President Reagan and Singapore Prime Minister Lee Kwan Yew held a pep rally at the White House yesterday in favor of freely flowing international trade and against "the dangers of protectionism."

After inadvertently welcoming the 62-year-old Asian leader "to Singapore" and referring to Lee's wife as "Mrs. Yew," Reagan praised the "dazzling" economic success of Singapore under Lee's free-market principles.

His country's first and only prime minister, Lee has spoken of retiring soon and, according to U.S. officials, may now be paying his last visit to the White House in that role.

Lee, in his arrival remarks, said U.S. trade "has boosted growth in the noncommunist countries of Southeast Asia and made them peaceful, prosperous and confident societies."

An hour-long meeting of the two leaders and their aides centered on the problems of the international economy and the dangers of protectionism, according to a White House briefing.

After 25 years of nearly steady growth, during which Singapore's income has grown from $400 per person to nearly $7,000, the predominantly Chinese city-state has encountered a sharp and painful economic downturn. Economic growth was negative in the second quarter and may show no growth for the entire year because of sluggish trade and internal problems.

Reagan referred obliquely to the problems but said Singapore's people "have every reason to have faith in tomorrow" because of the competitiveness, profit motive and low tax rates that have characterized Singapore's economy.

Reagan expressed the hope that he and Lee will stand "shoulder to shoulder" against protectionism, which he called "a threat to the living standards our people have worked so hard to build." Lee is expected to dwell on his opposition to protectionism in an address today to a joint meeting of Congress.

A prominent anticommunist and outspoken backer of U.S. participation in the Vietnam war, Lee spoke in his arrival remarks of the unchallengeable U.S. "preeminence" in Southeast Asia in 1965, the bleak outlook of the region after the "tragic ending" of the Vietnam war that brought communists to power in 1975 and continuing U.S. resolve and involvement with air and naval forces in the Pacific.

In his meeting with Reagan, Lee spoke of the importance of U.S. "moral" and "material" support for noncommunist Cambodian insurgents fighting the Vietnamese-backed Phnom Penh government.

A senior U.S. official who briefed reporters said Lee did not specifically request U.S. military aid to the noncommunist Cambodian guerrillas, something the administration has been reluctant to grant.