THE new seven-point union treaty proposal worked out by Mikhail Gorbachev and the leaders of 10 republics is a positive step toward at least temporary stability in the Soviet system. The proposal is intended to keep a functioning state alive long enough to write a new constitution and create a new federal government based on elections.The thrust of the proposal, which would rename the Soviet Union the "Union of Sovereign States" could give the newly roused republics near total autonomy while still maintaining a loose economic union. The old union would be run by three councils, including a Council of Representatives made up of 20 members from each republic. The old state party apparatus, including the military and the KGB, would continue to be dismantled. Current Soviet treaties on arms control would be honored; citizens' rights would be ensured. Paradoxically, the reason this proposal is probably workable is that it allows each republic to choose how it would participate in the new union. Preliminary reports indicate, in fact, that the Baltic states, which are about to attain the full independence they deserve, are interested in forming some kind of temporary economic alliance with a new Soviet government based on this union treaty. The new dynamic in the Soviet Union and among its various politicians, both reform and centrist, blends the rational need for a federal system to ensure order and the passionate desire for republic-based nationalism and autonomy. This dynamic will play itself out in the somewhat unwieldy Congress of Peoples' Deputies, the highest legislative body in the Soviet Union. The congress should adopt and ratify the new agreement. It is true the congress is not a truly representative body, since about a third of its members are appointed by party cells. But with winter coming and with the current state of uncertainty, there is neither the time nor cohesiveness to organize a general election. The new treaty reflects liberal reform sentiments. Besides, each republic will be able to vote on the treaty, and the republics are currently more democratic and have more popularly elect ed representatives than does the center.