In yesterday's Business section, a reference to a list of 17 "highly protected industries" should have included "rubber footwear," not "footwear."

The United States and other major nations in the world's trading system should convert existing restrictive quotas to tariffs -- or auction the quota rights to the highest bidders -- and then use the money to pay for training or early retirement of workers in troubled industries, a study by the Institute for International Economics urged yesterday.

In the United States, the proposal would yield $9.8 billion in new revenue in 1986 to finance this "new mode of protection." It would allow the phasing down of 17 highly protected industries, including steel, textile, auto, footwear and dairy products "to internationally competitive levels," authors Gary Hufbauer and Jeffrey J. Schott said in an interview.

The new approach is a key element of a package of recommendations made for consideration in a proposed new round of multilateral trade negotiations. A meeting of senior officials of the General Agreement on Tariffs and Trade will begin preparing for the round in Geneva on Sept. 30.

The United States and Japan proposed the round at the economic summit in Bonn last May, but formal approval was stalled when France would not agree to a specific starting date. Despite continued reservations by key Third World nations and -- at best -- lukewarm support in the American business community and doubts in Congress, trade liberalization advocates predict that negotiations can get under way in 1986.

Coincidentally, the Overseas Development Council warned that, in launching the new round, it is urgent that the American negotiators place expansion of trade with the Third World at the top of the agenda.

The ODC report, edited by former State Department official Ernest H. Preeg, joined in urging more generous adjustment assistance for workers in the textile and other highly protected, labor-intensive industries.

Hufbauer and Schott viewed the proposal to abandon quantitative trade restrictions (including so-called "voluntary" quotas such as the U.S.-Japan limits on auto sales) as the key idea in their package. They said that tariffs and the auctioned quotas would allow imports to come "from the cheapest source, and they provide a source of revenue that can be dedicated for worker and firm adjustment assistance."

The $9.8 billion that could be raised in the United States in 1986 would be in addition to $6 billion in existing tariffs, for a total of $15.8 billion, although Hufbauer said he thought no more than $5 billion would be needed in the first year to start the phase-out process in 17 industries where there is "extraordinary" protection. The authors did not estimate the revenue that would be generated in other countries.

Hufbauer said that, under the system proposed, 47,000 U.S. textile workers would be phased out of jobs at a cost of about $10 billion over a six-year period. Early retirement would be provided for those 59 years of age and over, while younger workers would be retrained or relocated. Imports would have increased from 20 to 30 percent of consumption, but U.S. textile exports would have more than doubled because of liberalized import restrictions in overseas markets, the authors said.

In releasing the Hufbauer-Schott study, Institute Director C. Fred Bergsten also called on the United States to provide greater Third World funding through the World Bank, to modify export controls that irritate America's European partners and to agree to talks on reform of the international monetary system parallel to the trade talks.

A link between trade and monetary talks has been advocated by France and some other European countries, but so far rejected by the Reagan administration, which argues that trade and monetary negotiations ought to be conducted separately.

Bergsten again called for minimizing exchange-rate fluctuations by adoption of target zones for key currencies, which would require national governments to keep the dollar, yen and mark exchange rates in a narrow band.

Although Treasury Secretary James A. Baker III and other finance ministers of the 11 rich nations in the so-called Group of Ten rejected target zones as impractical in a formal meeting last June in Tokyo, Bergsten said there are increasing pressures here and abroad to link the trade and monetary questions.

"The [huge U.S.] trade deficit is inexorably going to force us in that direction," Bergsten said. He added that, "if I were a betting man," he would wager that such negotiations eventually will be linked.

Both the institute and the ODC reports acknowledged that, in a climate in which protectionist sentiment is growing, the odds against launching a new trade round -- whose main goal is liberalizing world trade -- might seem long. In releasing the ODC study, President John W. Sewell noted that skeptics say the high dollar and huge trade deficits weaken the U.S. bargaining position.