Rep. Richard Gephardt's victory in the Iowa Democratic caucus confirmed the worst fears of America's trading partners: that by appealing to blatantly protectionist instincts, the Missouri congressman could come out on top.

What is most distressing about the Gephardt campaign is the crude nature of his sales pitch: all we need do to cure the trade problem and restore jobs is to force Japan, Germany and Asia's newly industrialized countries (NICs) to quit their horrible, unfair trading practices.

The pitch is both slick and classic: you folks are being victimized by those wicked foreigners. Gephardt ignores the fact that some kind of turnaround is taking place in the trade deficit. He never mentions that many of our imports include technology that will improve American productivity. Yet, today's technology is tomorrow's foreign trade, as Ellen Frost says in her new book, "For Richer, for Poorer: The U.S.-Japan Relationship."

The heart of the Gephardt appeal to Iowa voters is enshrined in his infamous amendment to trade legislation that would unilaterally slap quotas on countries with "excessive" surpluses, unless those surpluses are reduced sharply within a given number of years. That appeals to auto workers and other unionized trades.

Never mind that 80 percent of the trade deficit, as Gephardt is forced to admit, is not traceable to unfair trade practices. Never mind that the Gephardt amendment would do nothing to open up those U.S. markets that restrict imports -- such as sugar, textiles and steel. Trade may be a two-way street, but Gephardt has a one-way mentality.

"To top it off," says Democratic analyst Ted Van Dyk, "Gephardt has joined Hart and Jackson in tilting against a straw man 'establishment,' populated -- according to Gephardt -- by the national media, big business, bankers and Japanese automakers.. . . {A} few months ago, Gephardt the congressman was actively traveling the country preaching closer ties between business, banking and the Democratic Party."

What bothers many former Gephardt admirers is that the young man from Missouri was a bright, hardworking and effective congressman before he got bit by the presidential bug. He knows, deep down, that his protectionist and other special-interest nostrums offer no solution to the nation's basic economic problems.

Gephardt's protectionist campaign -- aided by Democratic stalwarts such as Speaker Jim Wright and Sen. Lloyd Bentsen -- has already forced the Reagan administration into a defensive posture. U.S. Trade Representative Clayton Yeutter is chasing around the world to find and damp out "unfair trade practices," even though such practices (which often duplicate our own) account for a small part of the trade problem.

Europeans and Asians are horrified to think that protectionism as espoused by Gephardt can prove to be a potent political weapon. But Yeutter -- who is a splendid spokesman for American trade policy -- tried to explain the other day to a foreign audience that Japan, Europe and the NICs make Gephardt's candidacy viable by allowing him to tick off some horrible examples.

Where do we go from here? Gephardt may well bomb out in New Hampshire, although, as columnist David Broder suggests, the Missouri congressman may try to put on a new face, turning back to "his true self -- a moderate Democrat with strong back-room negotiating skills."

But what is Gephardt's "true self"? A Wall Street Journal analysis suggests that Gephardt's "true self" is whatever he deems necessary at a given moment in time. He has fine-tuned the art of demagoguery. As Sen. Albert Gore Jr. said in one of the debates, Gephardt goes around knocking the Reagan budget deficits, but helped produce them by voting for the 1981 tax cut.

As long as Gephardt is a viable candidate and able to tap the institutional loyalty of House Democrats, as he did in Iowa, that will keep alive the prospect of a dangerously protectionist trade bill and the "supply management" technique of further subsidizing farm prices. That would add 10 to 15 percent to food prices -- at the same time making American farm exports that much more expensive.

And even if Gephardt gets washed away by a more representative sampling of the electorate than exists in Iowa, his pledge to keep senior citizens' benefits secure and rising will have made it more difficult for an eventual Democratic nominee to deal sensibly over the next four or five years with entitlement expenditures.

Some observers may view with equanimity -- even admire -- the ease with which Gephardt is capable of flip-flopping on key issues. I don't. "He has fine-tuned the art of demagoguery."