If we need a scapegoat for our trade ills, Japan is as good as any. By any measure, Japan is not playing fair in international trade. But if Japan removed all restrictions against U.S. exports tomorrow, it could absorb only $2 billion to $3 billion in new imports, according to Gary Saxonhouse, a professor of economics at the University of Michigan.

We have a $20 billion trade deficit with Canada, but nobody is upset with our neighbors to the North because we enjoy relatively open access to their markets.

The overvalued dollar and Japan's competitive edge in a broad range of products are more telling factors in the trade imbalance between our two countries.

Aside from passing anti-Japanese resolutions and talking tough, what can we do about the accelerating trade deficit that inhibits our exports and brings in cheap imports that threaten our domestic industries?

First, the United States must intensify efforts in bilateral and multilateral negotiations to end unfair trade practices. U.S. Trade Representative Bill Brock has been pushing for a new round at GATT, but his hasty departure to become secretary of labor will forestall any new multilateral effort to eliminate unfair trade practices.

In bilateral trade talks, we have seen recent attempts to get tougher, notably by Secretary of Commerce Malcolm Baldrige. But we have not seen a willingness to use a stick if carrots do not work.

Congress last year gave the president new authority to apply reciprocity on a sectoral basis. For example, he could "unbind" the existing tariffs on two-way trade in telecommunications and use the threat of increased tariffs on Japanese goods to press Japan to open its market to our telecommunications manufacturers. But so far he has chosen not to use this law or the other statutory powers at his disposal.

Targeting unfair trade practices in Japan and other nations must not obscure today's most vexing trade problem -- the overvalued dollar. It acts as a 40 percent subsidy on imports and a 40 percent tax on exports. If the currency imbalance and resulting relocation of American manufacturing overseas continue at current rates, the United States will have no industrial base by the year 2000. According to McGraw- Hill, 50 cents out of every dollar spent on capital equipment last year went overseas.

Recent Department of Commerce statistics are disturbing. Consumer spending is rising, but domestic production is down. "One of the clearest messages in the report on the first quarter growth is that the beneficial effects of strong consumer spending are being siphoned off by increasing import penetration," says economist Robert J. Barbara of E. F. Hutton & Co.

The U.S. merchandise trade deficit for February jumped to $11.4 billion. Exports fell 7.7 percent while imports are continuing to displace domestic-made goods.

For the first time in 65 years, the United States has become an international debtor nation. We are now importing more goods and services than we can pay for, and the trend is not expected to change.

As Paul Volcker testified before a Congressional subcommittee last month, our current budget and trade deficits "imply a dependence on foreign borrowing that, left unchecked, will sooner or later undermine the confidence in our economy." We are living on borrowed time.

Incredibly, President Reagan seems to see the high-flying dollar as a validation of his economic policies. Every time he publicly embraces the strong dollar, it soars to new heights on foreign exchange markets. The president's only solution is for other countries to "improve their own economies." But that will take years, if it happens at all.

The administration is hoping for a soft landing of the strong dollar, but the odds are that when it comes it will be a crash landing.

Of course, numerous factors influence exchange rates, including such intangibles as international confidence in the U.S. economy, the economic growth trends of other countries, and investment hunches on where the global economy is going.

But the Reagan administration must stop relying on natural market forces to smooth out the monetary bumps and take immediate steps to deal with today's volatility in exchange rates.

On the domestic side, we must deal with the budget deficit. The administration's unprecedented tide of red ink has kept real U.S. interest rates sky-high, siphoned financial capital from other nations, and created a radical misalignment of currencies. We have financed our nation's temporary boom at the expense of our neighbors in the global community.

The president should publicly acknowledge that the inflated dollar is a problem, thus signifying to international investors our government's intention to restrain extreme currency fluctuations in the future.

The president has the opportunity to raise currency and trade issues at the summit in Bonn next month. Other summit leaders are most anxious for him to do so. At the very least Treasury Secretary James Baker should engage in preliminary discussions when he attends the upcoming OECD meeting in Paris.

Finally, the U.S. government must take the lead in preparing strategies to achieve greater stability of exchange rates. A good model can be found in the European Community's monetary "snake," which limits the permissible fluctuations among Europe's currencies. Economist C. Fred Bergsten has suggested setting target zones to restrain extreme movements in exchange markets.

The unanimous Senate rebuke to Japan for its protectionist habits is timely, but our trade problems are more fundamental and require more creative solutions.

Now that we have "sent a message," the administration and Congress must sit down and develop a comprehensive trade and monetary policy to improve our domestic economy and ensure our position in the global marketplace.

In Congress, patience and time are running out. If President Reagan is too passive or appears paralyzed in dealing with our trade problems, Congress will be only too happy to step in with a protectionist cure-all.