`Alaska To Argentina' Free-Trade Zone Hailed By Clinton -- 34 Nations Promise Enactment By 2005

MIAMI - President Clinton and the leaders of 33 other Western Hemisphere nations pledged yesterday to turn the entire region into the world's largest free-trade zone, setting the year 2005 as the deadline for an agreement to remove barriers to trade and investment.

"When our work is done, the Free Trade Area of the Americas will stretch from Alaska to Argentina," Clinton said as he and the other leaders joined hands and raised them together in a victory salute.

"In less than a decade, if current trends continue, this hemisphere will be the world's largest market - more than 850 million consumers buying $13 trillion worth of goods and services."

Its hub would remain the United States, which accounts for two-thirds of the hemisphere's wealth.

The heads of government also agreed on what Secretary of State Warren Christopher called "an unprecedented series of action plans involving more than 100 specific actions" to strengthen democracy and promote development in the hemisphere. These include measures to combat terrorism, narcotics trafficking, governmental corruption and environmental protection.

But it was trade that emerged as the centerpiece of what participants have dubbed "the Miami process."

The new agreement is another step in what will be a formidable legacy of trade accords for Clinton. It basically proposes to build a free-trade zone in the whole hemisphere similar to the one created among the United States, Mexico and Canada by the North American American Free Trade Agreement.

Like NAFTA, yesterday's accord foresees that tariffs and other trade barriers would be lowered by more than under another international trade pact - the principal global one, called the General Agreement on Tariffs and Trade - approved by Congress earlier this month.

And the new agreement, by creating a specific agenda for negotiating lower trade barriers, proposes to move much faster than the deal reached by the United States with Asian and other Pacific Rim countries at a summit in Indonesia last month. To build the new hemispheric free-trade zone, officials will next year begin the long process of reconciling widely differing policies toward trade, investment, the protection of patents and other intellectual property, agricultural subsidies and other issues on a 16-point agenda. It is an uncharted process that could require several decades to complete, officials acknowledge.

But the leaders committed themselves to achieving "concrete progress" before the turn of the century.

"There was no dissent," said U.S. Trade Representative Mickey Kantor, describing yesterday's meeting by the leaders at a 78-year-old mansion that is now a museum.

The trade accord reflects the powerful surge of free-market economic policies throughout the hemisphere, sweeping away the closed, state-controlled systems that prevailed in Latin America a decade ago.

Following the examples of Mexico and Chile, each of the nations is now committed to expanding its economy by attracting private investment from the United States and other wealthy nations, and increasingly from among themselves.

The flow of U.S. investment to Latin America jumped from $42 billion in 1989 to $52 billion in 1992 and is expected to grow even more rapidly as the Latin American nations align their banking, insurance and financial systems more closely with the United States' model.

Although yesterday's meeting was a portrait of harmony, it followed strenuous negotiations over basic issues, including whether to establish a specific date as the goal for the trade act.

Brazil did not want a date. Smaller Latin American nations did, and the United States hung back, hoping that would create leverage for including language in the pact providing for protection of labor rights and the environment.

So far, Clinton and other top U.S. officials, acting as spokesmen for the summit after yesterday's closed meetings, have dominated the proceedings. Most Latin American leaders have kept a low profile but will have news conferences today.

The template for future hemispheric trade negotiations is NAFTA, Kantor said. NAFTA's far-reaching accords on opening agricultural trade, protecting investments and intellectual property, and its limited but still-controversial call for observance of environmental laws and worker rights should set the pattern for the rest of the hemisphere, Kantor said.

At the conclusion of the Summit of the Americas today, Clinton and the leaders of Canada and Mexico plan to announce the intention to bring Chile into NAFTA as its first South American neighbor.

Following the morning meeting on trade, the heads of government turned their attention to the other two items on their agenda: officially called "sustainable development" and "strengthening democracy."

In summarizing the decisions on democracy, Christopher said that the United States will give money to the Organization of American States to help it resolve disputes and foster dialogue between members.

Decisions also were made to combat corruption by cooperating with international organizations, to attack the drug traffic by encouraging pursuit and prosecution of money laundering and to convene a special meeting to discuss ways of combating terrorism more effectively.

Carol Browner, administrator of the Environmental Protection Agency, said the heads of government had agreed to a hemispheric phaseout of lead in gasoline as soon as possible, and cooperation on managing pesticides to protect food supplies and agricultural workers.