Most-favored-nation status spurs favorable trade flow with US
Four times a year United States Department of Agriculture officials arrive in this small town near the Austrian border to go through the Gyor Works - a modern slaughterhouse. So far this clean and modern plant has passed inspection and, as a result, some Americans can dine on Hungarian hams, sliced bacon, and other canned pork products.Skip to next paragraph
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Laszlo Koros, a director of the state-owned Company for Livestock Sale and Meat Processing Industry in Gyor-Sopron, would like to deliver more than the current $40 million of meat products to the United States, sold under the Celebrity and Atalanta labels. But the plant is already running near capacity. And, he says, the company would need some sort of sales guarantee to expand the plant once again.
''The cost of borrowing would exceed the profits,'' he figures.
Jozsef Molnar also would like to see an expansion of Hungarian sales to the US. The general manager of Tannimpex, the Hungarian foreign trading company for hides, leather, and fur, will be traveling with some 25 representatives of Hungarian companies to Minneapolis June 11-12 to join executives from 60 or 70 US companies to discuss Hungarian-American economic and trade relations.
Hungary's main convertible-currency trading partners remain nearby West European nations. But since Hungary obtained most-favored-nation tariff treatment in 1978, trade with the United States has grown considerably, though not as much as anticipated.
Total bilateral trade has risen from $116.6 million in 1978 to about $260 million last year.
Principal US exports include vehicle parts, fertilizers, chemicals and pesticides, air and gas compressors, measuring devices, hides and skins, bulk pharmaceuticals, and machinery.
The main Hungarian exports to the US were canned meat, footwear and clothing, vehicle parts (buses), and various food and manufactured items.
Mr. Molnar heads the Hungarian side the US-Hungarian Economic Council, which will be considering in Minneapolis such questions as how to expand joint ventures and other cooperative business ventures, further cooperation in the agricultural area (machinery, biotechnology, and food-processing research), new opportunities in computer technology including software, and business possibilities in medical technology and energy-saving systems.
Hungary, like many nations, is keen to pick up advanced Western technologies. This obviously has economic advantages. It also could prevent some of its most talented scientists or technicians from seeking greater opportunities in the West.
''We want to keep our big shots in Hungary,'' said Mr. Molnar.
(Mr. Molnar's state-owned export company occupies a building of historical interest. It was from the balcony of his office that the government announced its tragic decision in 1941 to support Hitler in World War II. After the defeat of the Axis powers, a peace treaty was signed by the Allies with Hungary in 1945 in a room adjoining his office - now a board room.)
Tannimpex itself sells some 1.5 million pairs of shoes and other leather goods to the US, worth around $70 million.
Ernest Fischer, a vice-president of LaTanni International Corporation, New York, which imports many of the shoes and some other Hungarian leather goods, says his firm could sell more. But only some of Hungary's 33 shoe plants are geared up to make American-style shoes (mostly for women). Most Hungarian shoes go to Comecon nations, including the Soviet Union (where they are snapped up quickly), or to Western Europe.
Hungary's most-favored-nation status is reviewed annually, conditional on freedom of emigration for purposes of family unification. Mr. Molnar would like longer-term MFN status, maintaining that this would facilitate business planning by Hungarian firms. There have been proposals in Congress to amend the United States Trade Act of 1971 to permit multiyear MFN status for Hungary and China. But nothing has passed yet.
In general, Hungarians agree with Tibor Antalpeter, director general of the Ministry of Trade, on US-Hungarian economic relations: ''We don't have serious problems with the United States.''
The feeling is mutual with Americans. According to one foreign business expert here, Hungarian state companies are less doctrinaire and more pragmatic in their dealings with Western firms than similar companies in other Comecon nations. ''There is more of an entrepreneurial spirit here,'' he said.