The Reagan administration, in what could be one of the strongest economic sanctions against the leftist government of Nicaragua to date, has been drawing plans to reduce dramatically the amount of sugar that U.S. firms purchase from the Central American nation, according to knowledgeable sources.
Such a cutback would represent a further deterioration of U.S.-Nicaraguan relations based on U.S. claims that the Nicaraguans have been supplying arms and assistance to leftist insurgents in El Salvador. As a covert countermeasure, U.S.-backed insurgents are waging guerrilla warfare inside Nicaragua against government forces.
A spokesman for the Nicaraguan Embassy said that the prospective sugar quota reduction would be an "economic attack" designed to "kill the Nicaraguan revolution."
The spokesman said that Nicaragua has received no official notification of the reported cutback, but, he added, cutback figures reported in press accounts would, if implemented, cost the Nicaraguan economy $15 million a year.
Under a formula, Nicaragua's quota was set last year at 2.1 percent of the total and that of Honduras was set at 1 percent. Advocates for reducing Nicaragua's quota point out that Honduras is a strong ally of the United States and deserves greater support under the quota system than Nicaragua, whose actions are hostile to U.S. interests.
The decision to draw up plans to cut back purchases from Nicaragua was initiated by the National Security Council with concurrence by the State Department, sources said. State Department spokesman Alan Romberg would not comment.
According to one trade official, plans to cut the quota of Nicaragua sugar purchases began two months ago and a formal announcement of a presidential decision is expected at any time.