Continue Hard Line on Soviets, Reagan Urged

An annual national security report issued today recommended sticking to a tough American policy of excluding the Soviet Union from major international financial and trade institutions.

“While we note recent policy statements regarding ‘reconstruction’ and economic reform, the Soviet economic system remains at this point fundamentally incompatible with participation in Free World institutions,” said the report by the National Security Council staff to President Reagan.

“Policy statements must be translated into positive actions before such participation can be considered,” it said.

Since Soviet leader Mikhail S. Gorbachev came to power nearly three years ago, Moscow has shown interest in joining the International Monetary Fund and the General Agreement on Tariffs and Trade.

Gorbachev has made perestroika, or restructuring the economy to make it more efficient, and glasnost, or openness, the central aims of his rule.

But Washington has opposed any suggestion that the Soviet Union be allowed into international economic bodies, and the report showed no change in the U.S. attitude.