Summit Nations Agree to Create Free-Trade Zone

Embarking on what President Clinton called a “historic step,” the United States and 33 other nations of the Western Hemisphere agreed Saturday to complete complex negotiations within a decade to eliminate all tariffs and other barriers to free trade from the Arctic to Argentina.

“We believe the agreement we have made today to launch the Free Trade Area of the Americas will produce more jobs, higher incomes and greater opportunities for all of our people,” Clinton said, setting the goal of establishing a free-trade zone of unprecedented economic and geographic reach.

The agreement is the centerpiece of the weekend Summit of the Americas. It is seen as an ambitious and concrete measure that will spur liberalization of trade and boost commerce, not only in the hemisphere but around the world. It would not actually be implemented until some time beyond the target date of 2005, when the negotiations should be finished.

The summit, which ends today, is the first such gathering in 27 years. It has brought to Miami the presidents or prime ministers of every nation from Canada to Argentina. Only Cuba’s Fidel Castro is missing, but in the aftermath of the Cold War and the collapse of his Soviet allies, his absence no longer casts a shadow over such proceedings.

Even a massive demonstration by his many opponents in the Cuban expatriate community here was barely recognized during a day in which the overriding theme was Latin America’s turn toward market economies and away from the often heavy-handed state interference of the post-World War II era.

Although the U.S. embargo against Cuba was not officially a subject of discussion, presidents of three of the largest countries of Latin America--Brazil, Mexico and Colombia--suggested that dialogue rather than isolation is the best way to push for democracy in Cuba.

But Argentine President Carlos Menem said Cuba’s government “must begin an opening toward representative and pluralistic democracy” if it wishes to rejoin the hemispherical community, according to the text of his speech to the summit.

Mexican President Ernesto Zedillo emphasized his country’s traditional insistence on a policy of nonintervention, an indirect slap at the United States’ Cuba policy.

In perhaps the only other sour note that cast a pall over the summit, several Latin presidents expressed their dismay to Clinton over Proposition 187, the measure passed by California voters that denies education and other public benefits to undocumented immigrants.

Colombian President Ernesto Samper said he told Clinton that the measure “sets an abysmal precedent” in relations between Latin America and the United States that “violates a long good-neighbor tradition.”

Clinton assured the summit participants that his Administration does not support the measure, and he added that immigration policy as a whole should be reviewed, according to Panamanian officials who attended the conference.

In other steps, the participants committed themselves to banning the sale of leaded gasoline, a common cause of health-damaging lead in the bloodstream; to tackling the difficult issue of pesticide use, and to studying the “empowerment” of women and indigenous people, said Carol Browner, administrator of the Environmental Protection Agency.

The leaders also said their aides will address as a group such common scourges as drug trafficking, corruption and money laundering.

But for Clinton, the summit principally provided one more opportunity to nail down his goal of using trade as an engine to power U.S. economic growth, based on the theory that it creates markets for U.S. manufacturers, farmers and, increasingly, financial institutions.

The trade agreement that will be negotiated as a result of Saturday’s action, Clinton said, “will cover a comprehensive list of areas, from tariffs on goods, to services, to agricultural and intellectual property.”

“It is the key building block in our creation of a partnership for prosperity,” he said during a break in the talks.

In a shift from Cold War policy, the U.S. government is trying to meld foreign and economic policy, to build relationships with other nations and regions based on expanded commerce.

Thus, Clinton split with many Democratic allies last year to gain approval of the North American Free Trade Agreement. He also completed negotiations on the expansion of the General Agreement on Tariffs and Trade and agreed with the leaders of 17 other Pacific Rim nations to set a goal of eliminating tariffs among them by the year 2020.

Clinton argues that this course will open foreign markets to the products of U.S. workers, creating jobs in this country.

Critics say such an approach risks opening the United States to competition from lower-priced products, bringing pressure to hold down wages and lowering the standard of living in the United States while also leading the United States to do business with nations that allow labor and environmental practices that do not meet U.S. standards.

Senior Clinton Administration officials involved in the negotiations leading up to the agreement said Saturday that they had won reluctant support from Latin American nations for including language in the Declaration of Principles that singles out the goals of protecting the environment and protecting workers.

The officials, speaking on the condition of anonymity, said they accomplished this by holding out support for setting a specific date for negotiating the free-trade accord. While the summit endorsed that goal Saturday, there was dissension in preliminary talks, with some advocating speedier action and others initially wanting to slow down.

In the end, the U.S. team said it would be willing to go along with the goal of completing negotiations by 2005--which it had silently supported but did not want to push for fear of producing an anti-U.S. reaction--if the others would sign on to a somewhat greater emphasis on the need to protect labor and the environment from exploitation in the rush toward economic development, the officials said.

It is a sensitive political issue in the United States and among U.S. trading partners in Latin America.

Clinton is under increasing pressure from some organized labor and environmental groups, important members of his political base, to hold firmly to strict provisions in these areas.

But Republicans, about to move into the majority in the House and Senate, are pushing Clinton to advance the goal of reduced tariffs, the taxes charged on imports, and lowered import quotas with only minimum encumbrances.

Reflecting these crosscurrents, Rep. Richard A. Gephardt (D-Mo.) sent Clinton a nine-page letter Wednesday telling him that “we must not allow the Republicans to treat worker rights and environmental issues as back-seat issues.”

The issue is likely to come up early next year when the President seeks renewed authority to negotiate trade agreements on what is known as a “fast-track” basis, in which Congress can only vote to approve or disapprove the accords without amending them.

The Administration will seek such authority before beginning talks with Chile to bring the Andean nation into NAFTA, which now embraces the United States, Canada and Mexico.

Clinton is expected to announce today that negotiations with Chile will begin next year. U.S. and Chilean officials completed preliminary talks Saturday.

“Chile can be looked at as the first step forward in an effort that will eventually integrate almost all of the Americas, if not all,” Chilean Finance Minister Eduardo Aninat said in an interview.

By moving to include Chile in the pact, the United States is signaling to other Latin American nations that they can gain tariff-free access to the U.S. market one by one, without waiting for the hemisphere-wide agreement, if they emulate Chile’s creation of a strong free-market economy.

Prof. Mark Rosenberg, a Latin America specialist at Miami’s Florida International University, said the speedy acceptance of Chile as a new partner in the pact “would send a message to other countries as to what exactly they are going to have to do if they want to be like Chile.”

Colombia’s Samper, for example, said he is confident that Colombia would be “No. 2 or No. 3” to join the pact.

Times staff writers Tracy Wilkinson, William R. Long and Doyle McManus contributed to this story.