U.S. Unveils New Nicaragua Policy : Baker Plan Would Lift Embargo, Ease Other Curbs in Return for Democracy

Times Staff Writer

Secretary of State James A. Baker III quietly unveiled a new policy initiative on Central America on Thursday, telling members of Congress that the Bush Administration will offer to lift the U.S. trade embargo and ease other sanctions against Nicaragua if the Sandinista regime moves toward democracy, officials said.

At the same time, Baker reaffirmed the Administration's intent to ask Congress for more non-military aid for Nicaragua's Contras as a means of keeping pressure on the Sandinistas, the officials said.

In private meetings with Republican congressional leaders and with House Speaker Jim Wright (D-Tex.), Baker outlined a new approach to the thorny issue of Nicaragua, shifting the focus of U.S. policy from support for the Contras--the cornerstone of President Ronald Reagan's policy--to a new reliance on diplomacy, officials familiar with the plan said.

U.S. Policy Shifted

Underlying the change, senior officials said, is a Bush Administration decision that the Contras cannot mount a significant military threat to the Sandinista regime and that the goal of U.S. policy has shifted from overthrowing the Sandinistas to merely "containing" them.

Beginning in 1981, the Reagan Administration built the Contras from a tiny band of rebels into an army of more than 15,000, with the aim of toppling the Sandinista regime by force. But Congress never endorsed that objective and repeatedly cut off the Contras' military aid, most recently in February, 1988.

After U.S. policy came to a standstill, the presidents of Central America's five nations produced their own peace plan, culminating in a Feb. 14 agreement setting a 90-day deadline to devise a timetable for disbanding the Contras as Nicaragua institutes democratic reforms.

Baker's new proposal--the Bush Administration's first major foreign policy initiative after six weeks in office--is an attempt to increase U.S. influence over that diplomatic process and to increase the pressure on Nicaragua to change its internal political system, officials said.

It also reflects increasing pressure on the Administration to define a policy toward Nicaragua after the Feb. 14 agreement.

Democratization the Focus

"The Administration has been consulting with Congress to build a bipartisan basis for a policy, which would be based on a strategy of giving diplomacy a chance," State Department spokesman Charles Redman said. "The focus of the policy will be democratization."

"What happened on the peace agreement was that all of the necessary hedging and qualifications weren't put in," a senior Administration official said. "What we're working on is a strategy which will take the agreement and . . . (put) teeth in the commitment of the Nicaraguans, and make the eventual disposition of the Contras contingent on democratization."

The initial response from Congress on Thursday was guarded but largely positive, reflecting a mood of exhaustion over the issue of Nicaragua among Republicans and Democrats. "There were questions raised, but no major objections," a Republican aide said. "From a conservative standpoint, we're not talking about a best-case scenario for the Contras any more; we're just talking about a reasonable case."

The most controversial part of Baker's plan is likely to be his call for renewed non-military aid for the Contras, who are camped in Honduras, just north of the Nicaraguan border.

A senior Administration official said Bush plans to ask Congress in April for a 12-month commitment to new aid, with the amount of the request still under debate. Last year, Congress approved $27 million for the rebels for the six months ending March 31, and officials said enough of that money remains to support the Contras at least through April.

Keeping Contras in Reserve

Baker hopes to persuade Democrats in Congress that he wants to keep supporting the Contras to pressure the Sandinistas toward complying with U.S. and Central American demands for democratization--not merely to allow the rebels to resume fighting.

"We need to keep the Contras alive as a threat to the Sandinistas, so that if the peace process breaks down they can look up on the border and see that the war might start again," an Administration official said. "But we also need to make it explicit that the United States will support the demobilization of the Contras if the process works."

An aide to a key Democratic senator said at least some liberal Democrats are prepared to support Baker's approach. "We need to give the Administration a chance to get out of (Nicaragua), and if humanitarian aid to the Contras is the price of that, we'll pay it," he said.

Congressional sources and Administration officials said that Baker's new proposal includes a set of specific benchmarks for measuring Nicaragua's movement toward democracy, including freedom of the press, freedom of assembly and guarantees of fairness in the country's elections, scheduled for February, 1990.

In return, one official said, "there's a schedule of carrots and sticks"--incentives for movement toward democracy--and threatened sanctions if the Sandinistas do not liberalize their political system. "The carrots range from simply rhetorical gestures on our part to lifting the trade embargo," he said. "And the sticks range from rhetorical statements to the possibility--at least implicitly--of going back (to Congress) for military aid."

But several officials noted that the Sandinistas "would have to go a very long way" before the United States lifted its economic sanctions entirely. The sanctions include the trade embargo, imposed by the Reagan Administration in 1985, as well as a U.S. policy of opposing loans to Nicaragua by international financial institutions.

A senior U.S. official said of the Contras: "We'll be talking with them."

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