Shultz in East Europe confers on human rights. Links favorable US trade ties to improving record

Secretary of State George Shultz is midway through his four-day swing through three communist capitals in central and southeastern Europe. He flew Sunday from West Berlin to Bucharest. After talks with Romanian President Nicolae Ceausescu and others, he traveled on to another East bloc capital, Budapest, later the same day. He is due in ``nonaligned''Yugoslavia on Tuesday.

The Romania and Hungary visits are in line with the Reagan administration's policy of developing relations with East bloc countries individually rather than dealing with the bloc as a single entity.

In Yugoslavia's case, the Shultz visit will be little more than a reaffirmation of US concern and support for that country's independent position -- albeit with an unwritten inclination toward the West.

One of Mr. Shultz's major objectives -- apart from briefing the three countries on the Geneva summit and on bilateral affairs -- is to deliver a strong reminder of US concerns on human rights. With Romania, this was the key issue.

News agencies reported from Bucharest that, at the start of his talks with Mr. Ceausescu, Shultz handed the Romanian President a letter from President Reagan. Its contents were not disclosed.

After his meeting with Ceausescu and other Romanian officials, Shultz said the talks were ``constructive, worthwhile, and far-ranging.'' He said much of the discussion was about Romania's criticism of US policy against the transfer of sensitive technology to communist countries. Shultz added that he agreed with a comment Ceausescu had made that relations between the two countries ``could be better.''

The visit to Romania is taking place at a sensitive time for Ceausescu. His country faces severe economic problems. Also, he is confronted with the possibility of a cutoff of its preferential trading arrangements with the US if Romania does not improve its repressive human rights record. Already several measures submitted in Congress are calling for an end to Romania's most-favored-nation status, under which the country's goods enter the US with favorable tariffs.

Were that to happen, Romania would lose the foreign exchange it needs to deal with its large debt to the West. It would also end Washington's relatively favorable attitude toward the country, because of its independent foreign policy attitudes within the Soviet bloc.

Moreover, an end to Washington's preferential treatment of Romania on trade could create serious political difficulties for Ceausescu at home.

Last week, Hungarian Premier Gyorgy Lazar made a brief visit to Belgrade. He was followed by Ceausescu, who, it seems, was anxious to confer with the Yugoslavs before Mr. Shultz's arrival in the area. The Romanian leader came amid another round of speculation regarding his health, which is reportedly declining.

Ceausescu's anxiety apparently stemmed from Romanian domestic problems such as the reported local unrest touched off by frustration over the low standard of living in Romania -- the lowest in Eastern Europe.

According to one report, peasants, smarting under spiraling production demands made both on the collectives and now on their tiny private plots, attacked grain silos. The Army reportedly helped restore order.

Yugoslavia seems to give credence to the reports, since the previous trickle of Romanian ``refugees'' across the border into Yugoslavia has in the last few months become what one Yugoslav source described as ``a steady flow.''

Both Hungary and Yugoslavia seem apprehensive of the situation in Romania.

For more than a year, the Hungarian government has been criticizing Romanian repression of the Hungarian minority in Romania.

In a communiqu'e on Hungarian Premier Lazar's visit, both sides put a deliberate stress on minority rights by expressing mutual satisfaction over the situation of Hungarians in Yugoslavia and a smaller Serb minority in Hungary. But, according to informed accounts of the talks, the Yugoslavs urged the Hungarians to ease up on the Transylvania minority issue, at least for the time being, because of Ceausescu's domestic problems.

Speculation since the start of the year over ``what next'' in Romania -- after Ceausescu -- is also apparently taken seriously in Yugoslavia and in Hungary.

Criticism turns on economic policies that are widely believed to have placed too great a strain on the country's resources.

According to Western diplomats in Bucharest, these criticisms are now heard in conversations with senior Romanian officials. Apparently there is as yet no overt criticism of Ceausescu himself.

But there is unprecedented implicit criticism of Romania's overambitious economic policies, of which Ceausescu is sole author.

Belgrade and Budapest are both concerned that if Ceausescu's personal position were to come under direct challenge, a destabilizing element could be introduced in Romania that would not be in Yugoslavia's or Hungary's interest.

An uncertain situation in Romania -- particularly when a change of leadership happens -- would be viewed as a destabilizing factor in the Balkans and central-southeast Europe.

Such a development, analysts say, would bring the Soviet Union into the picture.