Wrong signal on Chile

It was to protest international terrorism -- the assassination of a Chilean former diplomat on US soil -- that the United States imposed sanctions on Chile. The lifting of two sanctions last week seems strikingly out of keeping with Secretary of State Haig's earlier declaration giving highest priority to the fight against terrorism. It can only be hoped that, by using a carrot instead of a stick, the US will encourage a decrease in the widely noted human rights violations by the Chilean regime of President Augusto Pinochet Ugarte -- and perhaps even spur progress on the terrorist case that brought the sanctions.

The State Department ended the prohibition on Export-Import Bank financing for US- manufactured products sold in Chile and invited Chile to participate in the North and South American naval exercises from which it had been excluded. Such sanctions -- rather than the diplomatic break urged by some human rights advocates -- had been the Carter administration's gesture against Chile's resistance in the assassination case. Chile refused to extradite three former secret police officers to stand trial for the murder and, in Washington's estimation, failed to conduct an adequate investigation of the terrorism on its own.

By canceling the sanctions the Reagan administration says it seeks to further US ties with Chile for commercial and security purposes. One of the US attorneys on the case, however, complains that the action "could be viewed as rewarding Chile for its continued intransigence. . . ." Chile might be advised that, if the new carrot is ignored, many in the US will be as king for a return to the stick.