NEWS ANALYSIS : New U.S. Policy on Contras Told : Marks 1st Clear Break With Reagan Legacy

Friday’s bipartisan agreement on U.S. policy toward Nicaragua marks President Bush’s first clear break with the foreign policy legacy of President Ronald Reagan, who made military aid to the Nicaraguan rebels his most fervent cause.

For eight years, Reagan campaigned for the Contras, calling them “freedom fighters” battling a communist regime whose expansion threatened Mexico and even southern Texas. It was an issue, he said, of “right versus wrong.”

Now, that polarizing rhetoric is gone. “We all have to admit that the policy basically failed,” Secretary of State James A. Baker III said matter-of-factly Friday from the same White House podium where Reagan once appeared.

In public, President Bush and his advisers maintain that they are pursuing the same objectives as Reagan: democracy in Nicaragua, a halt to Managua’s support for insurgents in neighboring El Salvador and an end to Soviet aid to the Sandinista government of Nicaragua.

But off-camera, they acknowledge that political realities have forced them to scale back from Reagan’s objectives--and to pursue a diplomatic accommodation with a regime that Reagan sought ardently to overthrow.

“We talked about diplomacy (during the Reagan Administration), but it began as a cover story for what we were really trying to do,” one senior official said. “What has happened since then is that the cover story has become real.”

Another senior official, asked about conservatives’ fears that the new policy is merely an elegant way to abandon the Contras, responded sharply: “As compared to what? That’s what you really come back to. We don’t have an unlimited menu of options to choose from.” The chance of winning renewed military aid for the Contras, he said, “is zero.”

Under Pressure to Act

Moreover, he noted, with the governments of Central America beginning to press for the disbanding of the Contras, the Administration felt under pressure to act quickly.

“This does, if it works, accomplish our objectives,” he added.

And will it work?

“I don’t know,” he acknowledged.

The new U.S. policy still has a hard edge--at least potentially. Bush committed the United States to “a concerted diplomatic effort” to bring peace to Central America, but he also held to the importance of maintaining the 12,000-troop Contra army in reserve--”to keep some kind of leverage on the Sandinistas to carry out their part of the bargain,” a senior aide said.

Limited Leverage

But most officials acknowledge that the Contras’ ability to exert real leverage on the Nicaraguan government--isolated in bases in Honduras, prohibited from launching offensive military operations and politically ineffective--is limited at best.

Moreover, a senior official admitted, the United States--which has maintained a trade embargo against Nicaragua since 1985--has few if any unilateral actions available to take against the Sandinistas. “I can’t say that we contemplate any right now,” he said.

Instead, the U.S. policy on Nicaragua has shifted to a more traditional carrot-and-stick approach: applying economic pressure and lobbying other countries to cut their aid to the Sandinistas, while dangling the possibility, if all goes well, of holding bilateral peace talks and, eventually, giving U.S. aid.

“If you look at these individually, they may not look like much,” a State Department official said. “But together . . . they can produce pressure.”

The next step, officials said, is for the Administration to get into the thick of the diplomatic process already under way in Central America. U.S. diplomats have begun explaining the new policy to other governments in Latin America and seeking their support.

U.N. Role Encouraged

And Baker has encouraged U.N. Secretary General Javier Perez de Cuellar to monitor Nicaragua’s progress toward internal democracy “without legitimizing the existing situation,” an aide said.

A new effort soon will begin to try to persuade Western European countries, which now provide vital economic aid to Nicaragua, to cut back their help unless the Sandinistas enact internal reforms, officials said.

And next month, a senior official said, the Administration will renew its talks with the Soviet Union aimed at persuading President Mikhail S. Gorbachev to cut back his aid to Nicaragua if he wants an improved relationship with Bush.

“What we’re linking it to is the tone of the relationship,” the official said. The Soviets “have been making all these phrases about improved relationships. . . . Here’s their chance, in an area where they have no legitimate interests, to demonstrate that they’re serious about it.”

When Baker met with Soviet Foreign Minister Eduard A. Shevardnadze in Vienna on March 7, the Soviets offered “no movement at all” on Central America, an official said. But the Administration hopes to convince Gorbachev that a cutback in aid to Nicaragua would be “a serious gesture . . . to improve the relationship.”

Pitfalls Down the Road

Even if the Sandinistas and the Soviets change their behavior, some potential pitfalls lie down the road, officials said. Many of the Contras may resist the idea of disarming and disbanding, which the Administration has insisted would be strictly voluntary.

And there is no clear agreement between the Administration and Congress on what criteria should be used to judge the Sandinistas’ progress, or lack of progress, toward democracy. That could lead to dissension over whether the Sandinistas have complied with U.S. demands.

Instead, the Administration is gambling that the hard-won consensus in Washington will hold until Nicaragua’s national election in late February, 1990--and that, when that vote rolls around, most Americans will know a fair election when they see one.

“I can’t say that there is a specific agreement that if they do this, this and this, it’s OK, and that if they don’t do that, it isn’t,” a senior official said. “But free and fair elections are what it’s all about.”

Times staff writer Don Shannon contributed to this article.