Reagan’s Warning That U.S. Will Suspend Rumania’s Mfn Trade Status Unless It Ends Its Tax on Emigran

A spokesman for 37 national Jewish organizations has hailed the Reagan Administration for its warning to Rumania that it will suspend the most-favored-nation (MFN) trade status unless it ends a tax on its citizens who want to emigrate.

Yehuda Hellman, executive vice chairman of the Conference of Presidents of Major American Jewish Organizations, declared in a statement that the American Jewish community “has consistently opposed any imposition of an education tax as a condition for emigration from any land and regrets the Rumanian government’s action in this regard. We therefore fully understand and support the action of our government to defend the principle of free emigration.”

REAGAN’S DEADLINE IS JUNE 30

Hellman’s statement followed an announcement by President Reagan in San Francisco last Friday declaring “my intention to terminate Rumania’s most-favored nation tariff status and other benefits effective June 30, 1983, if the education repayment decree remains in force on that date.”

Reagan said the Rumanian decree, which was published last November, conflicted with a 1974 U.S. trade law intended to remove barriers to freedom of emigration. The law was the Jackson/Vanik amendment to the Foreign Trade Act which links trade with the Communist bloc countries to their emigration policies.

REPEATED WARNINGS BY THE U.S.

After the Rumanian government published its decree, the Reagan Administration warned repeatedly that the education tax imposed on citizens who want to emigrate could affect Rumania’s MFN status.

Last Wednesday, two days before Reagan made his announcement, Rumania’s Deputy Foreign Minister Gheorghe Dolgu met with State Department officials to discuss the issue. Last January, Lawrence Eagleburger, Undersecretary of State for Political Affairs, went to Bucharest to warn the Rumanian government that they were in jeopardy of losing the MFN status.

According to the Rumanian decree, all would-be emigrants under retirement age would have to repay in hard currency the costs of education at about $3,600 for a person of high school education and increasing by about $4,000 for each year of college education. This move was intended to stop the Rumanian “brain drain” abroad. Shortly after Rumania enacted its decree, Chief Rabbi Moses Rosen said it did not apply to Jews seeking to go to Israel because Rumania distinguished between emigration to another country and aliya to Israel. However, last month, Rosen said in Tel Aviv that the Rumanian law would now also be applied to Jews seeking to make aliya.

CONSEQUENCES OF MFN’S SUSPENSION

The suspension of MFN would cost Rumania some $200 million in sales to the U.S. because of sharply increased tariffs. Rumania’s exports to the U.S. last year totalled $400 million, while U.S. exports to that country were valued at $225 million in 1982. In 1981, the U.S. imported $560 million in Rumanian goods, and sold Rumania $503 million in products.

In commenting on Reagan’s announcement, White House deputy press secretary Larry Speakes said termination of MFN would mean that Rumania’s exports to the U.S. would be reduced by half during the first year.

He added that the Reagan Administration still wanted good and constructive relations with Rumania. “We are prepared to recommend we restore the (MFN) status to Rumania if the Rumanian government stops implementing this decree and improves its emigration procedures,” Speakes said.

Hellman, in his statement, also expressed the hope “that circumstances will so alter between now and June 30 that the cutting off of MFN status for Rumania will not be necessary, and that emigration will be able to proceed without encumbrance.”