Turkey will not get into the European Union customs union this fall. That is what U.S. embassies have been reporting back to Washington.

For months, Turkish government, military and parliamentary figures have been wrangling over a constitutional reform package aimed at persuading the European Parliament that it ought to vote "yes" on Turkey. The Turkish military spoke publicly against the reforms. The government's culture minister, resigning in June, called the package "watered down" and incapable of making the democratic changes the country needs.Finally, under pressure from the United States and the European Union, a part of the "reform" package was passed on July 23. President Clinton sent Prime Minister Tansu Ciller a letter of congratulations, the European

Commission praised the action and the Council of Europe said, "We hope that the process will continue when parliament returns."

But it's the European Parliament that must decide, and its president, Klaus Haensch, repeated that the reforms were inadequate.

Their major impact was to broaden political participation, lowering the voting age from 20 to 18 and allowing students, professors, trade unions and other organizations to take part in politics.

But parliamentarians rejected an amendment that would have allowed people to challenge the constitutionality of military-era laws and decrees and to charge military officials with corruption, bribery, theft, smuggling and other crimes.

New rights for labor unions still don't bring Turkey up to the standards set by the International Labor Organization. The parliament upheld a ban on strikes and lockouts labeled as politically motivated.

And none of the changes address Turkey's fundamental human rights problems: extra-judicial execution, the growing number of "disappearances" in custody and widespread and systematic torture. A study prepared for Ms. Ciller and just reported in the Turkish press says that torture has become a traditional means of interrogation. Amnesty International cites 29 reported deaths in custody due to torture in 1994, more than in any year since 1982, a time of military rule.

The anti-terrorism law allows detention for up to 30 days in provinces under a state of emergency and for 15 days elsewhere, without access to family, friends or legal counsel. Torture occurs during this "interrogation" period, with prisoners subject to jets of ice-cold water, hanging by the arms, electric shocks, beating on the soles of the feet and sexual assault.

Nor do they deal with the lack of free press and speech. Turkey has more journalists in jail than any other country in the world. The parliament failed to vote to abolish Article 8 of the anti-terror law, which punishes ''separatist propaganda" with up to five years' imprisonment. The government said it would try to change this law at a special session in September. But even the proposed change simply moves the offense to the penal code.

The military and conservatives in parliament, including those in Ms. Ciller's own party, oppose any end to restrictions on free speech on grounds that would encourage Kurdish separatists. Nothing in the "reforms" recognizes the cultural and political rights of the Kurds.

Even Deputy Prime Minister Hikmet Cetin, chairman of the Republican People's Party, the government's junior coalition partner, was guarded in his praise: "I know it has not happened the way we wanted, but we should be

satisfied with what we have achieved."

In fact, Ankara sometimes seems to be deliberately poking its finger into the European Parliament's eye. Under the anti-terror law, the authorities prosecuted and the courts imprisoned six Kurdish members of parliament for up to 15 years for expressions of opinion, and jailed the former mayor of Diyarbakir for testimony he gave to the European Parliament's Human Rights Subcommittee. Another two parliamentarians were sentenced in absentia.

The U.S. administration is not very happy about any of this. The State Department spokesman said, after the constitutional reforms passed, that "the Turkish government ought to continue this effort to liberalize and to reform." Assistant Secretary for Europe Richard Holbrooke has been quietly urging Turkey to reform, but undercutting himself by publicly praising Ankara and lobbying the Europeans to take Turkey into the customs union.

Inside the State Department he has been battling with U.S. Human Rights Secretary John Shattuck. The State Department report in June detailing the use of U.S. military equipment in human rights abuses was toughly negotiated. Mr. Shattuck wanted lots of detail; Mr. Holbrooke wanted as little as possible. His chief interest in Turkey is for use as America's military base in the Middle East.

If Turkey doesn't get into the European trading circle, U.S. business is ready to pick up the pieces and increase its own economic contacts. Washington has named Turkey, a huge consumer of U.S. weapons and other goods, one of America's ten most important emerging markets. Richard Perle, a Reagan administration Pentagon official who has lobbied for Turkey, has just set up a U.S.-Turkish business council.

Yet business people also must be concerned about Turkey's growing instability. The 11-year war against the Kurds in the southeast has led to the razing of a thousand villages and the displacement of several hundred thousand people. At the same time popular revulsion at widespread corruption has increased votes for the Islamic fundamentalist party, which now runs Ankara and Istanbul and towns where two-thirds of the population lives. The Kurdish southeast is an Islamic party growth area.

The United States is not sending Turkey the right message. It is telling

Ankara to pass whatever will get it into the customs union. But instead of backing Europe up to win real reform, it is letting Turkey off the hook by emphasizing that it will continue its "strategic" partnership no matter what happens.

Repression and the corruption bred by lack of democracy are not good for capitalist development or for political stability. It would be better for Turkey if Washington decided to give it some "tough love."