U.S. OFFICIALS PUSH FREE TRADE AT AMERICAS CONFERENCE

CORAL GABLES, Fla. - U.S. officials called for a Free Trade Association of
the Americas encompassing the Western Hemisphere's 34 democratic countries
during a conference Tuesday on the state of Latin American economies.

Deputy Treasury Secretary Kenneth W. Dam told the Americas Conference that
hemisphere-wide free trade would benefit Latin American economies. It would
be similar to the North American Free Trade Agreement, which governs trade
between the United States, Canada and Mexico.

"Our top priority for the countries of the hemisphere is to generate growth
and raise productivity," Dam said, adding that "most countries are not
growing at their potential."

The two-day conference was attended by business leaders from throughout the
hemisphere. Presidents Gustavo Noboa of Ecuador and Alejandro Toledo of
Peru had told the conference Monday that fair but open trade policies are
essential for recovery.

Also Tuesday, Colombia's President Alvaro Uribe told the conference through
closed-circuit television that the United States should restart drug
interdiction flights that were suspended in April 2001. Without them, he
said, the drug war is being lost.

"Despite all our efforts, it has only been possible to seize 20 percent of
the drugs that leave Colombia," he said.

He also called on international lending organizations to help Colombia.

"This is a great opportunity for the multilateral (banks) to show the Latin
American community that a country that fulfills its obligations like
Colombia is helped generously in its moment of difficulty," he said.

Florida Gov. Jeb Bush was expected to address the conference later Tuesday.

Dam said told the business leaders that economic difficulties in Argentina
and Brazil have continued to contribute to the economic woes of neighboring
countries.

Dam said that he had "reasons to be encouraged about Argentina," but warned
that International Monetary Fund loans to Brazil would be granted only "if
sound policies are observed," which would include fiscal responsibility and
changes to the tax code.

Brazil's currency has lost about 40 percent of its value and investors
remain jittery that the country might default on its loans, especially if
former union leader Luiz Ignacio Lula da Silva - popularly known as Lula -
is elected.

"We will work with whoever is elected in a democratic election. That's been
our policy and that will be our policy. If Mr. Lula does win, we will work
with him," Dam said. "We will work with a democratically elected government
of Brazil in a serious, hardheaded, friendly way."

Otto Reich, the State Department's top diplomat for the Western Hemisphere,
agreed that the United States would work with the next Brazilian government
to solve its economic problems.

"It is extremely important for the hemisphere to have a democratic,
prosperous Brazil," Reich said.

Asked about whether the United States had any plans if Brazil defaults on
its loans, Reich said: "You have to look at contingencies," but refused to
elaborate.

"Our ability to influence events is not as large as people as people think
it is, especially when you're dealing with a country as large as Brazil,"
Reich said.

Dam said that he was aware of the Brazilian Central Bank's decision to
raise interest rates Monday from 18 percent to 21 percent in an effort to
bolster the weakening currency and to ease inflationary pressures.

"We believe they know what they're doing, and it's really their decision,"
Dam said.