However, leaders remained divided over how best to combat spreading poverty in the region, and the United States failed to have an anti-corruption clause included in the summit's final statement.
The free trade area, which would stretch from Alaska to Argentina, would be the world's largest, with a population of about 800 million and a $13 trillion gross domestic product.
But as the two-day summit closed, Argentine President Nestor Kirchner, lashed out at the US-backed plan, arguing "not just any Free Trade Area of the Americas will do."
"The deal should acknowledge economic differences. It cannot be a one-way street and it cannot be imposed," Kirchner said.
Brazil, South America's largest economy, and key US oil supplier Venezuela fought to keep free trade off the summit agenda.
But after an intense dispute, leaders agreed in a declaration to endorse plans to finish negotiating the proposed Free Trade Area of the Americas by January 2005.
Some leaders warned the accord would not be easy.
"International trade can be powerful factor in development. But it should be just and balanced, benefiting everyone equally," Brazil's President Luiz Inacio Lula da Silva said.
Some Latin nations fear that free trade cannot solve social problems that undercut their stability and that it might not help the millions of poor fast enough.
The leaders also agreed on measures aimed to combat poverty, such as boosting multilateral credit for small businesses. They did the same at their last summit, and poverty in the region has increased since.