Backing the British complicates US diplomacy in Latin America
Washington — US support for Britain in the Falklands dispute, now open and likely to grow, almost certainly will undercut President Reagan's cherished goals in Latin America and the Caribbean basin.
First of those goals is to prevent, or at least to limit, communist subversion in the Western Hemisphere, especially Central America.
To that end the Reagan administration for months has tried to enlist Latin governments in a campaign to counter leftist influence in Central America, with emphasis on El Salvador and Nicaragua.
With many South American countries moving, at least rhetorically, to Argentina's side in the Falklands crisis, and with the US backing Britain, it may be much harder for Washington to attract active Latin support for its anti-communist policies.
These policies, which had been at the forefront of Secretary of State Alexander M. Haig Jr.'s diplomacy before Argentina seized the Falkland Islands, now risk being undermined by Washington's support of Britain.
US officials had been counting on anti-communist Argentina to help build counter-insurgency forces to operate against the leftists in Central America.
This explains the flattering treatment which Argentine President Leopoldo Galtieri and other Argentine generals had received from the Reagan administration, before Galtieri's army occupied the Falklands a month ago.
Now Washington sides openly against Argentina and will give at least limited military assistance to Britain, a country which a number of Latin American peoples count as a former colonial ruler.
In this situation the natural tendency of Latin American democracies, including Mexico and Venezuela, to dislike military regimes like that of Galtieri is overlain by Latin solidarity, at least on the surface.
Few Latin nations want to jeopardize their trade, banking, and other economic relations with Britain, as evidenced by Argentina's recent failure to muster sanctions support against London.
But Latin governments, experts agree, now will be much less eager to line up visibly with the United States on policies shaped in Washington.
Venezuela, for example - which generally backed US initiatives in El Salvador and the Caribbean basin - is one of Argentina's most vocal supporters in quarrel with Britain over the Falklands.
Venezuela has its own grievance against the British - a claim to large chunks of neighboring Guyana, which gained its independence from Britain in 1966.
Prospects now appear to be dim for any early dialogue between the US and the Sandinista regime in Nicaragua, a dialogue which Mexico had been trying to arrange. The Mexicans, some analysts say, may hesitate to advocate negotiations with the US policies when Washington is actively aiding Argentina's opponent.
Less easy to assess is the impact of Falklands developments on President Reagan's Caribbean basin plan, designed to muster hemispheric economic and development aid for poverty-stricken ministates of the region.
Increasingly heard behind the scenes in Washington is the view that a change of government in Buenos Aires may hold the key to a negotiated settlement.
Such a change, prompted by the military hierarchy, could result from either one or both of two factors, experts say - a military defeat for Argentina, or a downward spiral of the already-distressed Argentine economy.
Deeply in debt to Western banks, Argentina needs continued access to credit markets to roll over debts as they fall due. The Argentines owe more than $9 billion to US banks alone, plus $3 billion to British banks.
Credit for Argentina is drying up, partly because of Common Market sanctions, partly because bankers are awaiting the outcome of events.
The Reagan administration, in the most meaningful of its sanctions against Argentina to date, is blocking further credits and loan guarantees from the Export-Import Bank. Such credits help to finance American exports to Argentina.