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Develop an alternative to Law of the Sea

The recent signing of the Law of the Sea Treaty (LOST) by 117 countries has given rise to much talk of America's ''defeat'' and ''isolation.'' Don't believe it. America's opposition to the treaty actually has been an unexpected success: the treaty is dead.

The treaty establishes an International Seabed Authority to regulate use of the seabed and an enterprise to mine the seabed for the developing countries. Many of the authority's objectives openly discourage development and equally openly discriminate against the West. The authority is granted wide discretion to deny companies permission to mine and is empowered to mandate the transfer of technology from private companies to it or developing countries.

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A one-nation, one-vote assembly and 36-member council, both controlled by third-world nations, will run the authority and enterprise. The whole system will be funded by the industrialized West and may be changed by amendment without US consent - even to terminate all private mining - when the ''review conference'' is convened 15 years after the start of mining.

Fortunately, the Reagan administration refused to sign the treaty and is withholding its pro-rata share of the UN assessment to pay for the so-called preparatory commission, a multiyear international clambake to draft voluminous rules and regulations. Forty-six other nations also did not sign, though some may do so later.

But more important than the number not signing is the quality of those not signing. If only the US, Japan, United Kingdom, West Germany, Belgium, Italy, and Spain stay out, the nonsigners will produce more than half of the world's GNP. They will also include most of the likely seabed mining nations. Thus, even if the treaty is ratified by 60 nations and enters into force, it will be just a hollow propaganda shell.

Indeed, France and the Soviet Union signed, but are unlikely to ratify, the treaty. Signing won them points with the third world; ratifying would only obligate them to meet the treaty's financial exactions, which will double without the participation of the US and the other industrialized countries. France and the Soviets also recognize that the real mining competitors with whom they must deal are the other industrialized nations, not the enterprise.

The administration should build on its current success by working with the other industrialized nations to set up an alternative seabed mining system, one based on free enterprise and minimal regulation. While doing so it should reject any participation in the preparatory commission as it meets in coming years. Participation would bring no benefits: The commission cannot remedy the treaty's grievous flaws, and the process will be controlled by the same international diplomats and lawyers who wrote the treaty. But participating would raise doubts about US resolve in developing another system.

The first step in negotiating such an alternative system was the signing of an agreement in September between the US, Germany, France, and Great Britain to resolve potential conflicts between the companies' minesites. The agreement is modest, recognizing a private arbitration agreement previously signed by a number of companies, but it signifies the willingness of these nations (and Japan, which didn't sign for technical reasons) to create a more sophisticated arrangement. Informal recognition of the rights of each nation's miners might be enough; better would be a mini-treaty granting official international recognition to mine site claims.

Such an agreement is achievable, since most of the industrialized nations have already refused to sign the LOST, and some have signed the arbitration agreement. Moreover, such a mini-treaty would give US miners sufficient legal standing to mine. Deep seabed mining is a freedom of the high seas, and cannot be abrogated except by universal agreement.

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The LOST will not be universal, and will be inferior in terms of the quality of its signers, representing less than half of the economic strength of the world. If France and the Soviet Union joined the seven major nonsigners in a separate mini-treaty, the resulting system would contain all the likely mining nations and would represent more than 70 percent of the world's economic power. To encourage seabed mining, a comprehensive and universal treaty would be nice but only an acceptable one is a must.

The Reagan administration's ability to create an alternative legal system for ocean mining will determine the future of seabed development. The administration should take a long view: As an independent system takes shape, even those countries now signing LOST will become less inclined to ratify it and more likely to join the free system. Sinking the LOST strikes an important blow for the liberal international economic order, and will result in a brighter economic future for people all over the globe, including those in the third world. It is a singular achievement.

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