The Reagan administration relaxed restrictions on trade with South Africa yesterday, opening the door for sales by American companies of nonmilitary goods to that country's military and police forces, congressional and State Department sources said.
In another trade-related move that has a background of controversy, the administration also acted to remove Iraq from the list of countries formally regarded as supporters of international terrorism, and it moved to add Cuba.
The 1979 Export Administration Act requires that Congress be notified when sales of equipment with a potential military use are proposed for countries on the list--a requirement that in the past has resulted in congressional moves to block some sales of this type.
The action on South Africa represents a reversal of a four-year-old policy established by the Carter administration that blocked sales of even nonmilitary goods to the South African government.
The policy shifts on South Africa and Iraq emerged in a set of revised export-control regulations issued by the Commerce Department with the concurrence of the State Department. They were submitted in a letter to the speaker of the House of Representatives yesterday and are to take effect March 1.
Although the shift ostensibly involves only nonmilitary equipment, it does open up the possibility of U.S. sales to South Africa and Iraq of items that could have both military and nonmilitary use.
In the case of South Africa, "personal computers," calculators and personal communication equipment are on the list of items no longer embargoed. Chemicals and industrial equipment could also be sold if they are of "no national security concern," according to the regulations.
A State Department official said last night that the new regulations are not intended to open the way for the sale of equipment that might be used for military purposes or to reinforce the practice of apartheid, or separation of the races. The official, who declined to be identified, said the department would make "a case-by-case review" of all sales and would prohibit any sale that could be used "to enforce apartheid."
"It's a shift in liberalizing the controls," Bohdan Denysyk, deputy assistant commerce secretary for export administration, told The Associated Press. But he said that the action should not be taken to mean the administration is condoning racial segregation, or the apartheid policy practiced by South Africa. "Apartheid is repugnant to us," he said. "We are taking small steps toward them; they should be taking small steps toward us."
Critics of the move asserted that it symbolized an administration plan to move closer to the South African government at the risk of further alienating black Africans. In addition, they said, it opened up a questionable gap in the sales embargo that might permit computers with military uses and even ambulance aircraft to be sold to the military and the police.
"It's a very tragic foreign policy mistake," said Rep. Howard Wolpe (D-Mich.), chairman of the African affairs subcommittee that has held hearings on proposed revision of the rules. "It will be taken by the Afrikaners in the South African regime as a further sign that they can continue to reinforce the repression that has been escalating recently.
"It will also be taken throughout the African continent as further evidence of abandonment and betrayal of what this nation has historically stood for," he added.
The United States forbids the sale of any military equipment to that country as part of a United Nations embargo. In l978, the Carter administration went beyond that embargo by issuing regulations that prohibited the sale of even nonmilitary equipment to the military and police forces there. It is that restriction that has now been lifted, to the extent that a number of nonmilitary items can be sold.
The terrorism list, originally prepared by the Carter administration in 1979, included, in addition to Iraq, Libya, Syria and South Yemen. Those three countries remain on the revised list issued by Commerce yesterday.
There was no practical significance to adding Cuba, since the United States has a ban on trade with that country. However, the dropping of Iraq was expected to draw considerable protest from members of Congress who regard the Baghdad government as an active abettor of terrorism as well as a sworn enemy of Israel.
Sen. Rudy Boschwitz (R-Minn.), chairman of the Mideast subcommittee, said the removal was "done without proper consultations" and "could be misinterpreted as taking sides in the Iran-Iraq war by opening the door to sales of militarily useful equipment such as air transports and heavy duty trucks."
Two years ago, the State Department provoked a major controversy in Congress when it approved the sale of eight U.S.-built gas turbine engines meant to power four Iraqi warships built in Italy. Two of the turbines were sent for inclusion in the ships, but the other six were cancelled after the outbreak of the Iranian-Iraqi war.
In removing Iraq from the list, Commerce gave no reason other than to note that the secretary of state has determined that Iraq's record has improved in terms of support for terrorist organizations. It gave no details to support that determination.
Congressional sources said they had been told business interests had put pressure on the administration to permit sales of equipment like the L100, the civilian version of the C130 cargo plane, to the Iraqis.