrate each year to the United States alone.

Unqualified Emigrants

Emigration is by no means trouble free, however. A number of Romanians have been refused exit visas, while about 200 were given passports to leave earlier this year, although they did not qualify to emigrate under U.S. law.

Funderburk has accused Bucharest of trying to follow Cuba’s example of dumping malcontents and other undesirables on the the United States, but other U.S. officials believe a more likely explanation is bureaucratic error.

Western diplomats also complain that the government has an irritating tendency to create human rights problems, in some cases by jailing dissidents, so it can then proceed magnanimously to solve them. Even so, on balance, most diplomatic observers believe that the level of emigration, and the ability simply to discuss human rights issues with the Ceausescu government, are direct and significant returns for most-favored-nation status.

Most-favored-nation trade status “does not guarantee they’re going to change the system,” one diplomat said. “But nothing the Congress could legislate would do so. Without MFN, there would be nothing. With it, you have some leverage to discuss these issues.”

Two beneficiaries of this leverage are dissident Romanian poet Dorin Tudoran and an Orthodox priest, the Rev. Georghe Calciu. Senate Majority Leader Bob Dole (R-Kan.) announced in Washington on Monday that Bucharest has granted permission for the two men to emigrate to the United States as soon as they can obtain American visas and complete other formalities.

Reportedly prohibited from working since 1982, the 40-year-old Tudoran applied last year for permission to emigrate to the United States. Last April, he began a hunger strike, then disappeared, apparently into detention by the security police, known as the Securitate. Calciu had also served time in prison.

Appeals by human rights activists in Western Europe brought no response from Romanian embassies until the United States took up the cases.