ONE OF THE arguments in the presidential campaign that could end up really mattering is the one over trade. The Democrats, historically the party of free trade, now have seven candidates with divergent positions -- some rather good and some dangerously bad.

Start with the bad. Richard Gephardt campaigns as a man who can get things done, and one of the things he has done is to get the House to pass a bad trade bill. The bill would threaten countries that run trade surpluses with the United States -- Japan, South Korea and Taiwan mainly -- with tariffs or quotas. But, as Joseph Biden pointed out in the "Firing Line" debate in Houston, and as Mr. Gephardt admits, only about 20 percent of the U.S. trade deficit can be blamed on other countries' unfair practices. And as Bruce Babbitt says, "it makes no economic sense to say that every nation must balance individually with every other nation." Mr. Gephardt has a point when he says that lower barriers could stimulate American firms to become better competitors. But his bill could easily result in higher barriers all around, with results you can read in any history of the 1930s. The Gephardt bill is the sort of thing you expect from a congressman from a heavy-industry district who wants to give his fellow partisans an issue for the next campaign. It's not what you expect or want from a president.

Two other Democratic candidates -- Jesse Jackson and Paul Simon -- would vote for the Gephardt bill, although Mr. Jackson has some reservations and calls for more comprehensive regulation, evidently to prop up the commodity prices on which Third World economies depend -- probably an impractical idea.

The other four Democrats running oppose the Gephardt bill, but wouldn't leave trade alone. Bruce Babbitt wants an international agreement to require any nation that runs a significant trade surplus to reduce it within three years or face tariffs from all other nations -- something that would be hard to get and to police. Joseph Biden calls for converting import quotas to tariffs, with the proceeds to go for retraining -- but such barriers are hard to get rid of -- and favors some forms of automatic retaliation. Albert Gore favors restrictions on industries such as shoes and textiles to protect U.S. industry. Michael Dukakis usefully points out that 6 million American jobs depend on exports, but still favors some protection of industries in trouble.

Four years ago the Democratic debate on trade was over the United Auto Workers' domestic content; this year's debate about the broader issue is a step forward. Not even Mr. Gephardt is just an errand boy for the unions. The lesson of the past 40 years is that this country and the world prosper when trade barriers are low and the volume of trade high. But even the best of the Democrats are too ready to endorse barriers and seem more worried about preserving the past than stimulating growth in the future.