Here is a partial text of President Reagan's prepared address yesterday to the National Association of Manufacturers:

The nations of Central America are among our nearest neighbors. El Salvador, for example, is nearer to Texas than Texas is to Massachusetts.

Central America is simply too close, and the strategic stakes are too high, for us to ignore the danger of governments seizing power there with ideological and military ties to the Soviet Union.

Let me tell you just how important Central America is.

At the base of Central America is the Panama Canal. Half of all the foreign trade of the United States passes through either the canal or other Caribbean sea lanes on its way to or from our ports.

To the north is Mexico, a country of enormous human and material potential, with which we share 1,800 miles of peaceful frontier.

Between Mexico and the canal lies Central America. As I speak to you today, its countries are in the midst of the gravest crisis in their history.

Accumulated grievances and social and economic change are challenging traditional ways. New leaders with new aspirations have emerged who want a new and better deal for their peoples. That is good.

The problem is that an aggressive minority has thrown in its lot with the communists, looking to the Soviets and their Cuban henchmen to help them pursue political change through violence. Nicaragua has become their base. These extremists make no secret of their goal. They preach the doctrine of a "revolution without frontiers." Their first target is El Salvador.

I know a good many people wonder why we should care about whether communist governments come into power in Nicaragua, El Salvador, or such other countries as Costa Rica, Honduras, Guatemala, and the islands of the Caribbean. One columnist argued last week that we shouldn't care because their products are not that vital to our economy.

That's like the argument of another so-called expert that we shouldn't worry about Castroite control over the island of Grenada--their only important product is nutmeg.

People who make these arguments haven't taken a good look at a map lately or followed the extraordinary buildup of Soviet and Cuban military power in the region or read the Soviets' discussions about why the region is important to them and how they intend to use it.

It is not nutmeg that is at stake in the Caribbean and Central America. It is the United States' national security.

Soviet military theorists want to destroy our capacity to resupply western Europe in case of an emergency. They want to tie down our attention and forces on our own southern border and so limit our capacity to act in more distant places such as Europe, the Persian Gulf, the Indian Ocean, the Sea of Japan.

Those Soviet theorists noticed what we failed to notice--that the Caribbean Sea and Central America constitute this nation's fourth border.

If we must defend ourselves against a large hostile military presence on our border, our freedom to act elsewhere, to help others, and to protect strategically vital sea lanes and resources has been drastically diminished.

For three years, our goal has been to support fundamental change in the region--to replace poverty with development, and dictatorship with democracy.

These objectives are not easy to attain, but we are on the right track. Costa Rica continues to set a democratic example, even in the midst of economic crisis and Nicaraguan intimidation. Honduras has gone from military rule to a freely elected civilian government. Despite incredible obstacles, the democratic center is holding in El Salvador, implementing land reform and working to replace the politics of death with the life of democracy.

So the good news is that our new policies have begun to work.

The bad news is that the struggle for democracy is still far from over.

How bad is the military situation? It is not good. Salvadoran soldiers have proved that when they are well-trained, led and supplied, they can protect the people from guerrilla attacks. But so far U.S. trainers have been able to train only one soldier in 10. There is a shortage of experienced officers; supplies are unsure. The guerrillas have taken advantage of these shortcomings. For the moment, at least, they have taken the tactical initiative just when the sharply limited funding Congress has so far approved is running out.

A second vital question is: Are we going to send American soldiers into combat? The answer is a flat no.

A third question: Are we going to Americanize the war with a lot of U.S. combat advisers? Again the answer is no. Only Salvadorans can fight this war, just as only Salvadorans can decide El Salvador's future.

What we can do is help to give them the skills and supplies they need to do the job for themselves. In military terms, that mostly means training. Without playing a combat role themselves, and without accompanying Salvadoran units into combat, American specialists can help the Salvadoran army improve its operations.

Over the last year, despite manifest needs for more training, we have scrupulously kept our training activities well below our self-imposed numerical limit on numbers of trainers. We are currently reviewing what we can do to provide the most effective training possible, to determine the minimum level of trainers needed, and where the training should best take place.

We think the best way is to provide training outside of El Salvador, in the U.S. or elsewhere, but that costs a lot more. So the number of U.S. trainers in El Salvador will depend upon the resources available.

Question four: Are we seeking a political or a military solution? Despite all I and others have said, some people still seem to think that our concern for security assistance means that all we care about is a military solution. That is nonsense. Bullets are no answer to economic inequities, social tensions, or political disagreements. Democracy is.

What we want is to enable Salvadorans to stop the killing and sabotage so that economic and political reforms can take root. The real solution can only be a political one. "It is not nutmeg that is at stake in the Caribbean and Central America. It is the United States' national security."

This reality leads directly to a fifth question: Why not stop the killing and start talking? Why not negotiate?

Well, negotiations are already a key part of our policy. We support negotiations among all the nations of the region to strengthen democracy, to halt subversion, to stop the flow of arms, to respect borders, and to remove all the foreign military advisers--the Soviets, Cubans, East Germans, PLO, as well as our own--from the region.

A regional peace initiative is now emerging. We have been in close touch with its sponsors, and wish it well. And we support negotiations within nations, aimed at expanding participation in democratic institutions--at getting all parties to participate in free, non-violent elections.

What we oppose are negotiations that would be used as a cynical device for dividing up power behind the people's back. We cannot support negotiations which, instead of expanding democracy, try to destroy it--negotiations which would distribute power among armed groups without the consent of the people of El Salvador.

We made that mistake some years ago in Laos when we pressed the Laotian government to form a partnership with the Pathet Lao--armed guerrillas who had been doing what the guerrillas are doing in El Salvador. They did not rest until they had seized total control of the government of Laos.

The thousands upon thousands of Salvadorans who risked their lives to vote last year should not have their ballots thrown into the trash heap this year by letting a tiny minority on the fringe of a wide and diverse political spectrum shoot its way into power.

No, the only legitimate road to power, the only road we can support, is through the voting booth, so that the people can choose for themselves--choose, as his holiness the pope said Sunday, "far from terror and in a climate of democratic conviviality." This is fundamental, and it is a moral as well as a practical belief that all free people of the Americas share.

Having consulted with the Congress, let me tell you where we are now and what we will be doing in the days ahead. We will be submitting a comprehensive, integrated economic and military assistance plan for Central America.

First, we will bridge the existing gap in military assistance. Our projections of the amount of military assistance needed for El Salvador have remained relatively stable over the past two years.

However, the continuing resolution budget procedure in the Congress last December led to a level of U.S. security assistance for El Salvador in 1983 below what we had requested, below that provided in 1982, and below that requested for 1984.

I am proposing that $60 million of the monies already appropriated for our worldwide military assistance programs be immediately reallocated to El Salvador. Further, to build the kind of disciplined, skilled army that can take and hold the initiative while respecting the rights of its people, I will be amending my supplemental, currently before the Congress, to reallocate $50 million to El Salvador.

These funds will be sought without increasing the overall amount of the supplemental we have already presented to Congress. And, as I have said, the focus of this assistance will remain the same: to train Salvadorans so that they can defend themselves. Because El Salvador's security problems are not unique in the region, I will also be asking for an additional $20 million for regional security assistance. These funds will be used to help neighboring states to maintain their national security, and will, of course, be subject to full congressional review.

Secondly, we will work hard to support reform, human rights, and democracy in El Salvador. Last Thursday, the Salvadoran government extended the land reform program which has already distributed 20 percent of all the arable land in the country and transformed more than 65,000 farm workers into farm owners. What they ask is our continued economic support while the reform is completed. We will provide it. With our support, we expect that the steady progress toward more equitable distribution of wealth and power in El Salvador will continue.

Third, we will, I repeat, continue to work for human rights. Progress in this area has been slow, sometimes disappointing. With our support, we expect the government of El Salvador to be able to move ahead in prosecuting the accused and in building a criminal justice system applicable to all and ultimately accountable to the elected representatives of the people.

Fourth, the El Salvador government proposes to solve its problems the only way they can be solved fairly--by having the people decide. President Magana has just announced nationwide elections this year, calling on all to participate--adversaries as well as friends.

We were proud to participate, along with representatives of other democratic nations, as observers in last March's Constituent Assembly elections.

We would be equally pleased to contribute again to any international effort, perhaps in conjunction with the OAS, to help the government ensure the broadest possible participation in the upcoming elections--with guarantees that all, including critics and adversaries, can be protected as they participate.

Finally, we must continue to help the people of El Salvador and the rest of Central America and the Caribbean to make economic progress. More than three-quarters of our assistance to this region has been economic.

Because of the importance of economic development to the region, I will ask the Congress for $65 million in new monies and the reprogramming of $103 million from already appropriated worldwide funds for a total of $168 million in increased economic assistance for Central America. And to make sure that this assistance is as productive as possible, I will continue to work with the Congress for the urgent enactment of the long-term opportunities for trade and free initiative contained in the Caribbean Basin initiative.

Our neighbors are risking life and limb to better their lives, to improve their lands, and to build democracy.

All they ask is our help and understanding as they face dangerous, armed enemies of liberty, and that our help be as sustained as their own commitment.

None of this will work if we tire or falter in our support.

I don't think that is what the American people want or what our traditions and faith require.

Our neighbors' struggle for a better future deserves our help, and we should be proud to offer it.