The drive to create a free-trade zone in the Western Hemisphere shifted into second gear today as trade ministers from 34 countries agreed to paper over differences on contentious issues and take immediate steps to make it easier to move goods across their borders.

Although the ministers fell short of their goal of hammering out a detailed framework for a Free Trade Area of the Americas (FTAA) agreement, they said they made enough progress to commit themselves to coming up with a draft treaty by the spring of 2001.

"Eighteen months ago, we were nowhere in this process," Richard Fisher, the deputy U.S. trade representative, declared at the end of the two-day meeting. "I'd call this pretty good progress."

To get even that far, some larger countries agreed to consider giving smaller and less-developed countries of the hemisphere more time to reduce tariffs, open their economies to foreign investment, and adopt effective laws in such areas as antitrust, patent protection, bank regulation and prohibitions on corrupt business practices.

At the same time, less-developed countries agreed to inclusion of labor and environmental standards in the next round of negotiations. While U.S. and Canadian officials consider these essential if any treaty is to be accepted by their voters, Mexico and a number of other countries have resisted including them in the negotiating framework or giving labor and environmental groups any official role in the FTAA process.

In a show of unity, all 34 countries committed themselves to elimination of agricultural subsidies at world trade talks set to begin in Seattle later this month, setting the stage for a major confrontation with the European Union, which has been reluctant to dismantle its elaborate farm support programs.

The "business facilitation" steps announced today require countries to make it easier for business travelers to bring samples across borders, to expedite the flow of overnight express packages and to simplify customs checks for shipments of low value. The countries also agreed to adopt a common coding system for cross-border shipments and compatible computer software to allow shippers and customs officials to communicate more easily.

The goal of establishing a hemispheric free-trade zone by 2005 was endorsed by the heads of state in Miami in December 1994. Business leaders this week criticized the slow pace of the talks.

One drag on negotiations is the fact that the biggest player--the United States--comes to the table without the "fast-tracking" negotiating authority viewed as essential if any treaty is to get through the Congress. Until U.S. negotiators have the legal and political backing to bargain seriously on such things as eliminating protective barriers for its citrus and textile industries, officials from other countries say they will be unwilling to put their own best offers on the table.

Also slowing progress is the desire of some of the major South American countries--Argentina, Brazil and Paraguay--to strengthen their own trade ties and boost the efficiency of their manufacturing sector before subjecting them to full competition from the United States and Canada.

The only country in the hemisphere not represented in the FTAA process is Cuba, largely at the insistence of the United States. But in a speech here to business leaders this week, Thomas J. Donohue, president of the U.S. Chamber of Commerce, said U.S. sanctions against Cuba had not worked, and he urged that trade and investment be used as levers for political and economic reform on the island.