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Argentina Seeks Trade Boost in Renewing British Ties

ARGENTINE President Carlos Sa'ul Menem announced last week he was normalizing diplomatic relations with London, nearly eight years after the Falklands war. Relations with Britain were not in themselves the goal, Mr. Menem said, so much as the key to open the doors of the European Economic Community to his economically stricken government. ``Our conflict with Great Britain had brought with it serious problems in the trade and aid field,'' he said.

Foreign Minister Domingo Cavallo recently predicted the EC will sign an accord with Argentina next April, providing preferential trade terms and new offers of economic aid similar to deals the Community has signed with other developing countries.

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Menem announced the results of the negotiations himself last Thursday, indicating the pride he took in the agreement. As one European diplomat says, this is ``his only policy success in seven months of government.''

But Argentines generally have not shared Menem's enthusiasm. Opinion polls show that most were in favor of normalizing relations with London, but few Argentines attach much importance to the issue apart from their anxiety over rampant inflation and sharp recession.

Government officials here stress that Buenos Aires has not abandoned its claim to ownership of the South Atlantic archipelago, but has put that claim ``under an umbrella,'' in Menem's phrase, while the two sides negotiate other differences.

That formula, unveiled as Menem took office last July, broke the deadlock over London's insistence that Falklands sovereignty was not negotiable. And progress in negotiations has been quick.

Argentina has lifted all restrictions imposed on British owned companies here, eased imports of British goods, and allowed British-registered ships to dock at her ports. Consular relations were restored in December, and direct flights from London to Buenos Aires, suspended in 1982, were resumed last month.

Last week's meeting in Madrid between Britain's UN ambassador, Sir Crispin Tickell, and top Argentine diplomat Lucio Garc'ia del Solar resolved the trickiest issue dividing the two countries - the 150 mile radius ``protection zone'' around the Falklands prohibiting Argentine military planes and boats.

Buenos Aires regarded this zone as an affront, and officials here hailed Britain's agreement to lift restrictions on Mar. 31 as a major diplomatic victory. But British negotiators point to the provision giving the commander of the British military forces in the Falklands the right to veto the presence of any Argentine boat within 50 miles of the coast, or any plane within 70 miles.

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Negotiating the thorny issue of fishing rights around the islands remains, and no settlement is in sight. Currently, Falklands authorities sell fishing permits for waters Argentina regards as part of its territory. ``The question of fishing is intimately linked to the question of sovereignty,'' Foreign Minister Cavallo says.

Meanwhile Buenos Aires would like to establish direct links with the Falklands. ``The rhythm of reestablishing links will depend on the islanders,'' Cavallo stressed. ``Argentina wants to be very respectful of the islanders' interests and will be patient in rebuilding confidence.''

Officials here acknowledge the need for patience. Through sale of fishing permits, the 2,000 Falkland islanders now enjoy the highest per capita gross national product in the world. Argentina, in almost permanent economic crisis, can do little to tempt islanders into union.

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