Leaders of the Western Hemisphere's 34 democracies overlooked political and economic uncertainties Sunday and forged ahead with a bold plan for hemispheric duty-free trade by 2005. They directed negotiations to begin in September.

The talks will start in Miami and finish in Mexico City."Here in Santiago the ground has been broken for the largest free trade area in history," Chilean President Eduardo Frei told the concluding summit session. The combined economies total $9 trillion and encompass nearly 800 million people.

The assembled leaders, at the second Summit of the Americas, called for specific accomplishments, such as standardized customs forms, as early as 2000.

"Our journey from Miami to Santiago was . . . from words to deeds," said President Clinton, who presided over the first summit meeting in Miami in 1994. "Today we launch comprehensive negotiations for a Free Trade Area of the Americas."

That's the formal name that has been given to the proposed zone, reaching from Alaska to Cape Horn, where virtually all existing tariffs and duties would be eliminated.

Clinton conceded the work would be difficult and said that democracy was still fragile in some parts of the hemisphere. "We must continue to stand fast for democracy . . . with no holdouts and no back-sliders."

The accord only made passing reference to the biggest obstacles: Clinton's failure to win fast-track negotiating powers from Congress and a new skittishness in Latin America in the aftermath of Asia's financial troubles, which tightened export and credit markets.

"We are confident the Free Trade Area of the Americas will improve the well-being of all our people, including economically disadvantaged populations within our respective countries," a joint statement from the leaders said.

Communist Cuba, the only country in the hemisphere not invited to Santiago, remained a point of contention.

"There is a country that is missing," Brazilian President Fernando Henrique Cardoso told the concluding session. "They have a social commitment. They are very much concerned with education and with health care. Why should we not make steps toward democracy there?"

The leaders signed the pact one by one. As each country's name was called, the leader walked down a long red carpet to the front of the ornate chamber of the Foreign Min-istry, sat and signed the document.

Clinton fumbled with his translation transmitter periodically throughout the ceremony. It was unclear if he could understand everything the other leaders were saying, although at some points he nodded along in agreement.

Canadian Prime Minister Jean Chretien, who will host the next Summit of the Americas, probably in 2000, said economic integration was now an established fact.

"My colleagues, let us tell our people, let us tell the world, loud and clear, once and for all, as we turn the page to a new century, that the era of building walls is over," Chretien said.

The assembled leaders also embraced a list of action items on other subjects, from education and protecting the environment to fighting poverty and dealing with year 2000 computer problems.

They pledged to erradicate measles by 2000, to assure every child at least an elementary school education by 2010 and to make it easier for poorer people, particularly women, to own property and start small businesses.

"We have committed ourselves to a second state of reforms designed to bring the benefits of freedom and free enterprise to ordinary citizens throughout the Americas," Clinton said.

The leaders made no change in the overall timetable for free trade adopted at the Miami summit but went a step further by stating that a trade negotiations committee will convene by June 30, with actual negotiating to start by Sept. 30.

Negotiations will begin in Miami with nine initial negotiating groups: market access, investment, services, government procurement, dispute settlement, agriculture, intellectual property rights, subsidies and "dumping," the practice of selling products at below-market prices to win market share.

The talks will then move to Panama and finish in Mexico City. Initially, Canada will oversee the negotiations, then Argentina, then Equador and finally the United States jointly with Brazil, according to Sunday's announcement.

In their joint statement, the leaders noted that some countries in the region, including Mexico, had experienced financial problems since the 1994 summit. But they said the overall trend in the hemisphere "has been one of faster economic growth, lower inflation, expanded opportunities and confidence in facing the global marketplace."

"New partnerships have been formed and existing ones strengthened and expanded," the statement said, referring to new trading alliances that have sprouted within the Americas while awaiting U.S. action.

That was the only reference to U.S. foot-dragging on expanded trade in an otherwise upbeat 34-page document.

U.S. officials made a bold show of dismissing the current lack of fast-track negotiating authority, although conceded that protracted ab-sence of it could spell problems down the road.

National Security Adviser Sandy Berger said he was not worried about criticism over the pace of fast track - nor was he troubled by criticism from some quarters on continued U.S. opposition to allowing Cuba to participate in the talks.

"Listen, there are some realities that exist," Berger told reporters. "Of $9 trillion of this hemisphere's economy, we're $7 trillion. . . . I think America's leadership has not been stronger in this hemisphere in over 30 years."