ALADI is a Latin American association of regional integration that works developing a progressive approach between the Latin American countries. Here you will find information about this organization: its members, its impacts in Latin America trade and its main differences from Mercosul
The Asociación Latinoamericana de Integración, also known as ALADI, which is the Latin American Association of Integration, is the biggest group of integration that exists in Latin America. It was created in order to represent the 20 million square kilometers and more than 510 million inhabitants of this area. ALADI is responsible for a GDP of approximately USD 1.8 trillion, generating USD 362.3 billion in exports and USD 365.5 billion in imports.
Members of ALADI
The group is composed by thirteen Latin American countries:
The Republic of Nicaragua has asked to enter the group and in 2011 the country was accepted by ALADI. However, the country will have to advanced in the accomplishment of conditions established by the group in order to become an official member. According to the Montevideo Treaty, any Latin American country that solicites participation can compose the group. The acceptance of the country is developed by the ALADI Council and only conceded if the new member responds for the treaties and commitments of the Latin American Association.
The group was created in 1980 with the Montevideo Treaty, which established the general principles of this new organization:
- politic pluralism
- economic pluralism
- progressive convergence of actions in order to create a Latin American common market
- different treatment to countries, according to their development level
- multiplicity in forms of concentration of trade instruments.
ALADI will permit the creation of an area with economic preferences in the region, but the final purpose is to establish a common market among its members through Regional and Partial Agreements.
Regional Agreements Achieved by ALADI
Five regional agreements were developed by the Latin American Association:
- the opening of markets
- preference for regional taxation
- scientific and technological cooperation
- cooperation in exchange of goods in the cultural, educational and scientific areas
- promotion of the trade through the overcoming of technical barriers applied to trade
The agreement regarding the opening of markets contemplates the establishment of favorable conditions to the participation of countries with minor economic development, such as Paraguay, Ecuador and Bolivia. The main objective of it is to open the markets of these countries, as well as their production, to the other members of ALADI, without any type of customs taxation or aliquots.
The objective of the scientific and technological cooperation agreement is to promote a regional cooperation among the Latin American countries. The intention is to allow the creation and development of knowledge, as well as the acquisition, dissemination and application of technology.
The promotion of trade through the overcoming of technical barriers applied to trade was an agreement signed in 1997 with the purpose of avoiding the elaboration, adoption and application of technical barriers, such as standards and regulations, that are unnecessary to regional trade.
Partial Agreements Achieved by ALADI
Partial Agreements are the ones signed among a few countries of ALADI. They are used as a way to deepen the process of regional integration, by a progressive multilateralisation. These agreements can be divided in the following classifications:
- Economic Complementation Agreements
- Agricultural Agreements
- Trade Promotion Agreements
- and others.
The economic complementation agreements seek to promote the entry of the signatory countries with unified economic politics, creating a free trade area. There are eight manifestations of this type of agreements: between Chile and Venezuela; Chile and Colombia; Bolivia and Mexico; Chile and Ecuador; Colombia, Mexico and Venezuela; Chile and Peru; Chile and Mexico; and between Mexico and Uruguay.
The agricultural agreements aimed to create and regulate the agricultural trade in the region. They must be flexible in order to contemplate social and economic characteristics of the signatory members production. The current agreements of this type are between Argentina and Uruguay; Argentina, Bolivia, Brazil, Chile, Colombia, Cuba, Ecuador, Paraguay, Peru, Uruguay and Venezuela; and between Argentina, Bolivia, Brazil, Chile, Paraguay and Uruguay.
The agreements regarding the promotion of trade refers to non-taxable goods and to the regional chains of trade. There are nineteen of this agreements established, some of them are between Argentina and Uruguay; Bolivia and Brazil; Argentina, Brazil, Paraguay and Uruguay; and Argentina and Bolivia.
According to Montevideo Treaty, other types of Partial Agreements can be created. In 2013, Bolivia and Uruguay were establishing favorable conditions to increase tourism among them - but until May of that year, they hadn't reached any formal agreement. The types of Partial Agreements can vary in several modalities, such as politics, temporally company visas, investments, sanitary measures, intellectual property, transports, tourism and telecommunications.
Differences Between ALADI and Mercosul
Mercosul is the Mercado Comum do Sul, which means a common trade association between countries of South America. Differently from ALADI, Mercosul does not include all countries of Latin America, but only from the South of the continent: it is composed by Argentina, Brazil, Paraguay, Uruguay and Venezuela. The main target of Mercosul is to promote the development of its members through the establishment of an economic expanded space and through a more competitive insertion in the international economic scenario.
In 1991, Argentina, Brazil, Paraguay and Uruguay signed the Assunção Treaty, responsible for the creation of Mercosul. The treaty defended the establishment of free flow of goods, services and productive factors, a common external rate, the adoption of a common trade politics, the coordination of macroeconomic and sector politics and the harmonization of legislation in areas of interest. In 2011, Venezuela was accepted in the Mercado Comum do Sul, entering in the organization only in 2012.
The Assunção Treaty is open for the entry of all members of ALADI. Bolivia, Chile, Colombia, Ecuador and Peru are associated countries of Mercosul. Guyana and Suriname also participated of meetings of this block, even though they are not part of it.
While Mercosul requests the immediate establishment of rules that their members should follow in order to promote a common market among them, ALADI asks for a progressive and gradual implementation of the common market. Both of them search for a full integration of countries, but works in different areas, one only in South America and the other in Latin America.