President Reagan heard arguments Monday for and against U.S. participation in a treaty aimed at freezing emissions of an important precursor of acid rain. The pollutant in question, oxides of nitrogen, accounts for about one-third of the acidity in rainfall in the eastern United States and Canada. The Cabinet's Domestic Policy Council, with Reagan presiding, was briefed on a proposal coming from a United Nations-sponsored negotiation that would freeze emissions until 1996, pending further research on the effects of nitrogen oxides and how to reduce them. Reagan made no decision, but participants expect one soon. Oxides of nitrogen are formed in the combustion of fossil fuels in industry, utilities and motor vehicles. In the air they may be transformed into nitric acid. In urban areas they are an essential raw material for making smog. U.S. emissions have been roughly steady since 1980 and according to EPA projections should remain that way until about 1995, when slow increases should start. The 21.3 million tons emitted in 1986, the most recent year available, were 8.5 percent below the peak year of 1978. According to two participants in discussions over the issue, both of whom spoke on condition of anonymity, the Environmental Protection Agency supports joining the treaty while the Energy Department, supported by the Interior and Commerce departments and the Office of Management and Budget, opposes it. EPA spokesmen declined to discuss their agency's participation in the meeting. The telephone of an Energy Department official to whom questions were referred did not answer. The United States in 1985 declined to join a similar international agreement calling for a 30 percent reduction in emissions of the other major precursor of acid rain, sulfur dioxide.