The leaders of the 34-nation Summit of the Americas in Chile concluded their meeting by signing a broad agreement, that among other things, sets forth the groundwork for a hemisphere-wide free trade zone. Charles Krause reports.

PRESIDENT CLINTON: The poverty throughout the hemisphere is still too high. Income disparity is too great, civil society too fragile, justice systems too weak. Too many people still lack the education and skills necessary to succeed in the new economy. In short, too few feel change working for them. Therefore, with democracy and free markets now in place we must vigorously launch a second generation of reforms for the next generation of Americans.

CHARLES KRAUSE: After a welcoming speech by President Frei the heads of state went into closed session. Sunday afternoon they emerged to sign a plan of action and a final communique called The Declaration of Santiago. To save time, the heads of state were called two by two. So President Clinton signed the document with Peru's president, Alberto Fujimori. The 34-page agreement covers a wide ranging set of issues.

On trade, President Clinton and the 33 other heads of state committed themselves to a specific timetable for negotiating a hemisphere-wide free trade agreement by the year 2005. On the drug issue they vowed to lend new impetus to the fight against drug trafficking and also to begin negotiations to establish a new multilateral process to certify that each government is doing its part. On education they promised that free primary schooling would be available to every child in the hemisphere by the year 2010; also, that quality secondary education would be available to 3/4 of the hemisphere's students within the same 12-year period. The summit participants also committed themselves to reducing poverty, improving the environment, and strengthening democracy and respect for human rights throughout the hemisphere.

But clearly, the centerpiece of the summit was the timetable for negotiating the new free trade agreement to be called the FTAA, or Free Trade Area of the Americas, to be negotiated over the next seven years. It will create the largest free trade zone in the world that's stemming from Alaska to Tierra Del Fuega. But hanging over those future negotiations is the president's failure so far to obtain congressional approval for fast track, the authority that the president needs to negotiate free trade agreements that Congress cannot then amend. For nearly four years Chile's entry into the North American Free Trade Agreement called NAFTA has been blocked, because without fast track, the negotiations have been stalled. During the summit many of the Latin and Caribbean leaders expressed concern that the president's failure to obtain fast track for Chile could jeopardize the prospects for the hemisphere-wide FTAA. On several occasions over the weekend the president assured them that would not be the case.

PRESIDENT CLINTON: Let me reaffirm to all my colleagues the United States may not yet have fast track legislation but we will. And I assure that our commitment to the free trade area of the Americas will be in the fast lane of our concerns.

CHARLES KRAUSE: Yesterday, we spoke to the President's special counsel for Latin America, Thomas "Mack" McLarty.

CHARLES KRAUSE: Mr. McLarty, thank you very much for joining us. Let's go first to the issue of fast track and trade. If the president couldn't get Congress to approve fast track for Chile, how is he going to get Congress to approve fast track for the free trade agreement for all of the Americas?

MACK McLARTY, Special Envoy to the Americas: I think the dynamics are changing a bit in terms of the fast track legislation, and I would note that we did have a majority in the Senate--almost a unanimous agreement among the governors and both of those majorities were on a bipartisan basis--regrettably, we fell a few votes short in the House. But I think this is a temporary setback, and we're confident that the Congress will give the president the tools he needs to complete his important work.

CHARLES KRAUSE: Do you have a strategy? Do you have a timetable for this effort?

MACK McLARTY: Charles, yes, we do. The president, of course, spoke about his commitment to the fast track negotiating authority in the State of the Union. The fact that we will have a very comprehensive, credible launch of the Free Trade Area negotiations for a hemispheric trade pact we believe will give energy and continued momentum to the process. In terms of the timing, Charles, I think we would like it sooner, rather than later. Whether that will be this year or next I don't think we are in a position at this point to have a bipartisan consensus developed yet, but we are working diligently in that regard. And I believe we will be successful.

CHARLES KRAUSE: There has been much talk about second generation reforms here in Santiago.

MACK McLARTY: Yes.

CHARLES KRAUSE: Education, judicial reform.

MACK McLARTY: Right.

CHARLES KRAUSE: That sort of thing.

MACK McLARTY: Freedom of the press, freedom of expression.

CHARLES KRAUSE: Tell me, why are they now coming to the fore? Why have they become important?

MACK McLARTY: It's a very, I think, encouraging, positive affirmation that the first generation of reform, the movement of the region to democracy, political liberty, open and fair elections, growth and progress in the region, the region now from an economic standpoint that has tamed hyper-inflation that was such a burden, particularly to those below the poverty line, that first generation has been accomplished. But to sustain that, to strengthen that, it is absolutely essential to have a second generation of reforms. A key to inclusive growth is education, giving people the skills they need to participate in this global economy.

CHARLES KRAUSE: This morning we talked to Enrique Iglesias, president of the Inter-American Development Bank, Latin America's leading development lending institution.

CHARLES KRAUSE: From Latin America's perspective, was this summit successful?

ENRIQUE IGLESIAS, President, Inter-American Development Bank: I think it was very successful event. You see, the fact that it took place in itself, 34 countries sitting there, sharing all of the democratic values, human rights principles, all of them more or less in the same economic orientation, market economies, all of them deeply concerned with the social issues I think is very important that they did not stop talking about trade. They talked about trade; about education; about health.

All these made the meeting in itself a success. But I have been in this business for a long time, so I feel that there is another element, probably I can be a very good testimony, it is the atmosphere of a relaxed dialogue without acrimony, recriminations, and that represents I think a real change in the relation between the United States and Latin America, at least the change that I personally have lived in the last 30 years.

CHARLES KRAUSE: Are the leaders concerned, the Latin American and Caribbean leaders, concerned that President Clinton will not be able to deliver on his promise of a free trade agreement, of fast track?

ENRIQUE IGLESIAS: Look, yes, they are concerned because they think that the president was making a real effort to convince the Congress of the importance of the fast track because this is so evident, the interest from both sides, it's so evident that Latin American today is a very important market for the United States. 40 percent of each dollar we spend overall--40 cents--are spent in the United States.

This is the only region that has this sort of reciprocity. The private sector is understanding that, and it's moving. Now, I don't think that the fact that the fast track is not there should be looked as a tragedy as such.

When this initiative was launched in Miami three and a half years ago, I don't think we were prepared to enter into fast track. We need time. Chile maybe is the only country which is really ready to get into this sort of joint venture, which is to some extent, this puts the negotiations in a reasonable period of time creating the conditions for Latin America to make the necessary preparation for that.

It's not easy to join the U.S. market. It has opportunities but also risks and eventually costs. So maybe we can make out of this thing a good opportunity.