American foreign policy in a SALT-free world. No reason to fear arms race . . .

DON'T panic, folks. Russia and the United States are not about to plunge into a runaway arms race as a result of President Reagan's decision to bury SALT II. A SALT-free world will not be significantly different from the world of an unratified SALT II. Neither superpower shows an inclination to launch into the massive new escalation of nuclear arsenals former Defense Secretary Robert McNamara and other critics claim is inevitable. What is emerging is a tacit understanding that holds out the prospect of a measure of mutual restraint while the quest for SALT III continues.

On the American side, Mr. Reagan says the US will not deploy more strategic bombers and missiles or more strategic ballistic missile warheads than the Soviet Union possesses. While the administration insists that defense decisions will henceforth be based on the nation's security requirements rather than on limits dictated by SALT, any expansion of America's strategic forces beyond those limits is likely to be marginal, probably temporary, and essentially symbolic.

On the Soviet side, spokesmen have gone out of their way not to threaten a major escalation in the arms competition but rather to emphasize that Moscow will respond only if the US exceeds SALT limits. And the Kremlin has come up with new proposals that could break the deadlock in the Geneva arms control talks.

These expressions of restraint cannot be dismissed simply as propaganda. They reflect economic, political, and military realities that make a runaway arms race an unattractive proposition for Reagan and Soviet leader Mikhail Gorbachev.

Reagan, in fact, could not escalate the American weapons buildup if he tried. With Congress and the public pressing for cuts in the Pentagon budget, the President is forced to wage an uphill battle to avoid substantial cutbacks. Congress is also considering a resolution urging the President to remain within SALT II limits, with the House threatening to bar spending on weapons exceeding those limits.

Not much prospect for a runaway arms race in that situation -- not on the US side, anyway.

What about Mr. Gorbachev? Is he attracted by the notion of a massive buildup beyond the SALT II limits? If he chose to go that route, he, unlike Mr. Reagan, would not be inhibited by a Congress bent on curbing defense spending or on forcing him to observe SALT limits. Furthermore, he has the production capacity to expand Russia's strategic forces fairly quickly.

But there are strong pressures on Gorbachev to resist that temptation, economic pressures above all. He is committed to tackling the economic crisis that relegates the Soviet Union to the status of an underdeveloped nation in terms of living standards and industrialization.

The job is tough enough with 15 percent of the gross national product already devoted to the military -- substantially more, in the judgment of some analysts. The Soviet leader could hardly welcome a radical increase, and there is no sign that he is contemplating revision of the five-year economic plan approved by a party congress earlier this year.

Nor is there a compelling military incentive for the Soviets to escalate dramatically beyond the limits fixed by SALT II. The treaty allowed them to expand their arsenal of strategic warheads from 5,000 to 9,000 during the six years that the superpowers observed it, and it would permit them to add several thousand more in the future. The Soviets were not prevented from acquiring enough silo-busting warheads to pose a first-strike threat to America's land-based missile forces, nor would the United States have been prevented from acquiring a similar capability against Russia's ICBMs in the early 1990s.

The truth is that SALT II was designed to leave Russia as well as America free to carry through with plans to modernize strategic forces without interference -- free, that is, to engage in a continuing and large-scale arms race.

Now that Reagan has repudiated a treaty that he always regarded as ``fatally flawed,'' the critical question is not whether he has triggered a massive new arms race but whether he can produce an unflawed version of SALT -- one that would actually lead to radical reductions in strategic weapons and greater stability.

If he succeeds -- and no President in a quarter of a century has been in a stronger position to pull it off -- he would leave office as the hero of the arms control cause that reviles him today as its chief villain.

Joseph Fromm, a veteran foreign correspondent and former assistant editor of U.S. News & World Report magazine, is US chairman of the International Institute for Strategic Studies and a fellow at Johns Hopkins School of Advanced International Studies.