ECONOMICS : Latin American Leaders Fly in Formation on Free Trade : Cuba’s Fidel Castro the odd man out at Colombian summit.

High-level international summits often abound with empty ceremonial discourse, but there was more than pomp and palaver at the fourth annual Ibero-American Summit. A growing sense of Latin American unity, a feeling of community, emanated from the air-conditioned halls here as Latin America’s presidents met last week with leaders from Spain and Portugal.

For the most part, Latin America’s flock of nations seemed to be flying in formation--at different speeds, with much fluttering and flapping and some falling out of line here and there. But countries of this huge region are beginning to look like birds of a feather. Could it be that liberator Simon Bolivar’s dream of a great Latin American union is finally coming true?

Not yet, although it seems more possible than ever.

Latin American countries are drawn together by culture, history and geography. And since the beginning of the 1990s, almost all of them also share a common denominator of democracy, albeit imperfect. All of this has helped the yearly Ibero-American Summit become a friendly forum for promoting regional solidarity and integration.

The theme of this year’s summit was “Trade and Integration as Elements of Ibero-American Development.”

The final declaration, signed by all 21 participating countries, emphasized the goal of “stimulating processes of regional integration through free-trade agreements and economic complementation.”

In an example of progress toward free trade among economies that once were heavily protected by tariff barriers, three major Latin American countries signed a new free-trade agreement on the eve of the Cartagena summit. Mexico, Colombia and Venezuela--calling themselves the Group of Three, or G-3--are to eliminate all tariffs on mutual trade within 12 years.

The G-3 pact is the latest of several free-trade agreements in Latin America, some overlapping.

Mexico, for example, has a free-trade accord with Chile, as well as being a signatory of the North American Free Trade Agreement with the United States and Canada. And Colombia and Venezuela belong to the Andean Pact.

The Cartagena declaration said the final goal for all subregional trade agreements should be their convergence in a single hemispheric project, NAFTA included.

That goal seems more realistic today than it ever might have, partly because the consolidation of democracy in Latin America has brought closer relations among governments with similar principles and ideals.

Hopes for regional integration are also based on an almost unanimous movement by Latin American governments toward policies favoring market economies with reduced public sectors and increasingly free trade.

And, as Chilean President Eduardo Frei said after the summit, Latin America feels more need than ever for the strength of economic unity as it sees Europe, North America and eastern Asia forming powerful trade blocs.

“This is the reality,” Frei said. “I believe our union is fundamental.”

The odd man out in all of this is President Fidel Castro of Communist Cuba. Castro attended the Cartagena summit and signed the final declaration but made no public concessions to entreaties by other presidents for democratic and market reforms in Cuba.

Unless such reforms are made, several presidents warned, Cuba will be left by the wayside as other Latin American countries wing their way toward hemispheric unity.

In contrast, and even though Castro’s nemesis to the north often was mistrusted and resented by other Latin Americans in the past, most governments of the region are now eager to include the United States in their integration plans.

Many hope to start negotiating with Washington on trade agreements similar to Mexico’s with NAFTA, and almost all are looking forward to a hemispheric summit meeting scheduled by President Clinton for December in Miami.