IF -- IN ADDITION to India and Pakistan -- any further evidence were needed of how easy it is to heat up a nuclear competition between two neighbors, Brazil and Argentina would provide it.

A few years ago, West Germany signed a contract with Brazil for the export of eight nuclear reactors, an enrichment plant and a reprocessing plant. The latter two facilities provide direct access to materials that can be used for weapons, and are now deemed unsuitable for export by informal agreement among the nuclear supplier nations. But, though the plants have not yet been delivered, the Brazilian contract was signed before that agreement. In the interim, Brazil's nuclear program has been scaled way back: both the enrichment and reprocessing plants may be reduced to pilot plants, and no more than three reactors are likely to be built. But the original contract has had its full effect on Brazil's neighbor.

Argentina, which has large deposits of uranium, now seems determined to complete its own, indigenous nuclear fuel cycle. To do this, Argentina uses a type of reactor that runs on natural, unenriched uranium and requires a material known as heavy water. Such reactors can produce large amounts of plutonium, but to be completely independent Argentina needs a plant to produce the heavy water.

Some years ago, Argentina announced that it was looking for bids on a package deal: a reactor and the heavy water plant. Both Canada and West Germany were eager for the business. The key element was the extent of non-proliferation safeguards that each supplier would require. Canada wanted to insist on the full safeguards required under the Non-Proliferation Treaty -- covering all nuclear facilities, present and future -- and wanted Germany to adopt the same standards so that the contract would not simply go to the bidder with the looser non-proliferation standards.

After extensive talks it seemed that an agreement had been reached: non-proliferation interests would not be sacrificed to commercial ones. Then, suddenly, it was announced that the deal would split between Switzerland, which can build only the heavy water plant, and West Germany -- with neither supplier insisting on full safeguards.

The Swiss Say that if the powerful United States could not persuade Argentina to accept such safeguards, how could they -- a small, weak nation -- be expected to? The Germans argue that since the heavy water plant is clearly the more sensitive part of the contract, and the Swiss are not requiring full safeguards, why should they? The Canadians are reported to believe that Germany arranged a deal with the Swiss.

What makes these developments especially alarming is that neither Brazil nor Argentina is a party to the Non-Proliferation Treaty, and neither has signed the Treaty of Tlatelolco, which would make Latin America a nuclear-weapons-free zone. The two nations have an intensely competitive relationship, and it is hard to believe that advances in one nation's nuclear program will not spur a matching response in the other's. If the United States cannot persuade the South American importing countries to back off, it should bring pressure -- vastly more pressure -- on the countries selling the plants to make proper safeguards a condition of the deal.