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MONTERREY, Mexico (AP) _ Laughing, President Bush and his counterparts from Mexico and Canada shared a warm three-way handshake as they exchanged ideas Thursday evening on what Bush called ``neighborhood'' concerns. They renewed their commitment to see free trade throughout the Western Hemisphere.

Mexican President Vicente Fox and Canadian Prime Minister Jean Chretien met privately with Bush for 45 minutes as he opened his participation here in a U.N. summit on economic development in the world's poorest regions.

``The best foreign policy is a foreign policy that insists that our own neighborhood be prosperous and peaceful and democratic,'' Bush said on a quick stop in Texas before coming here.

White House press secretary Ari Fleischer described Bush's meeting with Chretien and Fox as a ``general discussion'' of trade, energy policy and border security _ and not a forum for making decisions or sealing agreements.

But the three leaders did agree that the North American Free Trade Agreement has been a success and a new free trade pact should be negotiated for the entire hemisphere, Fleischer said, describing the closed-door meeting to reporters afterward.

Fox's press office issued its own statement, saying the leaders shared their vision of a ``gradual convergence of these countries toward values and interests which will give a new sense of community in North America.''

Fleischer said they discussed natural gas pipelines in Canada, and a U.S.-Canadian timber dispute. The United States claims that Canada is unfairly exporting softwood lumber in U.S. markets, taking advantage of government subsidies. Despite the leaders' discussion here, the dispute remains ``at the worker-bee level'' in talks in Washington, Fleischer said.

On border security, the leaders agreed to work together on ``smart borders'' utilizing high technology to speed commerce and visitors among the countries while also choking off the movement of contraband and criminals.

Also on Thursday, Bush asked Congress, as part of his $27 billion emergency spending request, for another $5 billion to be ``spent on our airports and on our borders, to make sure Americans are more secure and more safe than ever before.''

``I want this border to be modern; I want it to have the very best technology,'' Bush said at a rally in El Paso, Texas.

Fleischer said Bush described for Chretien and Fox the inspection gizmos he watched in action at an El Paso border crossing.

At the Cordova Bridge to Juarez, Mexico, Bush poked around cargo trucks and a motorcoach recently seized by agents after high-tech density meters and X-rays detected secret compartments containing drugs.

Bush, Chretien and Fox _ a trio that has jokingly called themselves the ``Three Amigos'' _ next meet again in October, also in Mexico, at the Asia-Pacific Economic Cooperation Summit in Los Cabos.

The White House announced that the Bush administration reached a 22-point border agreement with Mexico much like the one Homeland Security Director Tom Ridge signed with Canada in December.

A list of goals, planned technology studies and information-sharing commitments, the U.S.-Mexico agreement to be signed in Monterrey on Friday is designed to tighten border security after the Sept. 11 terror attacks while also preventing border traffic jams and other delays to trade.