It may just have been coincidence, but it sure looked like a case of cause and effect by the United States against a foreign power.
The sun had barely risen on this side of the Atlantic one day last week when Abraham Ribicoff, the Democratic senator from Connecticut, called a trade subcommittee hearing to order and declared that Hungary's most-favored-nation status was "in serious jeopardy."
The reason: American chemical makers were accusing the hungarians of wholesale infringement of American patents on insecticides and other agricultural chemicals.
A hort time after the hearing, as the sun was setting over Eastern Europe, Hungarian officials notified the Monsanto Co.'s man in Budapest they were ready to sign what Monsanto, the leading plaintiff in this case, wanted them to sign -- namely, a pledge in effect to make at least some royality payments.
For the U.S. government and the nation's business community, the case set a significant precedent. More than just a threatening word from a powerful senator had been involved in persuading the Hungarians.
The Commerce Department had leaned of them heavily, too. It was, altogether, an unusual instance of an industry uniting with the government to take a tough stance against a foreign trader.
"We're very pleased," said Kemptom Jenkins, Commerce's deputy for East-West trade, about the Hungarian solution. "For the first time, out side combined and confronted a state-controlled economy with a unified position."
For their part, though, the Hungarians say they hadn't been doing anything wrong. They deny U.S. charges of patent pirating. And they are upset about the way the matter was handled.
"We're not happy about it because it was not a normal way to handle problems," and Gyula Lakos, Hungary's commercial counselor in New York. "It was not natural to use political pressure as they did."
The fact is, several Hungarian-made agricultural chemicals do bear very close resemblance to those made in America. There is one that looks like Monsanto's "Roundup," a weed killer; another that looks like FMC's "Furadan," an insecticide; and another that looks like Stauffer's "Eradicane," a corn herbicide; plus some others.
Moreover, not only have the Hungarians been making and selling their own brands freely in Hungary, they have sold them to international brokers, too, who have funneled the chemicals to farms from Brazil to Taiwan. There is no evidence the Hungarian brands havw reached the United States.
American manufactures were convinced the Hungarians had simply copied their formulas. They were convinced of this all the more when a patent application by Monsanto in Hungary was held up because of opposition from Hungarian chemical producers.
The Hungarians didn't think there was any reason to grant a patent. They conceded that their chemicals looked very much like the American counterparts, but the Hungarians said their production methods weren't the same as the American ones and argued that a U.S. From could not claim a monopoly on all ways of producing a product.
Things were not expected to get any better, at least from the American point of view. The Hungarian government had singled out the world agricultural chemical market as a prime way of getting the hard western currency Hungary is seeking continually.
Here, the National Agricultural Chemicals Association estimated the United States stood to lose $150 million in exports this year as a result of Hungary's push -- a figure which, it was said, could increase five times by 1983.
Alarmed, the Commerce Department led a delegation to Hungary in June. An agreement was reached between the American and Hungarian governments in which both nations promised to respect the trading laws of the other and, more importantly, said they would make sure their international sales brokers did, too.
This government-to-government resolution was intended to serve as an umbrella under which U.S. and Hungarian firms would settle their differences.
But the Hungarian producers reportedly balked. Finally, Hungary was due to come up before Ribicoff's trade subcommittee for an annual review. Hungary along with Rumania had received most-favored-nation trade status last year. They are the only Socialist countries that have been given the nondiscriminatory trade standing.
Members of the U.S. Chemical industry asked that Hungary's MFN status be suspended. They said the Hungarians were stalling, giving the impression of negotiating without having any intention of stopping their alleged illicit practices.
U.S. executives also complained of being blackmailed. Thy said the Hungarians had offered to reduce chemical exports if the Americans would agree to purchase some of the surplus.