Hemisphere’s Leaders Gather to Boost Trade : Summit: Immigration, drug trafficking and Cuba also may be discussed at 3-day meeting in Miami.

With free trade their mantra, President Clinton and the leaders of 33 other countries began gathering in Miami on Thursday for an unprecedented summit aimed at tearing down barriers to commerce throughout the Western Hemisphere.

The Summit of the Americas, the first such regional meeting in 27 years and the largest ever, opens formally today with speeches, toasts and much fanfare. President Carlos Menem of Argentina trumpeted the summit as “perhaps one of the most transcendental events in recent years in our continent.”

Although tricky issues such as immigration, drug trafficking and Cuba are expected to find their way into the three days of discussions, the meeting will focus principally on trade. U.S. officials said the strength of the summit rests on a “Plan of Action,” copies of which circulated Thursday, that outlines concrete steps to larger goals, including an agreement to freeze illicit money-laundering assets and establish protections for migrant workers.

Clinton Administration officials sought to portray the meeting as a major achievement and a natural next step following trade agreements with Canada and Mexico and the Pacific Rim, as well as the hard-fought revision this month of the General Agreement on Tariffs and Trade (GATT).

Others are less optimistic.

“I think high and false expectations are being created,” Peruvian President Alberto Fujimori said. “I don’t think we are going to come out of the meeting with a stronger America and measures that benefit the population.”

Clinton, who arrived in Miami on Thursday night, will meet with leaders of a vastly changed Latin America, one eager to open its markets and welcome foreign investment, but still unable to better the lives of millions of poor. With the end of the Cold War and the fall or retirement of military dictatorships and leftist guerrilla movements, economic issues have replaced security concerns.

Emerging from the “Lost Decade” of debt crisis and civil war, Latin America is enthusiastically seeking a new relationship of interdependence and cooperation with the United States.

Still, many Latin and Caribbean officials feel neglected by the Clinton Administration, which has exhibited little interest in the region and proposed no policy initiatives.

When the summit ends Sunday, the 34 participating countries will have agreed on establishing a new free-trade zone that stretches from Canada to Chile. They have tentatively agreed to finish the negotiations for such a zone by the year 2005, according to a draft document circulated earlier in the week.

The treaty would eliminate all tariffs and other barriers to trade throughout the hemisphere, a region that encompasses about 750 million people and wields more economic power than the European Union.

But reflecting the very different agendas that the countries have, there was last-minute renegotiation over the 2005 target date, diplomats said Thursday, and failure altogether to establish a deadline for actually creating the free-trade zone.

“If we can produce the founding act (of the zone) much earlier, it will be good for this great community of America,” Menem said.

Argentina had pressed for a commitment to reach a hemispheric trade pact by 2000 and to set the year 2015 as the deadline for implementation. But Mexico, already the beneficiary of the North American Free Trade Agreement (NAFTA), resisted, as did Brazil, a diplomat familiar with the negotiations said.

“All the countries want integration,” the diplomat said. “What is in discussion are the mechanisms. It’s not that Mexico and Brazil didn’t want integration. But they didn’t want dates.”

The United States also reportedly resisted agreeing to a date, backing off in part to assuage the fears of Latin participants that the summit would amount to little more than rhetoric.

“If we don’t work with our hemispheric neighbors in building this relation on trade with the Americas, then we’re going to find that the Japanese and the Europeans are going to work to be their partners, and they will be the ones that will be creating jobs back home, instead of this country,” said Treasury Secretary Lloyd Bentsen. “So what we’re looking at is what we can do in reshaping this hemisphere over the next 10 years.”

The emphasis on trade underscores the dramatic changes to Latin America during the last decade. Once-centralized, protectionist economies saddled with money-losing, state-controlled enterprises have given way to open, free-market economies bent on privatization and commerce. Latin America has become the fastest-growing foreign market for U.S. goods and services and supports about 3 million U.S. jobs, according to Clinton Administration figures.

Political transition has accompanied the economic transition. In contrast to the years when military strongmen ran things, all but two of the presidents and prime ministers attending the summit reached their positions through popular elections.

The two exceptions, however, underscore some of the festering problems that undermine Latin American stability: Guatemala’s Ramiro de Leon Carpio was named president by the National Congress after his predecessor seized dictatorial powers; and Brazil’s Itamar Franco, who was vice president, stepped up to the top job after his predecessor was indicted on corruption charges.

The most serious threat to stability, analysts say, is widespread, deep poverty. Latin America has the world’s most skewed income distribution. From Central America to Brazil, the gap between rich and poor has widened in the last 10 years despite overall economic growth.

Beyond trade, other issues will be raised:

* Venezuela’s President Rafael Caldera will call for tougher regional extradition laws to aid in the battle against corruption, while Colombia’s President Ernesto Samper and Ernesto Perez Balladares of Panama want tighter drug-money laundering accords.

* Argentina’s Menem will seek to introduce Cuba to the talks. Clinton did not invite Cuban leader Fidel Castro, but with the summit taking place in Miami, home to a vociferous Cuban exile community, the subject is unavoidable.

Menem, who was honored Thursday by the exiles, is expected to press the United States to lift the embargo against Cuba while demanding simultaneous steps by Cuba toward democracy.

“I believe that to participate in the process of integration, (Cuba) should first democratize itself,” Menem said in an afternoon press conference. “To the extent that Cuba advances in the process of democratization, it will have more participation.”

* Hoping to press the issue of immigration, Mexico and the Central Americans want a formal condemnation of California’s Proposition 187, which denies education and other public services to the children of illegal immigrants.

* Argentina, a major grain exporter, also is expected to push for an end to U.S. subsidies on agricultural exports that it says compete unfairly on world markets.

Chile, with one of the region’s healthiest economies, may be the government that comes away with the most concrete benefits. Clinton Administration officials have hinted that Chile will be invited to join NAFTA at the end of the summit.

Rather than working to expand NAFTA, Brazil prefers to concentrate efforts on its own free-trade agreement with Argentina, Paraguay and Uruguay. Called Mercosur, the South American group will begin zero-tariff trade Jan. 1.

Hector Assael, an economist with the U.N. Economic Commission for Latin America and the Caribbean, said the most likely scenario for hemispheric free trade seems to be slow and simultaneous expansion of NAFTA in the north and Mercosur in the south. Whether the two big groups will ever converge is not certain, he said.

Times staff writer James Gerstenzang contributed to this report.