MIKHAIL GORBACHEV has undertaken the most far-reaching revamping of the Soviet system in over half a century. While the Soviet Union remains a closed communist society, Gorbachev has challenged a whole series of ingrained practices and attitudes -- from strictly centralized economic management to a militarized version of foreign affairs -- which have been the basis for Soviet policy since Stalin's time. In foreign policy, he had introduced new concepts and flexibility into Soviet diplomacy.

Yet the West has not come to terms with these changes. Instead, it has generally adopted a "wait and see" attitude to the reforms. Whatever its wisdom a year ago, such a policy no longer provides a viable strategy.

Because the Soviet Union is a global power, Gorbachev's initiatives demand an active response by the United States and its Western allies. We should begin by welcoming and encouraging the reformist inclinations that Gorbachev has set in motion and actively engage the Soviet Union in an effort to resolve key points of tension.

A purely reactive Western approach to the new Soviet policy is not an acceptable option, we believe. The new course chosen by Gorbachev -- and Western responses to it -- will affect the ways in which the Soviet Union carries out its role as a superpower. A more subtle and flexible Soviet diplomacy will present new challenges to the unity of the West. Failure to respond actively would sacrifice the diplomatic initiative to the Soviets and squander a rare opportunity to build a new relationship between East and West.

The need for a more active American response to Gorbachev's reforms emerged as the most important conclusion of bipartisan task force that met over the past eight months to study Soviet new thinking and its impact on the West. Convened under the auspices of the Institute for East-West Security Studies in New York, the 40-member task force included former Reagan administration officials, leading sovietologists, journalists and business leaders from both parties.

So how should this country and its allies respond to the Gorbachev challenge? We believe there are important opportunities for new agreements on arms control and other security issues; on economic issues; on regional issues; and on human rights. These new opportunities exist because, on many issues, the Soviet Union is moving toward long-standing Western preferences.

Gorbachev's undertaking of the most far-reaching revamping of the Soviet system in over half a century is likely to lead to further moderation of the use of Soviet power. The Soviet leadership seems to recognize that serious economic and technological deficiencies jeopardize Moscow's international position, and that reversing these trends requires not only major economic modernization but also many new foreign-policy approaches. These changes, while only in their beginning stages, present opportunities and challenges which the West cannot ignore.

Consider the changes in Soviet policy under Gorbachev:

In arms control, Moscow has adopted NATO's "zero option" and agreed to dismantle all medium-range missiles. In addition, the Soviets have moved toward U.S. positions on verification, including on-site inspection. They have also raised the prospect of conventional-force reductions in central Europe that would cut Warsaw Pact forces more than NATO's. And the Soviets have accepted the principle of deep reductions in strategic weapons, including the heavy land-based missiles in which the Soviets have been dominant.

Behind these Soviet arms-control proposals lies a more fundamental change: There has been a reduction in the Soviet military's role and influence in the highest policy-making councils, and Gorbachev has made clear to the military that they have to accept spending restraints and greater openness in the dissemination of military information.

In trade policy, Gorbachev has emphasized joint ventures that could reduce Soviet autarky and expressed an interest in cooperating with such major international organizations as GATT. These policies are directly associated with his far-reaching reforms of the domestic economy. He has begun to decentralize operational responsibility for the economy, and he clearly intends to move toward more flexible, modern and efficient economic planning and management. The reform course that Gorbachev has chosen, by encouraging economic interests that have been underrepresented in Soviet policy-making, could affect the way the Soviet Union relates to the outside world.

In human rights and cultural policy, Gorbachev has displayed a degree of openness and toleration unthinkable just three years ago. In emigration, for example, he has sharply increased the numbers of Soviet Jews, Germans and other groups allowed to leave the country. While glasnost has a long way to go, it has clearly led to progress on human rights, which remains a major concern of the West.

In regional policy, Gorbachev hasn't yet made a significant effort to scale back existing Soviet global commitments. But he has given a lower priority to the military expansion of Soviet interests in the Third World than was the case with his predecessors. In the Middle East he has shifted the traditional military and ideological emphasis to one of diplomacy, shocking many Western observers in the process. Unlike his Sinophobic predecessors, Gorbachev also seems to understand that military power alone does not translate into greater political influence in Asia. Recent Soviet initiatives in this region include proposals for economic development efforts, protection of the environment and an all-Asian security conference.

How then should we respond to these changes, which have moved Soviet policies closer to some of America's important interests. Together with the prospects of a Soviet-American INF treaty and summit by the end of this year, they highlight the need for the U.S. to tackle a wide range of problems in East-West relations. We urge that the United States initially focus on five key issues:

Security Issues. The United States and its NATO allies should intensify talks with the Warsaw Pact aimed at reducing conventional forces and eliminating offensive forces, particularly those that could be used in a first strike. Given the geographical differences and existing force imbalances, new approaches must include asymmetrical reductions of forward-based armored units, which present the greatest threat of surprise attack.

Both sides need to move rapidly to conclude an agreement on deep cuts in strategic offensive nuclear forces. At the same time, both sides need to find ways to strengthen the ABM Treaty and to ensure that any research on strategic defensive systems is consistent with the preservation of the treaty.

The West should push for a rapid conclusion of the global Geneva chemical-weapons negotiations, including the establishment of an international verification regime. Such an agreement would help increase confidence in Europe at a time when many Europeans and some Americans are concerned over the implications of elimination of medium- and shorter-range nuclear missiles from the continent.

International Economic Issues. Except in a precisely defined area of strategic technologies -- where we need tighter, more efficient controls -- expanded East-West trade is in our interest. The West should welcome Soviet efforts to develop the legal foundation for a system of equitable joint ventures. While Western governments should not subsidize credits, neither should they oppose the extension of private credit through normal commercial rates and practices to the Soviet Union. The prospect of observer status in the GATT and IMF should be used to encourage greater openness and information about the Soviet economy. And if the human rights situation in the Soviet Union continues to improve, we would urge Congress to consider repealing the Jackson-Vanik and Stevenson amendments that now limit non-strategic trade with the Soviets.

Human Rights. The West should welcome increased glasnost while continuing to make clear to the Soviet government that its observance of internationally recognized human rights is the mark of a civilized power and a condition for truly collaborative relations between the Soviet Union and the West. The West should insist that the Soviet Union fully live up to the commitments it undertook when the Helsinki Final Act to encourage the free movement of people, ideas and information across international boundaries.

Regional Issues. In Afghanistan, the West must continue to make clear that Soviet occupation of that country poses strict limits to genuine collaboration between the USSR and the West. Conversely, a rapid Soviet withdrawal, with sufficient international guarantees, would be a forceful demonstration that the "new political thinking" has specific policy implications.

In other areas of conflict that could lead to possible superpower confrontation -- such as Central America, southern Africa and the Persian Gulf -- the West should intensify discussions aimed at clarifying interests and creating conditions for greater stability. Within this framework, Soviet-American meetings on regional issues should be upgraded and made part of a regular summit process. The purpose would be to seek solutions to these problems in conjunction with other concerned parties.

In the Arab-Israeli dispute, for example, the United States and Soviet Union should work together to advance a peace process which guarantees the territorial integrity and interests of all states and parties. We shouldn't be afraid of Soviet help in solving the intractable problems of the Middle East -- we should welcome it.

The West must have no illusions about the need to balance Soviet power, but neither should it overlook opportunities to encourage the Soviet Union to be a more responsible and integrated member of the international community. Although the long-term success of Gorbachev's policy remains uncertain, the process he has launched holds out a promise of a more responsible use of Soviet power and an opportunity to develop and institutionalize areas of cooperation in the East-West relationship.

Some in the West worry that Gorbachev's economic reforms will simply strengthen the Kremlin in the long run. But Soviet economic and social problems will not be quickly solved. In the meantime, greater openness and pluralization should be welcomed for their own sake as well as for the effect they can have in moderating the way Soviet power is used.

Joseph Nye is a professor of government at Harvard University and co-chairman of a bipartisan task force on Soviet "new thinking." John Mroz is president of the Institute for East-West Security Studies, which sponsored the study. The task force's report, summarized in this article, is being released today.