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1980 Treaty of Montevideo
Instrument Establishing the Latin American Integration Association (ALADI)
Montevideo, August 1980
(Includes Resolutions CM/1 to 7 adopted by the LAFTA Council of Ministers of Foreign Affairs)
The 1980 Montevideo Treaty undertakes to further the process of economic integration started in the Latin American region two decades ago and provides for the creation of the Latin American Integration Association (LAIA), in place of the Latin American Free Trade Association (LAFTA) established by the Montevideo Treaty concluded in 1960.
This new juridical instrument was signed on 12 August 1980, at Montevideo (Uruguay), by the Ministers of Foreign Affairs of eleven Latin American states, namely:
Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay and Venezuela.
The Secretariat has prepared the following English version of the 1980 Montevideo Treaty and of the supplementary resolutions adopted by LAFTA Council of Ministers on August 1980 in order to meet information requests received from abroad. It should be emphasized, however, that the present translation has no legal authority whatsoever, only the Spanish and Portuguese texts being authentically valid.
1980 MONTEVIDEO TREATY
Montevideo, August 1980
The Governments of the Argentine Republic, the Republic of Bolivia, the Federative Republic of Brazil, the Republic of Chile, the Republic of Colombia, the Republic of Ecuador, the United Mexican States, the Republic of Paraguay, the Republic of Peru, the Eastern Republic of Uruguay, and the Republic of Venezuela,
INSPIRED by the purpose of strengthening the friendship and solidarity links between their peoples.
PERSUADED that economic regional integration is one of the principal means for the Latin American countries to speed up their economic and social development process in order to ensure better standards of life for their peoples.
DECIDED to renew the Latin American integration process and establish objectives and mechanisms consistent with the region's real situation.
CERTAIN that the continuation of such process requires taking advantage of the positive experience obtained in the implementation of the Montevideo Treaty dated 18 February 1960.
AWARE that it is necessary to ensure a special treatment for countries at a relatively less advanced stage of economic development.
WILLING to encourage the development of solidarity and cooperation ties with other countries and integration areas of Latin America in order to promote a process converging towards the establishment of a regional common market.
CONVINCED of the need to contribute towards obtaining a new scheme of horizontal cooperation between developing countries and their integration areas, inspired by the principles of international law regarding development.
BEARING IN MIND the decision adopted by the Contracting Parties to the General Agreement on Tariffs and Trade whereby regional or general agreements may be drawn up between developing countries in order to mutually reduce or eliminate obstacles to their reciprocal trade.
THEY HEREBY AGREE to sign the present Treaty which, concurrent with the provisions herein contained, shall substitute the Treaty instituting the Latin American Free Trade Association.
CHAPTER I: Objectives, duties and principles
Article 1: By the present Treaty the Contracting Parties pursue the integration process leading to promote the harmonious and balanced socio-economic development of the region, and to that effect they hereby institute the Latin American Integration Association (hereafter referred to as the "Association"), with headquarters in the city of Montevideo, Eastern Republic of Uruguay.
The long-term objective of such process shall be the gradual and progressive establishment of a Latin American common market.
Article 2: The rules and mechanisms of the present Treaty, as well as those which may be established within its framework by member countries, shall have as their purpose the performance of the following basic duties of the Association: promotion and regulation of reciprocal trade, economic complementation, and development of economic cooperation actions encouraging market expansion.
Article 3: In the implementation of the present Treaty and the evolution towards its final objective, member countries shall bear in mind the following principles:
CHAPTER II: Mechanisms
Article 4: In order to fulfill the basic duties of the Association set forth in article 2 of the present Treaty, member countries hereby establish an area of economic preferences, comprising a regional tariff preference, regional scope agreements, and partial scope agreements.
First section - Regional tariff preference
Article 5: Member countries shall reciprocally grant a regional tariff preference to be applied with reference to the level in force for third countries and be subject to the corresponding regulation.
Second section - Regional scope agreements
Article 6: Regional scope agreements are those in which all member countries participate. They shall be drawn up within in framework of the objectives and provisions of the present Treaty, and may refer to the same matters and include those instruments foreseen for the partial scope agreements provided for in the third section of the present chapter.
Third section - Partial scope agreements
Article 7: Partial scope agreements are those wherein all member countries do not participate. These agreements shall tend to create the conditions necessary to deepen the regional integration process by means of their progressive multilateralization.
Rights and obligations to be established in partial scope agreements shall exclusively bind the signatory member countries or those adhered thereto.
Article 8: Partial scope agreements may refer to trade, economic complementation, agriculture, trade promotion, or adopt other modalities concurring with article 14 of the present Treaty.
Article 9: Partial scope agreements shall be governed by the following general rules:
Article 10: Trade agreements are exclusively aimed towards trade promotion among member countries, and shall be subject to the specific rules to be established for that purpose.
Article 11: Economic complementation agreements are aimed, among other objectives, to promote maximum utilization of production factors, stimulate economic complementation, ensure equitable conditions for competition, facilitate entry of products into the international market, and encourage the balanced and harmonious development of member countries.
These agreements shall be subject to the specific rules to be established for that purpose.
Article 12: Agricultural agreements are aimed to promote and regulate intraregional trade of agricultural and livestock products. They shall contemplate flexibility elements bearing in mind the participating countries' socio-economic characteristics of production. These agreements may refer to specific products or groups of products, and may be based on temporary, seasonal, per quota or mixed concessions, or on contracts between State or para-State organizations. They shall be subject to the specific rules to be established for that purpose.
Article 13: Trade promotion agreements shall refer to non-tariff matters and tend to promote intrarregional trade flows.
They shall be subject to the specific rules to be established for that purpose.
Article 14: Member countries may establish, through the corresponding regulations, specific rules to conclude other modalities of partial scope agreements.
For this purpose, they shall take into consideration, among other matters, scientific and technological cooperation, tourism promotion and preservation of the environment.
CHAPTER III: System in favour of countries at a relatively less advanced stage of economic development
Article 15: Member countries shall establish conditions favouring participation of countries at a relatively less advanced stage of economic development in the economic integration process, based on the principles of non-reciprocity and community cooperation.
Article 16: For the purpose of ensuring them an effective preferential treatment, member countries shall establish market opening as well as set up programs and other specific forms of cooperation.
Article 17: Actions favouring relatively less developed countries shall be concluded through regional scope and partial scope agreements.
In order to ensure the effectiveness of such agreements, member countries shall execute negotiated rules concerning preservation of preferences, elimination of non-tariff restrictions and application of safeguard clauses in justified cases.
First section - Regional scope agreements
Article 18: For each relatively less developed country, member countries shall approve negotiated lists of preferably industrial products originating from each relatively less developed country, for which total elimination of customs duties and other restrictions shall be accorded, without reciprocity, by all other member countries of the Association.
Member countries shall set up the necessary procedures to achieve progressive extension of the respective liberalization lists. Corresponding negotiations may be carried out when deemed convenient.
At the same time, member countries shall endeavour to set up effective compensation mechanisms to take care of negative effects which might influence intraregional trade of the relatively less developed land-locked countries.
Second section - Partial scope agreements
Article 19: Partial scope agreements negotiated by the relatively less developed countries with other member countries shall conform, wherever pertinent, with the provisions contained in articles 8 and 9 of the present Treaty.
Article 20: In order to encourage effective and collective cooperation in favour of relatively less developed countries, member countries shall negotiate Special Cooperation Programs with each one of them.
Article 21: In order to facilitate utilization of tariff cuts, member countries may set up cooperation programs and actions in the fields of preinvestment, financing and technology, mainly directed towards supporting the relatively less developed countries, with special regard, among them, to land-locked countries.
Article 22: Notwithstanding the proceeding articles, treatments in favour of relatively less developed countries may include collective and partial cooperation actions calling for effective mechanisms meant to compensate the disadvantageous situation faced by Bolivia and Paraguay due to their land-locked location.
Provided that criteria referred to gradual timing are adopted within the regional tariff preference referred to in article 5 of the present Treaty, attempts shall be made to preserve the margins granted in favour of land-locked countries by means of cumulative tariff cuts.
At the same time, attempts shall be made to establish compensation formulae, both as regards the regional tariff preference when deepened, and regional and partial scope agreements.
Article 23: Member countries shall endeavour to grant land-locked countries facilities to establish free zones, warehouses or ports and other administrative international transit facilities in their territories.
CHAPTER IV: Convergence and cooperation with other Latin American countries and areas of economic integration
Article 24: Member countries may establish multilateral association or relationship systems encouraging convergence with other countries and areas of economic integration of Latin America, including the possibility of agreeing with these countries or areas the establishment of a Latin American tariff preference.
Member countries shall in due course regulate the characteristics of these systems.
Article 25: Likewise, member countries may draw up partial scope agreements with other Latin American countries and areas of economic integration, in accordance with the various modalities foreseen in the third section of chapter II of the present Treaty, and under the terms of the respective regulative provisions.
Notwithstanding the above, these agreements shall be subject to the following rules:
CHAPTER V: Cooperation with other areas of economic integration
Article 26: Member countries shall undertake the actions necessary to establish and develop solidarity and cooperation links with other integration areas outside Latin America, through the Association's participation in horizontal cooperation programs carried out at international level, thus implementing the basic principles and commitments adopted within the context of the Declaration and Action Program on the establishment of a New International Economic Order and of the Charter of Economic Rights and Duties of States.
The Committee shall adopt adequate measures to facilitate compliance with the objectives set forth.
Article 27: At the same time, member countries may draw up partial scope agreements with other developing countries or respective economic integration areas outside Latin America, following the various modalities foreseen in the third section of chapter II of the present Treaty, and under the terms of the pertinent regulative provisions.
Notwithstanding the above, these agreements shall be subject to the following rules:
CHAPTER VI: Institutional organization
Article 28: The political bodies of the Association are:
Article 29: The technical body of the Association is the General Secretariat (referred to as the "Secretariat" in this Treaty).
Article 30: The Council is the supreme body of the Association and shall adopt whatever decisions may correspond to the higher governing policy of the economic integration process.
The Council shall have the following powers:
Article 31: The Council shall be composed of the Ministers of Foreign Affairs of the member countries. However, when in some countries the competence of integration matters is assigned to a Minister or Secretary of State other than the Minister of Foreign Affairs, member countries may be represented at the Council, with full powers, by the respective Minister or Secretary.
Article 32: The Council shall meet and take decisions with the presence of all member countries.
The Council shall meet when convened by the Committee.
Article 33: The Conference shall have the following powers:
Article 34: The Conference shall be composed of Plenipotentiaries of member countries.
The Conference shall hold regular sessions every three years at the request of the Committee. It shall also meet at any other time in extraordinary session, when convened by the latter to deal with questions of its specific competence.
The Conference shall meet and take decisions with the presence of all member countries.
Article 35: The Committee is the permanent body of the Association and shall have the following powers and duties:
Article 36: The Committee shall be composed of a Permanent Representative of each member country with the right to one vote.
Each Permanent Representative shall have a Deputy.
Article 37: The Committee shall meet and adopt resolutions with the presence of two thirds of the member countries' Representatives.
Article 38: The Secretariat shall be headed by a Secretary-General and composed of technical and administrative staff.
The Secretary-General shall hold office for a period of three years and may be re-elected for an equal term.
The Secretary-General shall act in such capacity with respect to all the political bodies of the Association.
The Secretariat shall have the following powers and duties:
Article 39: The Secretary-General shall be appointed by the Council.
Article 40: In the performance of their duties, the head of the technical body, as well as the technical and administrative staff, shall not seed or receive instructions from any Government or national or international organizations. They shall refrain from any attitude not consistent with their character as international officers.
Article 41: Member countries pledge themselves to respect the international nature of the duties of the Secretary-General and Secretariat staff or of its engaged experts and consultants, and to abstain from influencing them in the performance of their duties.
Article 42: Auxiliary bodies shall be established for consultation, assessment and technical support. In particular, one body shall be set up composed of officers responsible for the integration policy of member countries.
At the same time, consultative auxiliary bodies shall be set up composed of representatives of the various sectors of economic activity of each one of the member countries.
Article 43: The Council, the Conference and the Committee shall adopt their decisions by the affirmative vote of two thirds of the member countries.
Decisions on the following matters excepted from this general rule shall be adopted by a two-thirds affirmative vote, provided there is no negative vote:
Abstention shall not mean a negative vote. Absence at the time of voting shall be interpreted as abstention.
The Council may eliminate subjects from this list of exceptions by the affirmative vote of two thirds of the member countries, provided there is no negative vote.
CHAPTER VII: General provisions
Article 44: Any advantages, favourable treatments, franchises, immunities and privileges which member countries apply to products originating from or bound to any other member country or non-member country, pursuant to decisions or agreements not foreseen in the present Treaty or the Cartagena Agreement, shall be immediately and unconditionally extended to the other member countries.
Article 45: Any advantages, favourable treatments, franchises, immunities and privileges already granted or to be granted under agreements between member countries or between these and third countries to facilitate border traffic shall be exclusively applicable to the countries which sign or may have signed them.
Article 46: As regards taxes, charges and other internal duties, products originating from the territory of a member country shall be entitled within the territory of the other member countries to a treatment not less favourable than that applied to similar national products.
Member countries shall adopt such steps as may be required to comply with the preceding provision, in accordance with their respective National Constitutions.
Article 47: In the case of products included in the regional tariff preference or in regional or partial scope agreements which are not produced or will not be produced in substantial quantities in its territory, each member country shall endeavour to avoid that taxes or other internal measures applied result in annulment or reduction of any concession or advantage obtained by any member country as a result of the respective negotiations.
If a member country considers itself at a disadvantage by the measures contained in the preceding paragraph, it may resort to the Committee so that the situation raised may be examined and pertinent recommendations issued.
Article 48: Within the territory of other member countries, capitals originating from member countries shall have the right to a treatment not less favourable than that granted to capitals coming from any other non-member country, notwithstanding the provisions set out in agreements which might be concluded on this matter by member countries under the terms of the present Treaty.
Article 49: Member countries may establish supplementary rules on trade policy regulating, among other matters, the application of non-tariff restrictions, a system of origin, the adoption of safeguard clauses, export promotion systems and border traffic.
Article 50: No provision under the present Treaty shall be interpreted as precluding the adoption and observance of measures regarding:
Article 51: Products imported and exported by any member country shall have the right to free transit throughout the territory of the other member countries, and be exclusively subject to payment of charges normally applicable for services rendered.
CHAPTER VIII: Legal status, immunities and privileges
Article 52: The Association shall be endowed of complete legal status and specially of the capacity:
Article 53: Representatives and other diplomatic officers of member countries accredited before the Association, as well as international officers and advisers of the Association, shall be endowed of diplomatic immunities and privileges and such other rights necessary for exercising their duties within the territory of member countries.
Member countries hereby pledge themselves to draw up within the shortest possible term an agreement aimed at regulating the contents of the proceeding paragraph, wherein such privileges and immunities shall be defined.
The Association shall draw up an agreement with the Government of the Eastern Republic of Uruguay in order to determine the privileges and immunities to which the Association, its bodies and its international officers and advisers shall be entitled.
Article 54: The legal status of the Latin American Free Trade Association established by the Montevideo Treaty signed on 18 February 1960 shall continue, in all its effects, within the Latin American Integration Association. Therefore, from the date when the present Treaty enters into force, the rights and obligations of the Latin American Free Trade Association shall correspond to the Latin American Integration Association.
CHAPTER IX: Final provisions
Article 55: The present Treaty may not be signed with reservations, neither may these be received on the occasion of its ratification or accession.
Article 56: The present Treaty shall be ratified by the signatory countries at the earliest possible term.
Article 57: The present Treaty shall enter into force thirty days after the deposit of the third instrument of ratification as regards the first three countries to ratify it. Concerning the other signatories, it shall enter into force on the thirtieth day following the deposit of the respective instrument of ratification and in the order in which such ratifications are deposited.
Instruments of ratification shall be deposited with the Government of the Eastern Republic of Uruguay, which shall report the date of deposit to the Governments of the signatory States of the present Treaty, as well as to those which have adhered thereto.
The Government of the Eastern Republic of Uruguay shall notify the date of enforcement of the present Treaty to the Government of each one of the signatory States.
Article 58: Upon its entry into force, the present Treaty shall remain open for accession to those Latin American countries which may so request. Acceptance of such accessions shall be adopted by the Council.
The Treaty shall enter into force for the adherent country thirty days after the date of its admission.
Adherent countries shall on that date put in force the commitments resulting from the regional tariff preference as well as the regional scope agreements concluded prior to the date of their accession.
Article 59: The present Treaty provisions shall not affect the rights and obligations resulting from agreements signed by any of the signatory countries prior to the date of their enforcement.
Article 60: The present Treaty provisions shall not affect the rights and obligations resulting from agreements signed by any of the signatory countries in the term between its signature and the date of its ratification. For countries which later become members of the Association, the provisions of this article refer to agreements signed prior to their incorporation.
However, each member country shall take the measures necessary to harmonize the provisions of the agreements in force with the objectives of the present Treaty.
Article 61: Member countries may introduce amendments or additions to the present Treaty. These shall be executed in protocols to enter into force upon ratification by all member countries and deposit of the respective instruments, subject to other criteria established thereof.
Article 62: The present Treaty shall have an indefinite duration.
Article 63: Any member country wishing to with draw from the present Treaty shall report such intention to the other member countries during one of the Committee sessions, formally delivering the denouncement document to the Committee one year after the date of advice referred to above. Once such denouncement has been executed, all rights and obligations corresponding to its condition as a member country shall automatically cease for the denouncing Government.
Notwithstanding the above, rights and obligations resulting from the regional tariff preference shall continue to be effective for a period of five more years, except if, at the time of denouncement, the member countries agree to the contrary. The above term shall start as from the date the denouncement is executed.
With reference to rights and obligations resulting from regional and partial scope agreements, the situation of the denouncing member country shall adjust to the specific rules which may have been established in each agreement. Should these rules not exist, the general provision contained in the previous paragraph of the present article shall apply.
Article 64: The present Treaty shall be known as the 1980 Montevideo Treaty.
CHAPTER X: Transitional provisional
Article 65: Pending ratification of the present Treaty by all signatory countries, as from the date of its enforcement by ratification of the first three countries, signatory countries which have not yet ratified shall be subject, both as regards their reciprocal relations and their relations with ratifying signatory countries, to the provisions of the legal structure of the Montevideo Treaty dated 18 February 1960, where appropriate, and specially to the resolutions adopted at the Meeting of the Council of Ministers of the Latin American Free Trade Association held on 12 August 1980.
These provisions shall no longer be applied to relations between signatory countries which have ratified the present Treaty and those which have not done so, as from one year following the date of its enforcement.
Article 66: The bodies of the Latin American Free Trade Association established by the Montevideo Treaty dated 18 February 1960 shall cease to exist as from the date of enforcement of the present Treaty.
Article 67: Non-ratifying signatory countries may participate in the Association bodies with the right to speak and vote whenever possible or of interest to them as long as ratification is pending, or until expire of the term established in the second paragraph of article 65.
Article 68: Signatory countries ratifying the present Treaty after its enforcement shall be subject to all provisions adopted prior to that moment by the Association bodies.
Article 69: The resolutions adopted by the Council of Ministers of the Latin American Free Trade Association at its Meeting of 12 August 1980 shall be incorporated to the legal framework of the present Treaty upon its entry into force.
DONE at the city of Montevideo, on the twelfth day of the month of August of the year nineteen hundred and eighty, in an original in the Spanish and Portuguese languages, both texts being equally valid. The Government of the Eastern Republic of Uruguay shall act as depositary of the present Treaty and forward duly authenticated copy of same to the Governments of the other signatory and adherent countries.
Continuation: Resolutions CM/1 to 7