WASHINGTON (AP) _President Bush Thursday extended most-favored-nation trade privileges to Hungary and made it the first country to be freed from a 1974 law denying U.S. trade credits to most communist nations.

Three days after Hungary declared itself a democracy, the president signed a series of proclamations in a Rose Garden ceremony exempting Hungary from the so-called Jackson-Vanik amendment.

The action gives Hungary full access to U.S. markets and the lowest possible tariff rates, putting them on an equal basis with major U.S. trading partners.

“Hungary fulfilled its part of the bargain. And I’m here to fulfill our part of the bargain,” Bush said.

The Jackson-Vanik amendment to the Trade Act of 1974 denies trade benefits to nations that restrict emigration. It is named after its congressional sponsors, the late Sen. Henry M. Jackson, D-Wash., and former Rep. Charles Vanik, R-Ohio.

The sanctions have been the centerpiece of U.S. trade policy toward the communist world and remain largely in place against the Soviet Union and most nations in Eastern Europe.

Bush said that Hungary, under liberalizing legislation approved by its Parliament on Sept. 26, now meets the free-emigration requirements of U.S. law.

“Today’s (Thursday’s) action…signals the recognition that a quiet revolution is taking place in thousands of shops and farms and factories,” Bush said in signing the three documents.

“The peoples of America 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,” Bush said.

He said the “people of the Republic of Hungary” were “riding the crest” of the wave of democracy sweeping through Eastern Europe.

The Jackson-Vanik law requires an annual report to Congress on the emigration policies of each nation covered under the restriction.

Bush today signed a report to Congress asserting that the Republic of Hungary does not “deny its citizens the right or opportunity to emigrate.”

“There are no known cases of government refusal to allow emigration from Hungary, whether to join a close family member in the United States, or for any other reason.”

He also signed a notification to Congress and to Secretary of State James A. Baker III that he was lifting the 19-year-old trade sanctions.

The Jackson-Vanik amendment was originally passed by Congress to protest Moscow’s denial of emigration rights to Soviet Jews.

The administration has cited some recent improvement in emigration policy on the part of the Soviet Union under political reforms now under way, but has said it is not enough to justify a lifting of the Jackson-Vanik sanctions.