Reagan team breaks ice on Chile, saying 'What's the use of sanctions?'

Nothing better illustrates the changes in United States policy toward Latin America under Ronald Reagan than Washington's decision to lift economic and military sanctions against Chile.

This new move obviously will help US firms doing business here and could increase US exports to Chile. It also will help US efforts to strengthen hemisphere defenses by bringing Chile back into joint naval maneuvers.

But far more important is the impact the process will have in restoring friendship between the two nations -- a friendship that was seriously buffeted in the 1970s.

As seen here, the Reagan administration is bent on mending ties between the two longtime friends.

Chilean Foreign Minister Rene Rojas Galdames took particular note that the Reagan administration's action was taken unilaterally and not in response to a petition by Chile.

It is "a forward step," he said.

But Chileans are also aware that the US still is displeased with the Chilean government's response to the assassination in Washington of Orlando Letelier del Solar, a former Chilean ambassador to the US.

It was his killing in September 1976 that led eventually to the imposition of the economic and military sanctions. Us courts held that various high Chilean officials were ultimately responsible for his assassination and sought their extradition.

The government of Gen. Augusto Pinochet Ugarte refused the extradition. The Carter administration, which had also been highly critical of Chile's human-rights record, then imposed sanctions. It cut off Export-Import Bank credit for exports to Chile and denied Chile a role in naval manuevers in the South Atlantic and South Pacific.

And last September Washington reacted critically when General Pinochet's government held a plebiscite on a new constitution that extended his rule at least eight more years.

Now the Reagan administration has decided it is time to end the confrontation -- although the State Department stresses that the US is still not satisfied with Santiago's response in the Letelier case.

That issue is likely to continue to be a point of disagreement, but much less so than under President Carter. Moreover, Washington is convinced that it cannot nudge the Pinochet government any more on this issue.

As a US official in Washington said, "There is no likelihood of any further cooperation from Chile on the case, so why extend the agony? Chile knows that the US feels it was essentially uncooperative in the matter, but what is to be gained from further acrimony?

That view will not universally be accepted. But it represents the Reagan stamp on US Latin American policy.

The government in Santiago is not essentially antagonistic to the US, nor are the Chilean people. Chileans have long been the most pro-US population in the hemisphere. They showed it last weekend when bandleader Ray Coniff stole the show at the Vina del Mar song festival.

Calling Coniff back onstage time and again, 100,000 Chileans cheered wildly for the US musician. His performance, in which both Chilean and American songs were played, was televised into the wee hours.

Relations between Chile and the US first went into a tailspin in the 1970s -- first as a result of President Salvador Allende Gossen's attempts to nudge Chile along the road to socialism, and later under the military, who seized power from Dr. Allende in 1973.

The Nixon, Ford, and Carter administrations were critical of the human-rights stands of the Chilean government, but the Carter team was especially so.

And new tack by President Reagan is very pleasing to Chileans. El Mercurio, the leading newspaper here, saw the move as "a move in the direction of restoring our bilatera l relations in a correct and friendly manner."