President's faltering Caribbean initiative

One of the Reagan administration's major foreign policy programs - the Caribbean Basin initiative - faces a highly uncertain future. And ironically, the CBI may suffer a significant setback this week at the President's own hand.

After considerable pulling and hauling through Congress, the administration succeeded in getting the $350 million in emergency aid to the Caribbean region included in a $14 billion 1982 supplemental appropriations bill. But there are so many other parts of the bill that the White House finds obnoxious, that many top advisers are urging the President to veto it.

The other nonmoney parts of a program that Mr. Reagan has called ''vital to the security interests of this nation and this hemisphere'' could be in even more trouble. These are trade and tax measures favorable to the Caribbean region , but opposed by organized labor and certain affected industries.

Foreign aid is not a favorite subject on Capitol Hill, and the Caribbean Basin initiative seems to have three strikes against it. It comes at a time when many favored domestic programs continue to be cut. It comes during an election year. And it has very little popular support. And the largest recipient under the Reagan plan is El Salvador, a country whose right-wing government and less-than-admirable human-rights record has few admirers outside the administration.

The supplemental appropriations bill en route to the President this week continues to have $2 billion less for defense and about $1 billion more for social programs (including aid to the elderly and handicapped, student loans, and highway funds) than the administration had requested.

''He really hasn't decided,'' said one government official. ''But the nonofficial word I'm getting is that he's being advised by (Burget Director David A.) Stockman and (Defense Secretary Caspar W.) Weinberger to veto it.''

Even if the President signs this special spending bill, however, the Caribbean Basin initiative is likely to emerge in a form noticeably different from the one he originally proposed in a speech before the Organization of American States last February.

With warnings about Soviet- and Cuban-style communism being exported to the region, the administration wanted to direct $128 million of the $350 million to El Salvador. Legislation working its way over Capitol Hill would limit aid to any single country to $80 million. El Salvador could get an extra $20 million to implement land reform, but all of its money would be conditional on such reform.

There is also a strong congressional effort to redirect much of this emergency aid away from economic support (designed to help banks and private businesses) and toward development programs such as agriculture, population control, and health.

As envisioned by the administration, the CBI is designed to give tax breaks to US companies investing in the region and eliminate trade duties on imports from designated Caribbean countries in the US for a period of 12 years.

The AFL-CIO and its friends in Congress say the tax breaks will take jobs away from Americans since US firms will be encouraged to move out of the country.

''They've been demanding changes and are likely to get some kind of accommodation,'' concedes a State Department official.

Lobbyists for certain US industries are seeking exemptions from the free-trade portions of the plan, and some (including manufacturers of leather and rubber goods) have succeeded in Congress.

The trade and tax portions of the Caribbean Basin initiative may well languish on Capitol Hill the rest of this year. In any case, says a congressional source, ''I really doubt that they'll be handling this before the election.''

The administration's planned emergency funding for the Caribbean doubled 1982 aid to the region to $700 million ($300 million more than was spent in 1981). For 1983, it is seeking $600 million ($250 million for development assistance and $350 for economic support).

But the mood on Capitol Hill and a possible presidential veto this year leave longer-range US plans for the Caribbean region in doubt.

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