On the day before Charles Krauthammer congratulated the Reagan administration for its role in the South Korean political crisis {op-ed, July 10}, demonstrators pulled down the American flag and burned it on the balcony of a leading Seoul hotel amid "wild applause" and "a roar of approval among the hundreds of thousands of protesters," according to The New York Times.

This deeply disturbing event took place because the United States has consistently supported successive Korean military regimes for the past 26 years in their ugly repression of a steadily rising opposition movement. Yet Krauthammer cites Korea, among other cases, to prove that the administration has made the promotion of democracy "central to American policy" in the Third World.

He gave the administration more credit than it deserves for the 11th-hour change in its Korea policy, completely ignoring the fact that the United States had enthusiastically embraced Chun since he took power in 1980. The administration shifted ground only after the popular upsurge in the streets had forced a showdown in the Seoul regime between moderates and hard-liners and only after congressional pressures had begun to build up in Washington. In his attack on Sen. Edward Kennedy's well-timed June 18 initiative to promote democratic change, Krauthammer ignored the important impact of the Kennedy move both on the administration and on the internal power struggle then coming to a climax in the Chun regime.

The record clearly shows why Koreans have blamed the United States for the perpetuation of military rule under the Chun regime. Former ambassador Richard Walker, who shunned opposition contacts during his five years in Seoul, repeatedly attempted to whitewash Chun's rigged electoral laws, observing shortly before his departure that National Assembly elections had been "generally free and fair." Visiting Seoul on May 7, 1986, Secretary of State George Shultz also refused to meet with opposition leaders Kim Dae Jung and Kim Young Sam. Praising Chun's plans for a transfer of power under ground rules that ensured continued military control, Shultz made a widely ridiculed observation that "the institutions of democracy are taking shape."

"I wouldn't describe the situation as volatile in any way," Shultz declared, prompting Wall Street Journal correspondent Bernard Wysocki to write that "nearly everybody else here would describe the situation as highly volatile."

On Feb. 6, 1987, Assistant Secretary of State Gaston Sigur made a significant speech, cited by Krauthammer, in which he signaled a possible change in U.S. policy by calling for a "more open and legitimate political system." But Chun himself had insisted all along that he is moving toward a more open system. Sigur's cautiously oblique criticism, which was not followed up diplomatically, had little impact either on Chun or on Korean public opinion. Shultz promptly backpedaled, in any case, when he revisited Seoul in March. Once again heaping praise on Chun for his decision to retire, he omitted any reference to the national debate over the procedure for the succession then raging in Seoul.

Just a month after the Shultz visit, Chun, confident that Washington would go along with him whatever he did, made the fateful April 13 declaration that triggered the crisis. The next president would be chosen under the same easy-to-manipulate electoral college system that he had used to ratify his military coup in 1980; negotiations on constitutional reform would be broken off, and no public discussion of reform would be permitted until after the Seoul Olympics.

Informed of the impending declaration two days in advance, the administration temporized, registering only "disappointment." Sigur again expressed "disappointment" in congressional testimony. As late as June 17, Shultz continued to sidestep criticism of the April 13 decision, suggesting that the opposition had been unreasonable and shared equally in the blame for the breakoff of the constitutional dialogue.

Having helped to precipitate the explosion in the streets, the administration did intervene decisively to block the use of the Korean armed forces in suppressing demonstrations. President Reagan's June 19 letter to Chun and the State Department's public appeal to military commanders on June 22 undoubtedly played a major role in preventing the imposition of martial law. On the issue of how far to go in making political concessions, however, it was ruling party chairman Roh Tae Woo and other moderates in the Korean establishment who recognized that halfway measures would not defuse the crisis. Fortunately, Roh did not heed Sigur's June 26 appeal to both sides "to examine their positions and work toward the middle."

One of the best-known symbols of the administration's pro-Chun posture was its decision to continue giving preferential trade and investment benefits to South Korea despite bipartisan 1984 legislation explicitly prohibiting such preferences for countries that prohibit free labor unions and violate human rights. Kennedy's bill removing these preferences merely provided for the enforcement of existing legislation. It was an appropriate, measured response to the crisis in Seoul. It was not protectionist, as Krauthammer insinuated, and could be attacked for illustrating "a mean-edged partisan style" only by one who views the Korean scene through doctrinaire partisan lenses.

It is important to assess the American record in Korea dispassionately because the road to democratic change is likely to be rocky. Roh Tae Woo has delivered on one of his key promises -- the restoration of Kim Dae Jung's political rights. But he has not made good on his pledge to release political prisoners. The National Council of Churches in Korea said last week that 1,283 out of 1,845 prisoners have yet to be freed, many of them leading activists who would play a major role in a free election campaign. Roh has not yet made clear whether he is prepared for meaningful constitutional and electoral law reforms that would enable the opposition to compete fairly for power. He has not agreed to permit labor organizing. Above all, he has shown no disposition to restrict the vast secret police apparatus built up during military rule or to modify the National Security Law, on which this apparatus operates. For the United States, the most serious policy challenges in Korea still lie ahead.

The writer is a senior associate of the Carnegie Endowment for International Peace and former Northeast Asia bureau chief for The Post.