Lose arms around Baltic, say (3)
I believe the answer is:
sea
'baltic say' is the definition.
(baltic is a kind of sea)
'lose arms around' is the wordplay.
'around' indicates the answer is hidden within the clue.
'SEA' is hidden in the letters of 'lose arms'.
(Other definitions for sea that I've seen before include "that's easily reached from Dover?" , "The briny" , "The deep" , "Expanse of salt water" , "It's stocked with fish" .)