Prime Minister Margaret Thatcher will meet with President Reagan in Washington Wednesday amid indications that the two allies disagree on what steps should be taken next to resolve the Falkland Islands crisis.
Thatcher will stop in Washington on her way home from addressing the United Nations disarmament conference for what Downing Street sources said would be "a continuation" of her talks with the president on the Falklands. The session, which was arranged after Thatcher received an invitation from Reagan, will be the first between the two since the Argentine garrison surrendered to the British in the Falklands' capital of Stanley last week.
In Luxembourg, meanwhile, Britain's partners in the European Community today agreed "for the time being" to continue their ban on arms shipments to Argentina. The Common Market countries yesterday lifted curbs on other trade with Buenos Aires.
The official Telam news agency reported Monday night in Buenos Aires, however, that Argentina will continue its reciprocal ban on Western European imports, Reuter reported.
During her meeting with Reagan, Thatcher will "tell the president how well Britain has treated the Argentine POWs, what steps we are taking to offer the islanders more self-government and why we won't negotiate sovereignty," said one official.
It is on this crucial last point that Reagan and Thatcher apparently do not agree. Britain's position is that Argentina must agree to a full cessation of hostilities in the South Atlantic for the conflict to be finally resolved and all prisoners to be returned. But the British government will not consider reopening talks with Argentina on the islands' future for some time.
Despite the surrender of its forces at Stanley, Argentina has not declared an end to the war or an end to its claim on the territory.
The United States, which supported Britain in the fighting, is eager to begin healing its relations with Latin America by urging what National Security Adviser William Clark today called the "reconciliation that must occur" between Britain and Argentina.
Sources here said they expected that Reagan would look for possible flexibility in Thatcher's views that would permit some form of international effort to resolve the long-term issue of the islands' sovereignty.
Thatcher will go to Washington as she and her party are riding high following the triumph in the Falklands. This short war, thousands of miles from home, has helped millions of Britons shake off the debilitating sense that their country is in steep decline.
The Economist magazine said last weekend that the principal benefit from the victory has been "restoration of the idea that Britain can do things well."
Much of what has been said and written about Britain in recent years has emphasized decline: the end of the empire, the weakening of the economy, the faltering of civility.
So it has come as a welcome diversion to the British--a break, as Peter Jenkins in the Guardian put it, in "the dreary routine of party politics and economic difficulties"--to learn that their country can still wage and win a war.
What is emerging here is a feeling that Thatcher has earned an extraordinary opportunity to press her programs.
The important issue, all agree, is the economy. The primary cause of Britain's long-standing sense that it has seen its best days is its decline as a great industrial power.
Britain has 3 million unemployed, a figure that rivals the worst numbers of the great Depression. Reducing that figure is Thatcher's biggest challenge. What the prime minister and her advisers hope, political analysts say, is that certain positive signs in the economy might be bolstered by the Falklands' fillip to national pride.
"Achievement in one area breeds confidence in another," the chancellor of the Exchequer, Sir Geoffrey Howe, declared recently. Inflation has dropped to about 9.5 percent, and recent wage settlements hold the promise of a further easing of price increases. Productivity has also turned upward slightly.
But there is little doubt that the economic struggle is a long way from being over. Several major strikes are possible in the next few weeks, including a national railroad strike. Thirty thousand health workers in Wales struck last Wednesday.
The Associated Press also reported:
Foreign ministers representing Britain's partners in the Common Market warned Argentina that the trade ban lifted Sunday would be reimposed if hostilities broke out again. The Common Market nations had blocked imports since April 17 to pressure Argentina to withdraw from the Falklands.
British Foreign Secretary Francis Pym had asked the Europeans to maintain the import ban until Argentina formally declared an end to hostilities. He agreed, however, to the end of the ban when the others said they would be willing to reimpose it if fighting broke out again.
Britain also announced that its troops had completed a mission to retake the South Sandwich Islands, a victory that completes Britain's recapture of its island colonies.
A British Defense Ministry statement said troops captured 10 Argentine naval personnel and one airman on remote Thule Island, 1,200 miles southeast of the Falklands, near Antarctica. It said there were no Argentine civilians on the island.