The latest simple-minded sport.

Japan, everybody's favorite whipping boy, has a new competitor: Mexico. Washington policy makers make headlines alleging Mexican government involvement in drug trafficking. Conservatives in the United States bemoan Mexico's coziness with Cuba and Nicaragua and castigate Mexico's penchant for anti-U.S. rhetoric. Liberals in the United States describe Mexico's one-party political system as disguised authoritarianism and lament its use of fraud and force to retain power. Businessmen and bankers criticize Mexico's economic disarray. Scholars and journalists predict the demise of a system plagued by decay and corruption. All of the above castigate Mexican President Miguel de la Madrid as weak, indecisive and unable to provide the leadership Mexico needs.

The Mexico-bashing emanating from the United States today tempts one to conclude that Mexico is headed for inevitable collapse. Certainly there are elements of truth in all of these charges. But to focus only on what's wrong in the Mexican system -- and there is plenty wrong -- is to ignore what's working.

Whatever the extent of Mexican involvement in drug trafficking -- and that involvement surely exists -- the fact remains that the United States is the world's largest drug market. Until Americans crack down seriously on America's own drug network, the Mexican government should bear only part of the blame. Moreover, recognition must be given to that government's efforts, though uneven, to cooperate with U.S. drug enforcement authorities during recent years.

Mexico's penchant for leftist diplomatic relations is irritating but little more. Its relationship with Cuba is Mexico's affair, not ours. In any event, Mexico is only one of many countries throughout the hemisphere, including Canada, that maintain diplomatic ties with Cuba.

Moreover, Mexico's support for a diplomatic solution to the Nicaragua dilemma is not inconsistent with the views expressed by a majority of members of Congress, the American public and even parts of the Reagan administration. Mexico's anti-U.S. rhetoric is tiresome but has to be understood as the response of an insecure nation, deeply ambivalent about a country that, after all, stole half of its territory. The Mexican military squashed leftist guerrilla groups in the 1960s and 1970s so effectively that virtually nothing remains of them today. Socialist-oriented political parties have proven so weak and divided that they have scarcely managed 10 percent of the electoral vote.

Liberals who decry the repression of the Mexican system have a point. But even with its flaws, the Mexican system, compared with many other Third World countries, is a relatively tolerant one. The press, while under some control, is increasingly vocal and critical of the government. Opposition political parties, even in Mexico's partly free system, nevertheless captured 111 seats in the last congressional elections and 65 mayoralties. Admittedly no governorship, a key center of power in the Mexican system, has ever been won by the opposition.

But there are important forces at work within the ruling PRI pushing for an opening up of the larger political system as well as the internal one. They recognize the need to reinvigorate a system showing serious signs of decay. They have had some success with "primaries" in the American system in an attempt to identify better candidates more responsive to the PRI's support base.

The international business community alleges a lack of political leadership and criticizes Mexico's economic morass. But it should recognize the important and gutsy initiative that de la Madrid and his economic team are taking to set Mexico's house in order. Many of the obsolete policies that got Mexico into its current predicament are being set aside, and the groundwork is being laid for a much healthier Mexican economy.

For example, de la Madrid is negotiating Mexico's entry into the General Agreement of Tariffs and Trade and reducing Mexico's highly protected trade regime, steps of major long-term benefit but high short-term political and economic costs. In addition, he has begun to reduce the size of the federal budget deficit and privatize inefficient state-owned corporations. The recent closure of the labor-intensive Fundidora steel plant is a good example, and more can be expected.

Moreover, in spite of growing pressures from his own political base to seek a radical solution to the foreign debt, he has negotiated a landmark rescheduling agreement with Mexico's creditors, which serves as a model for the rest of Latin America. With oil prices plunging, the government is plugging away, not always with the desired speed or dedication, at stimulating Mexico's nonoil exports (which may grow 20 percent this year). The peso is holding its own, and the number of U.S. wholly owned companies is growing, despite continued problems in the foreign investment environment.

In sum, Mexico is laden with problems -- economic, political, demographic. Its efforts to deal with them are slow, halting and sometimes detrimental to U.S. interests. Moreover, Mexico's tendency to define its problems as somehow always caused by U.S. "imperialism and aggression" is puerile and unbecoming to a nation with an ancient and proud history.

Mexico presents us with a mixed picture of problems and progress. Our oversimplified assessments and excessive criticisms are inappropriate and just plain wrong. Is this the way to encourage Mexico to continue tackling its problems -- or could it be tragically counterproductive?