Contrary to conventional wisdom, the planned increase in the U.S. military presence in Central America has narrowed rather than widened the gap between Mexican and U.S. policies toward the region.

Mexico finally appears willing to take the security concerns of the United States more seriously. As a result, the Contadora group, in which Mexico is a key player, is better able to facilitate a negotiated settlement in Central America. Its ability to do so, however, also depends on the Reagan administration's willingness to take more seriously some of Mexico's objections to our policies in the region.

Mexico's approach to Central America has differed profoundly from ours. Mexico has been a consistent supporter of the Sandinistas in Nicaragua and has aligned itself in El Salvador with the revolutionaries, who include Marxist guerrillas, and against the U.S.-backed military. It has attributed the Sandinista victory and the Salvadoran guerrillas' successes principally to internal conditions such as poverty and political repression, while minimizing both the relevance of the East-West conflict to events in Central America and the Cuban role there. Consistent with its playing down of an East-West aspect, Mexico has advocated bilateral over regional negotiations and power-sharing in El Salvador instead of elections.

Critics of Mexico's policy have argued that at the very least it is hypocritical: while Mexico supports Marxist guerrillas abroad, it annihilates them at home. More serious, however, is the charge that Mexico is "playing with fire," since successful Marxist revolutions in Central America would put pressure on the Mexican political system to move quickly to the left. This would polarize Mexican politics and undermine the political consensus that is a prerequisite for continued political stability.

Until the recent decision by the United States to increase its military presence in Central America, however, Mexico's policy brought it substantial benefits and few costs. Identification with the revolutionaries enhanced Mexico's revolutionary image, thereby undercutting domestic criticism that the political heirs of the Mexican Revolution of 1910 had betrayed their legacy. It also positioned Mexico well should the Central American revolutionaries succeed, which many Mexicans believed was inevitable.

On the other hand, the costs to Mexico were considered low. Based on its experience with Cuba and Nicaragua, Mexico was confident of its ability to establish friendly relations with any revolutionary governments that might come to power in the region. If, however, these governments betrayed Mexico's trust and supported Marxist guerrillas within Mexico, it believed such guerrillas could be co-opted or destroyed, as had happened in the 1960s. Finally, if Mexico were truly in danger of becoming "the last domino," as the Reagan administration feared, the United States probably would come to Mexico's aid, much as it did during last summer's debt crisis.

If Mexico's alignment with revolutionaries entailed few costs and brought important benefits, identification with U.S. policies would have the opposite effect. Support for the policies of the country that had taken half of Mexico's territory and intervened repeatedly in Mexico's internal affairs would have mobilized nationalistic and anti-American sentiments across the political spectrum and fanned fears of dependency on the United States. It also would have damaged Mexico's relations with Cuba and Nicaragua, thereby giving them an incentive to support left-wing opposition groups within Mexico. The benefits that might have offset these costs, however, remained unclear as long as the United States seemed unwilling or unable to back its strong rhetoric with actions against Cuba or Nicaragua.

Plans by the United States to increase its military presence in Central America changed these cost-benefit calculations. Failure to take seriously U.S. security concerns could now lead to the overthrow of the Sandinistas, a regional war involving outside powers, or both. To avoid these outcomes, Mexico increased its support for regional negotiations and led more forceful calls by the Contadora group for a halt to the arms buildups and arms trafficking in Central America, for the withdrawal of military advisers and for an end to the use of one state's territory to conduct acts of aggression against another. References to U.S. intervention were increasingly balanced by mention of Cuban involvement. Recent Nicaraguan and Cuban endorsements of some of the Contadora principles further reduced the costs to Mexico of serving as an honest broker, within the Contadora framework, between Cuba and the United States.

Mexico must still seek ways, together with Venezuela, Colombia and Panama, of transforming the stated Contadora position into concrete proposals that are subject to mediation and verification. It is here that strong U.S. backing becomes crucial.

Expressions of U.S. support for the Contadora group's efforts are not credible as long as the United States is engaged in so-called covert activities aimed at overthrowing the Sandinistas. Such activities create special difficulties for Mexico by reviving historical memories of U.S. support of counterrevolutionary forces in the early days of the Mexican Revolution.

If a negotiated, comprehensive and--equally important--Latin American solution to the Central American crisis is truly desired by the Reagan administration, support for covert activities must stop.