Shultz Says U.S. Won’t Cut and Run in South Africa : Opposes Severing of Trade Ties

Secretary of State George P. Shultz said today that Americans should stay and build--not cut and run--as the best way to prod South Africa into ending apartheid.

In what was clearly a Reagan Administration policy statement, Shultz told a group of religious leaders that “we seek the end of racism, apartheid and oppression,” but “not to inflict random damage” on blacks, whites and South Africa’s economy.

He said the United States prefers “carefully targeted signals,” not a severing of all American business ties with the white-minority regime.

Shultz said advocates of divestment--cutting all U.S. economic ties to South Africa--”have failed to make a convincing case.” He said the approach could send the country into an irreversible economic tailspin.

“Once you lose the confidence of the investing community . . . if people feel there is no way to do sensible business there, getting it back is tremendously difficult,” Shultz told a clerical conference held under State Department auspices.

‘Negotiations Alone’

He said “negotiations alone offer the prospect of peaceful change” in South Africa but he was not clear whether the Administration favors talks between Pretoria and the African National Congress.

Nelson Mandela, the leader of the black anti-apartheid group, is in prison, and the South African government is shunning official contact with the ANC. But some white businessmen have held some tentative talks with Congress members.

“There are elements (in the ANC) that have, we know, engaged in terrorist acts,” Shultz said. But, he said “there are also others with different instincts.”

President Reagan, under pressure from Congress, last year imposed a limited range of economic sanctions on South Africa, including bans on U.S. computer exports to all agencies that enforce apartheid and a prohibition on loans except when used to improve social conditions for all races.

‘Influence . . . Is Finite’

Some private firms and universities, meanwhile, have begun a campaign to end all business operations and withdraw all investments from the country.

Shultz disagreed with the tactic. “Americans, by staying and building, not by cutting and running, can help build a freer society,” he said.

Shultz told the religious leaders, who appeared to favor a variety of strategies toward the Pretoria government, that “our influence in South Africa is finite.”

Shultz said U.S. firms account for less than 1% of business investments in South Africa and less than 15% of the country’s trade is with the United States.