DOES PRESIDENT REAGAN know what he is doing in preparing a final decision not to sign the law of the sea treaty? Evidently he thinks American seabed mining can still proceed, sanctioned either by domestic legislation or by a "mini- treaty" with other industrialized countries. His own review, however, found that no American firm would risk the requisite $1.5 billion or so for each venture under domestic legislation. Furthermore, it is clear that a mini-treaty is a nonstarter. None of the major financial institutions it queried, the GAO reports, would lend money to a seabed venture enjoying mini-treaty sanction alone.

The meaning is plain: American miners will flee to foreign flags, and the United States will have lost its chief treaty goal of direct assured access to strategic raw materials. It will have clouded American use of the navigation freedoms inscribed in the treaty--a major loss for a maritime power--and of further treaty benefits in fisheries, environmental protection, scientific research and the like. For being probably the single nation among 160 to spurn the treaty, it will look like a chump.

And for what? For years, a number of conservative ideologues have been calling the treaty's designation of seabed minerals as the "common heritage" of mankind nothing less than global socialism. The election of a president dedicated to a free-enterprise ideology gave these critics, in and out of government, new life. But they have served Mr. Reagan ill --by insisting in the negotiations on a confrontation over ideology rather than on a compromise to win practical improvements for American investors.

For instance, the critics raised an alarm over the text's production ceilings--these are objectionable, but they are set safely beyond reach. Private firms are enjoined to sell their technology to the treaty's collective mining authority--again, objectionable in theory but washed out in practice by other language. The text's call for a second conference to review the treaty in 20 years suggests that the conferees could override the original terms of American ratification--why not let the lawyers handle it? General language indicates that the one-nation/one- vote assembly will boss the executive council, where the industrialized countries have more weight--but other specific language delineates the powers and functions of the two bodies more comfortingly.

Anyway, hardheaded treaty defenders don't say it's fine as is. They say the United States has wasted its repeated openings to negotiate practical changes. But the attackers have carried the day, as evidenced by Mr. Reagan's truly unfortunate decision to throw away, for nothing, his one last chance to try.