President Bush Grants Hungary Most-Favored-Nation Trade Status
Annotation
In July 1989, President George H. W. Bush visited Poland and Hungary, the two countries in Eastern Europe in which substantial political and economic reforms seemed most likely to occur first. Pursuing a new US policy he referred to as “beyond containment,” Bush wished to show US support for a movement toward the integration of Eastern Europe into the “community of nations.” During a speech on July 12 at Karl Marx University in Budapest, Bush offered “partnership” with Hungary in an effort “to propel reform” and promised that the US would grant Hungary permanent most-favored-nation (MFN) trade status, thus normalizing trade terms between the two countries, if Hungary passed legislation to comply with the Jackson-Vanik amendment to the 1974 Trade Act. That Act had been passed to encourage more liberal emigration policies in countries with non-market economies that had imposed barriers to emigration. Hungary had begun to dismember the barbed wire fences and mines surrounding its border with Austria in May 1989, prompting the largest exodus of East Germans since August 1961 (when East Germany constructed the Berlin Wall to stop the flow of emigrants to the West). In September, Hungary formally annulled a 1968 treaty with East Germany designed to prevent East Germans from escaping to the West, prompting Bush’s offer of MFN status, which was formally granted during the signing ceremony at which Bush spoke the following remarks. The Soviet Union, informed in advance of Hungary’s decision, had declined to object, and within three days of Hungary’s announcement, more than 13,000 East Germans emigrated to the West through Hungary.
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Remarks at a Ceremony Granting Most-Favored-Nation Trade Status to Hungary
October 26, 1989
Thank you. Please be seated. On this beautiful day at the White House, welcome.
Secretary Baker and Secretary Mosbacher; Carla Hills, our able U.S. Trade
Representative; I see our Secretary Derwinski and Watkins; Bill Reilly; Bruce Gelb. Mr.
Teller, it's a delight to see you here, sir. And the distinguished Members of the United
States Congress who are with us, welcome, all. I see the chairman of our Foreign
Relations Committee, Senator Claiborne Pell, here, and Bill Broomfield. All of you,
welcome.
It was my privilege to return to Hungary last summer and become the first American
President to visit a nation that is so much a part of Europe and so much a part of America.
I had a chance to discuss this just Monday when the new Ambassador came to the White
House to present his credentials. And I welcome you, sir, and am just delighted you're
here representing your country.
At Karl Marx University, before the very statue of Marx himself, I met students, teachers,
and entrepreneurs who are making a bold break with the past. And in their bright faces I
saw a burning idealism and a determination to escape the dead hand of ideology forever.
And I pledged my strong support to this process of democratic change in Hungary. I said
I would ask Congress to authorize million and to establish a Hungarian-American
enterprise fund, million to open an environmental center for central and Eastern Europe
in Budapest, and another million for a wide range of cultural and exchange programs. I
submitted these proposals to Congress in early September. We're working vigorously to
ensure congressional action to make an American investment in Hungary's future.
And I also promised to stimulate American business investment in Hungary by extending
the business insurance of the Overseas Private Investment Corporation to Hungary.
Ambassador Fred Zeder, the President and the CEO of OPIC, led a delegation to Hungary
just 2 weeks ago to plan for operations to begin once the corporation receives the
enabling legislation from the Senate. And last month, Secretary Bob Mosbacher led a
major governmental and private investment mission to Hungary, encouraging steps
toward new ventures.
Hungary's already starting to enjoy tangible results of our commitment to support reform.
Just in September, an American corporation purchased 100 percent of a Hungarian
trading firm, the first such total acquisition in Eastern European history. And this is just
one example of many new American ventures within Hungary.
I also said that the Peace Corps will make its first European mission to Hungary to teach
English in every county of that nation. Peace Corps Director Paul Coverdell recently led
a delegation to Hungary to plan this mission.Bill Reilly, the EPA Director, and Bruce
Gelb, next to him, our USIA Director, have also led missions to Hungary to develop and
implement our environmental and cultural exchange programs.
In Budapest, I also said that as soon as the Hungarian Parliament passed emigration
legislation then under consideration that I would notify our Congress that Hungary meets
all the emigration criteria under U.S. law. That would qualify Hungary for most-favorednation treatment. And I am pleased to say that on September 26th Hungary fulfilled its
part of the bargain, and I'm here today to fulfill our part of the bargain.
Before me are three documents, one advising the Secretary of State that I've determined
that Hungary meets our emigration criteria; the others informs each of the Houses of
Congress. And with my signature, these documents will grant Hungary the most liberal
trade treatment possible under U.S. law, making it the first country subject to the
Jackson-Vanik amendment ever to be granted a waiver from annual reviews of its
emigration practices. But you see, we feel that today's action represents something far
greater than a mere trade agreement. It signals the recognition that a quiet revolution is
taking place in thousands of shops, farms, and factories. It signals the rebirth of Hungary
as an entrepreneurial nation.
Our measure will, of course, grant these new Hungarian entrepreneurs access to the
largest single market in the world; but the peoples of America and Hungary are
exchanging more than blue jeans and fine wines. We're exchanging ideas and ideals that
can only be the shared province of free peoples. The documents I'm about to sign refer to
the Republic of Hungary. Just 3 days ago, on the anniversary of the 1956 revolution,
Hungary scrapped the title ``People's Republic,'' that symbol of the one-party system
imposed on Hungary after World War II. And it is this new Hungarian Republic that has
adopted a bill of rights inspired by our own Constitution to guarantee freedom of the
press, assembly, and religion.
And Americans watch these acts of national courage with wonder, admiration, and
something more -- a willingness to help. So, we're not passive observers. We are active
supporters of reform. Let no one doubt our commitment to freedom's success in Eastern
Europe. For we know that we are privileged to participate in a very special moment in
human history: we're witnessing an unprecedented transformation of Communist nations
into pluralistic democracies with market economies.
In Budapest, Radio Free Europe is broadcasting from its first bureau in Eastern Europe.
It's a remarkable thing. And in Warsaw, a dissident who once languished in prison now
presides over their Parliament -- incredible. In East Germany, hundreds of thousands of
courageous men and women march arm in arm through the streets of Leipzig to make a
peaceful stand for freedom -- inspiring. It is in these amazing scenes that we see a portrait
of the indomitable spirit of man. Throughout Eastern Europe and in the Soviet Union
itself we see evidence of the ascendancy of freedom. We see signs of a new Europe
which no one need fear, a Europe whole and free. And as we witness this historic tide of
freedom, riding at the crest is one nation, the people of the Republic of Hungary. And to
them I say: We admire you, we support you, and we welcome you as friends of freedom.
Thank you. And now it is my pleasure to sign those historic documents granting Hungary
continued most-favored-nation treatment.
Note: The President spoke at 10 a.m. in the Rose Garden at the White House. In his
remarks, he referred to Secretary of Energy James D. Watkins, scientist Edward Teller,
and Hungarian Ambassador to the United States Peter Varkonyi.
Credits
George H. W. Bush, "Remarks at a Ceremony Granting Most-Favored-Nation Trade Status to Hungary," speech, The White House, Washington, D.C., October 26, 1989, Bush Presidential Library, Documents and Papers, Bush Library (accessed May 14, 2008).