Latin American Free Trade Association

This ppt explains Latin American Free Trade Association which also covers Goals of LAFTA

1. Sundar B. N. Assistant Professor Latin American Free Trade Association

2. Latin American Free Trade Association Latin American Free Trade Association (LAFTA), by the 1960 Treaty of Montevideo by Argentina, Brazil, Chile, Mexico, Colombia, Ecuador, Paraguay, Peru and Uruguay. LAFTA came into effect on January 2, 1962. The signatories hoped to create a common market in Latin America and offered tariff rebates among member nations. When the trade association commenced it had seven members and its main goal was to eliminate all duties and restrictions on the majority of their trade within a twelve year period. By the late 1960’s LAFTA had a population of 220 mn and produced about US $90bn of goods and services annually.

3. Goals of LAFTA Expansion and Diversification of trade among the contracting parties Creation of a free trade zone in Latin America. Foster mutual regional trade among the member states, as well as with the US and the European Union. Progressive integration of the Economies of the LAFTA Countries

4. LAFTA Main Co-Operation With North American Free Trade Agreement Central American Free Trade Agreement Other Free Trade Agreement

5. LAFTA Main Co-Operation With North American Free Trade Agreement A major stimulus to US Latin American trade has been the NAFTA, which the US, Mexico and Canada signed in 1994. Central American Free Trade Agreement In 2004, the success of NAFTA led to the formulation of the similar CAFTA, involving the US and the Central American nations of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. Shortly afterward, the Caribbean Island nation of the Dominican Republic joined the agreement, which became known as DR-CAFTA. Other Free Trade Agreement In 2004, a free trade agreement between the US and Chile went into effect. This bilateral treaty soon resulted in a 154% increase in the value of trade between the US and Chile.

6. Limitation of LAFTA The LAFTA agreement has important limitations It only refers to goods, not to services It does not include a co-ordination of policies Compared to the European Union, the Political and Economic Integration is very limited