Granted that the sudden collapse of negotiations aimed at removing Gen. Manuel Antonio Noriega from power in Panama leaves the U.S. looking weak and foolish.

Even so, the Reagan administration doesn't deserve all the criticism it is getting either for this embarrassing development or the decision to pursue the failed negotiations.After all, what else could the administration have done? While the critics have been quick to find fault, they have been slow to suggest workable alternatives. But then that's understandable, considering the options available.

Though the U.S. applied economic sanctions that brought Panama to the brink of ruin, they didn't work. But, then, sanctions seldom do.

What about either an invasion of Panama or covert U.S. military action? Just try finding much support for such moves even among the administration's persistent critics in Congress, let alone among the America people. U.S. military intervention would endanger Americans already in Panama and alienate America's allies.

Though the people of Panama are becoming increasingly restive, one coup attempt has failed and there seems to be little immediate prospect of others. As long as Noriega retains the support of Panama's military, his hold on power seems secure.

Since Noriega's drug-trafficking operations pose a threat not just to the U.S. but to the entire hemisphere, why not take one diplomat's advice to let Latin Americans solve the Noriega problem? Fine. But solve it how? Aside from vague talk about exerting outside political pressure on Noriega, no specific suggestions have been forthcoming.

That left the U.S. with the course it unsuccessfully pursued, a course that amounted to plea bargaining. If Noriega bowed out under conditions acceptable to the U.S., Washington would drop drug charges against him.

It's hard to understand the uproar this offer touched off on Capitol Hill - except as a reflection of short-sighted political posturing. Sure, this put the U.S. government in the awkward position of making concessions to a crook. But the fact remains that there was no way of extradicting Noriega and, consequently, no prospect of bringing him to trial on the drug charges.

Now that the plea bargaining effort has collapsed, what lessons can be learned from this unhappy experience?

One of them involves the likelihood that the negotiations collapsed because some of Noriega's cohorts wouldn't let him make a deal, fearing what would happen to them after he was no longer around to protect them. If the Reagan administration is to be criticized, it is for under-estimating the extent to which drug-related corruption permeates the military establishment in Panama and that country's civilian government.

But perhaps the most pointed lesson is that when it comes to such a dirty business as Noriega's drug-trafficking, there are no neat, clean solutions, only difficult compromises that don't always work.

Meanwhile, with the collapse of negotiations to remove Noriega, the indictments against him remain in effect as a symbol of U.S. outrage against the drug trade and its insidious effects on the entire hemisphere.