Dole Suggests a Trade Embargo on Nicaragua : Senate GOP Leader Also Talks of Diplomatic Break if Sandinista Policies Are Not Changed

Senate Majority Leader Bob Dole (R-Kan.) on Saturday suggested an embargo on U.S. trade with Nicaragua to keep up pressure on the leftist government after last week’s House rejection of $14 million in aid to anti-Sandinista rebels.

If adopted, U.S. trade curbs would deliver a severe blow to Nicaragua’s already hard-pressed economy. Despite the bitter relations between Washington and Managua, the United States remains Nicaragua’s largest trading partner.

In the same statement, the GOP leader said the United States should consider breaking off diplomatic relations with Nicaragua if it does not change policies “after a reasonable time has lapsed.”

Blocking of Aid

Dole’s endorsement of trade sanctions, a concept gathering some support on Capitol Hill, came as Secretary of State George P. Shultz accused Congress of turning Nicaragua into a “privileged sanctuary” from which the Sandinistas and their Soviet and Cuban backers can spread subversion in Central America without having to worry about U.S. counterpressures.

Shultz said the Administration is determined to find ways to oppose the Nicaraguan government, although he said that will be difficult to do after the congressional action that blocked aid for the rebels, or contras .

“We’re certainly not able to support those who are fighting for freedom in Nicaragua,” Shultz said in an interview Saturday in U.S. News & World Report. “By law, we can’t do it. It is a real threat when Nicaragua is by U.S. law constituted to be a privileged sanctuary from which the Communists are able to attack their neighbors and try to subvert them. It’s a real problem. But we’re going to work hard to keep the situation from unraveling.”

Shultz said that since the House voted Tuesday and Wednesday, “my phone has been ringing constantly with (members of Congress) who suddenly feel maybe they did something they didn’t want to do.”

A much different view was put forward by Rep. David E. Bonior (D-Mich.), who delivered the Democratic Party’s weekly radio response to President Reagan’s five-minute weekly broadcast address. Bonior said that the United States is already too deeply involved militarily in Central America, conducting maneuvers in Honduras and earlier supplying arms to the contras.

“We are, in fact, deeply involved in a widening war in Central America,” the congressman said. “This is a war that America does not want. It’s based on a policy that shows no memory, no sense of history. We’ve been asked to embrace as freedom fighters a brutal army whose military leadership is composed primarily of members of former dictator Anastasio Somoza’s National Guard.”

Dole’s statement, issued by his office, said in part: “Now is the time Congress and President Reagan should seriously consider imposing a trade embargo on Nicaragua. And after a reasonable time has lapsed, if (Nicaraguan) President (Daniel) Ortega continues to reject President Reagan’s peace initiatives, I believe we should seriously rethink whether there is any real value in maintaining diplomatic relations with what amounts to an outlaw regime bent on exporting revolution.”

Support for an embargo is growing in both parties. Democratic Sens. Sam Nunn of Georgia and Lloyd Bentsen of Texas suggested earlier that the Administration include an embargo in its Nicaragua package. Last year, the United States imported $57 million worth of Nicaraguan goods--mostly beef, bananas and shellfish--while it exported $111.5 million worth--including insecticide, tractors, farm equipment and soybean oil.

The Administration has been reluctant to consider breaking diplomatic relations with Nicaragua because it believes that other Central American governments must take similar action if such a break were to be effective. In addition, the embassy in Managua supplies valuable information that would be lost if ties were severed.

Democrat Bonior also criticized Reagan’s plan to visit the cemetery in Bitburg, West Germany, where about 50 of Adolf Hitler’s elite Waffen SS troopers are buried along with roughly 2,000 other World War II German dead.

“The desire to heal the wounds of war is a noble one, but in reconciliation we must not sacrifice our sense of history,” Bonior said. “Have you forgotten? SS men served as executioners in those concentration camps where millions of Poles, Czechs, Slovaks, Ukrainians (and) 6 million Jews were sent to their deaths . . . . They were the elite divisions that massacred in cold blood over 70 American prisoners of war at the Battle of the Bulge.”

Reagan Silent on Bitburg

In his own Saturday speech, Reagan said one purpose of his trip to Europe is “to commemorate this as an anniversary of peace and the beginning of a new relationship with former enemies.” But he ignored the raging Bitburg controversy.

Responding to a direct question, Reagan declined during an interview with six European journalists to discuss Bitburg, declaring that he is going as a guest of the West German government and “looking forward to the entire trip.”

In the same interview, conducted Thursday and made public Saturday by the White House, Reagan also told a questioner he is “very willing” to meet with Soviet leader Mikhail S. Gorbachev if the Russian attends, as expected, the U.N. General Assembly session in New York this fall.

Reagan said he “certainly could rearrange” his schedule to accommodate Gorbachev’s plans and feels that such a meeting should take place because “I’ve always believed that people get in trouble when they’re talking about each other instead of when they’re talking to each other.”

When they meet, Reagan said, “there should be some open discussion about some of these differences--some of the things that cause us all to be suspicious of each other--and see if we can’t get some things out in the open, on the table, so that we understand each other better.”

Discussing one area of misunderstanding, Reagan said he thinks that the Kremlin “missed a great opportunity to achieve some stature in the world” by refusing to accept blame for the killing last month of Maj. Arthur D. Nicholson Jr., a U.S. intelligence officer, by a Soviet sentry in East Germany and its failure to extend an apology and compensation to Nicholson’s family.