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SOVIETS FACING PENALTIES BUSH TO WITHHOLD TRADE CONCESSIONS
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SOVIETS FACING PENALTIES BUSH TO WITHHOLD TRADE CONCESSIONS

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President Bush is ready to announce a series of economic penalties against the Soviet Union in response to Moscow's crackdown on Lithuania, U.S. officials said Monday.

Bush was expected to outline his strategy at a meeting today with congressional leaders, said officials who spoke on the condition of anonymity.Among the steps will be postponement and withholding of a variety of trade and economic concessions that the Soviet Union is seeking from the United States, the officials said.

However, the administration's measures are not intended to interfere with U.S.-Soviet arms negotiations or to postpone the May 30-June 3 superpower summit, the officials said.

Although exact details of the administration's package were not clear, the general thrust will be to slow down U.S.-Soviet trade liberalization talks, which had been scheduled to resume today in Paris, the officials said.

Among the actions expected to be announced by Bush today are a withdrawal of his earlier support for Moscow's bid for observer status in the General Agreement on Tariffs and Trade, the international organization that oversees free-market trading rules.

Although such an approach would be a measured one, the sanctions could help mute criticism in Congress that the Bush administration wasn't doing enough to respond to the Soviet's tightening crackdown in Lithuania.

Moscow last week sharply curtailed oil and natural gas supplies to the secessionist state.

Earlier Monday, the White House welcomed what it called signs of flexibility from Moscow in its standoff with Lithuania. And officials said that the president remained hopeful that the crisis still could be resolved through negotiations between Moscow and the rebellious Baltic republic.

Bush earlier had proposed a variety of U.S. help to the ailing Soviet economy - ranging from technical assistance to an easing of legal restrictions on U.S.-Soviet trade - that are now expected to be put on hold.

Bush, answering reporters who asked if he might call off the trade talks in response to the Soviet economic crackdown, said: ``I'll sure let you know when I make a decision.'

Secretary of State James A. Baker III cautioned last week that economic relations ``are being put to risk by Soviet actions in Lithuania.'

Before the officials disclosed Bush's course, Baker said consultations with West European governments on a course of action ``will be completed very soon.' He denied reports the administration was taking its time in the hopes a solution would emerge, saying, ``We are not dragging our feet.'

The Soviet constitution guarantees the right of secession in principle, but the Soviet Union has never passed implementing legislation. Gorbachev and other Soviet leaders have acknowledged that the 1940 annexation was illegal.

Lithuania and its sister Baltic republics of Estonia and Latvia had belonged to the Russian czars for 200 years when, in the turmoil that followed the Communist Revolution of 1917, they established themselves as independent countries recognized by the Soviet Union in 1920.

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