Trade, Airline Embargoes Proposed for Nicaragua : Ban Loom After Rebuff by Congress

From Times Wire Services

In a move virtually dictated by congressional refusal to aid anti-Sandinista rebels, the Reagan Administration prepared today to impose trade and airline restrictions on the leftist Nicaraguan government.

Both critics and supporters of President Reagan’s Nicaragua policy called on the Administration last week to emphasize economic sanctions against Nicaragua rather than aiding an estimated 15,000 rebels intent on toppling the Sandinista government.

After Congress refused to give Reagan $14 million in aid for the contras, the Administration reviewed the option of a trade embargo against Nicaragua.

Some officials, who asked not to be identified, said Administration consideration of sanctions was hastened by the visit of Nicaraguan President Daniel Ortega to Moscow, where he received pledges of assistance Monday from Soviet authorities.


Accusation Avoided

The Administration has been reluctant to impose a trade embargo on Nicaragua because this would enable the Sandinista government to blame the United States for Nicaragua’s economic problems.

The officials said, however, that those arguing for continuing restraint were undercut by Ortega’s visit to Moscow.

The officials said options for dealing with Nicaragua were explored Monday at an interagency meeting. The alternatives discussed included a trade embargo or some type of “import-export restrictions,” as well as suspension of the landing rights of Nicaragua’s airline, Aeronica, in the United States.

Capitol Hill Advised

Although the Administration withheld an announcement of trade sanctions before Reagan left to attend the industrial summit in West Germany, the word was passed to Capitol Hill.

A spokesman for Sen. Lloyd Bentsen (D-Tex.) confirmed that Secretary of State State George P. Shultz has suggested Reagan suspend trade and airline service with Nicaragua.

“These are the only specifics we have been advised of,” the spokesman said.


White House spokesman Larry Speakes would say only that Reagan is “reviewing his options” in dealing with Nicaragua. He said there would be no announcement today, and that before any announcement is made it will be discussed with members of Congress.

Europe Departure

Reagan leaves tonight on a 10-day European trip with Shultz and other foreign policy advisers. If a crackdown on Nicaragua is announced, it may be done in Bonn.

Sen. Richard G. Lugar (R-Ind.), chairman of the Foreign Relations Committee, has called on the White House to pressure Nicaragua with economic sanctions. A spokesman said Lugar discussed the trade option with Shultz last week.


Shultz said today that economic sanctions against Nicaragua would be part of “our effort to bring them to see the importance of getting on with the job of national reconciliation and the emergence of democracy in that country, as they have promised.”

In 1984, the United States imported $57 million in goods from Nicaragua, compared to $211 million, mostly for bananas, in 1980.

In 1984 the United States sold Nicaragua $112 million in goods--down from $249 million in 1980. This trade was chiefly insecticides.

The Administration in 1983 started cutting back quotas in sugar imports from Nicaragua and last year those were down to $2 million.