NEWS ANALYSIS : ‘Good Cop’ Bush Crafts Trade Pact : Economic ties: He refuses to link Lithuania and most-favored status for Soviets. Now Congress can play ‘bad cop.’

President Bush, by retreating from the idea that trade relations with the Soviet Union should be closely linked to Moscow’s actions in Lithuania, risked a quarrel with Congress but avoided setting a potentially dangerous precedent: tying future U.S. policies to the tortuous struggle that lies ahead between the Kremlin and its 15 restive republics.

For weeks, Bush aides had warned that the Kremlin’s economic embargo of Lithuania, imposed to force the Baltic republic to suspend its declaration of independence, “shadowed . . . our entire economic relationship,” in the words of one official.

But on Friday, Bush went ahead and signed a trade agreement with Soviet President Mikhail S. Gorbachev, without any apparent assurances that the embargo would be lifted. And on Sunday, Bush said that--as far as his official policy is concerned, at least--the only obstacle standing in the way of most-favored-nation trade status for the Soviet Union is not Lithuania, but the completion of a Soviet law to permit free emigration.

“The linkage is (with) the emigration, and that’s it,” Bush said at his joint news conference with Gorbachev.

Michael Mandelbaum, a Soviet expert at the Council on Foreign Relations in New York, praised Bush for “de-linking” Lithuania and the trade agreement.

“He’s dodged a bullet on that one,” Mandelbaum said. “The issue had the potential to become a huge policy nightmare. If you link trade policy or some other policy to what happens in the Soviet Union on the nationalities issue, you’ve made your policy hostage to a long and bloody struggle.”

If Bush had formally linked the trade agreement to Lithuania’s independence, Mandelbaum explained, he would have set a precedent that would have demanded similar action whenever Moscow came into conflict with any of its 15 republics--a number of which are already talking of independence.

The President insisted that his action did not signal any lessening of U.S. concern over continued Soviet rule in the three Baltic states, which have demanded independence. But he said that the issue will remain “one of the thorns in the side of an overall relationship”--not a specific obstacle to trade.

At the same time, Secretary of State James A. Baker III reminded reporters that, as long as the Lithuanian impasse persists, Congress is still unlikely to grant Moscow the next, more important step on trade: most-favored-nation status. “This trade agreement has no effect whatsoever until it is approved by the Congress,” Baker said.

As far as the question of Lithuania is concerned, Bush and his aides were enjoying a chance to have the issue both ways.

In dealing with Gorbachev, his new partner in world affairs, the President could point out that he is taking some short-term political heat in signing a trade agreement that the Soviet leader desperately wanted. Yet Bush could rely on Congress to stand firm against any further movement on trade until there is progress on the Baltic issue.

“It’s good cop, bad cop,” explained Sen. Alfonse M. D’Amato (R-N.Y.), author of a Senate resolution demanding an end to the Soviet embargo. Bush has the luxury of playing the diplomatic good cop; Congress is only too happy to play the scowling bad cop.

The President’s men are also trying to avoid trampling on Gorbachev’s dignity over an issue that has become a very public test of the Soviet president’s ability to lead a disintegrating nation. White House Chief of Staff John H. Sununu, who was once considered a hard-line conservative, argued on Sunday that Bush’s new semi-soft line is the best way to give Gorbachev room to grant independence to the Baltics.

The decision to avoid linking Lithuania and the trade agreement “is a very important one in order to get any movement at all that assures, over a reasonable period of time, (that) there will be freedom for Lithuania,” Sununu said on ABC-TV’s “This Week with David Brinkley.”

Indeed, in his private talks with Bush, Gorbachev assured the President that he believes he can get peaceful negotiations started with Lithuania within the next few weeks. The two presidents reached an “understanding” over the issue, a White House official said.

Even Lithuania’s president, Vytautas Landsbergis, stopped short of criticizing Bush for signing the trade agreement.

“We are not as concerned with the treaty as we are with the stance the United States is taking toward the (economic) sanctions,” Landsbergis said on NBC-TV’s “Sunday Today.” “If Gorbachev gets the opinion that he is able to continue these sanctions, that will be a bad thing.”

But Baltic-American leaders still declared themselves upset. “I thought President Bush would stand up for our rights,” said John Jekabsons, a Latvian-American who is an official of the Baltic Alliance in Oakland. “Now we have to look to Congress to make the point on trade.”