Directory of Economic, Commodity and Development Organizations - table of contents

LATIN AMERICAN INTEGRATION ASSOCIATION (ALADI)

Asociación Latinoamericana de Integración (ALADI) 


        
HEADQUARTERS

        

General Secretariat                                  Postal Add: Casilla de Correos 20005
Calle Cebollatí 1461                                             Código Postal 11000
Montevideo                                           Telephone:  [598](2)410-1121 to 25
Uruguay                                              Facsimile:  [598](2)419-0649
                                                     Cable:      ALADI
                                                     E-Mail:     sgaladi@aladi.org
                                                     Internet:   www.aladi.org

                                  2002 - 2005

          Secretary-General:              ...   Juan Francisco ROJAS PENSO (Venezuela)
          Assistant Secretaries-General:  ...   Leonardo MEJIA (Ecuador)
                                          ...   Ms. María Teresa FREDDOLINO (Argentina)
 



        
LANGUAGES: Portuguese, Spanish

        
ESTABLISHMENT AND FUNCTIONS

        
The Latin American Integration Association (ALADI)
        was established after the signature of a new juridical
        instrument created by the 1980 Montevideo Treaty in
        Montevideo, Uruguay, on August 12, 1980 by the Ministers
        of Foreign Affairs of 11 Latin American states, namely,
        Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador,
        Mexico, Paraguay, Peru, Uruguay, and Venezuela. The
        Republic of Cuba became a member on August 26, 1999. The
        1980 Montevideo Treaty undertakes to further the process
        of economic integration begun in 1960 with the
        establishment of the Latin American Free Trade
        Association (ALALC) by the Montevideo Treaty of 1960. 

        
The organization aims to pursue the integration
        process in the region leading to its harmonious and
        balanced socioeconomic development. In particular, the
        organization's duties include the promotion and
        regulation of reciprocal trade, development of economic
        complementarity, and support of actions for economic
        cooperation to encourage market expansion. Member
        countries have established an area of economic
        preferences, comprising a regional tariff preference,
        regional and partial scope agreements, and created
        conditions favoring the participation of countries at a
        relatively less advanced stage of economic development in
        the economic integration process, based on principles of
        non-reciprocity and community cooperation. 

        
An Agreement establishing a Multilateral
        Compensation and Reciprocal Credit Mechanism
        (Mecanismo de Compensación de Saldos y Créditos
        Recíprocos (CPCR)) was signed by the Central Banks of
        the member countries of the Latin American Free Trade
        Association (ALALC) in 1965 and came into operation on
        June 1, 1966. The Dominican Republic joined in 1973. A
        new Reciprocal Payments and Credit Agreement was signed
        on August 25, 1982, adjusted to ALADI's new guidelines
        but maintaining the general features of the previous
        pact. The main features of the Agreement are: (a)
        establishment of bilateral lines of credit denominated in
        US dollars between each pair of central banks; (b)
        four-month paid multilateral compensation of balances
        accumulated in the bilateral accounts and the outstanding
        balances paid in US dollars usually through the Federal
        Reserve Bank of New York; (c) channeling of payments
        through the system is voluntary, although if convenient
        or necessary, member Central Banks may make them
        compulsory, such as was recently the case of
        Venezuela. During 1997 the volume of payments handled
        through this clearing mechanism reached US$7.864 million
        and in 1998, it fell to US$5.570 million and
        in 1999, it fell to US$3.930 million.  Since 1966,
        the settlement of payments channeled through the
        Agreement amount to a total of US$207.418 million,
        actually paying US$61.300 million, which represents an
        average saving of 70% in the use of convertible foreign
        exchange.

        
After May 1, 1991 a transitory financing mechanism
        of the credits due to the multilateral compensation
        balances (Automatic Payment Program) was incorporated in
        the Agreement. This mechanism attempts to foresee
        occasional liquidity difficulties that the Central Banks
        of member countries might face at the closing of the
        multilateral compensation periods. This mechanism is
        multilateral and automatic and consists in postponing the
        payment of obligations derived from the situations
        described above for a period of four months. 

        
The Santo Domingo Agreement,
        another credit mechanism designed to help finance
        intra-regional trade, was signed by the Central Banks of
        the member countries of ALALC and the Dominican Republic
        in 1969. The Agreement, which was modified and broadened
        in scope on September 22, 1981, consists of credit lines
        provided by the member Central Banks up to a joint total
        close to US$700 million. These resources are allocated
        into three mechanisms aimed at relieving temporary
        illiquidity experienced by members resulting from: (1)
        deficits in the payments clearance of intra-regional
        trade; (2) deficits in the overall balance of payments of
        the respective country; and (3) deficits caused by
        natural disasters. The support mechanisms of this
        Agreement were last used in 1984. The Banco
        Central de Reserva del Perú is the agent bank of both
        systems. 

        
In October 1998, in order to adapt and make a
        more appropriate CPCR, and after a revision of the
        general specifications by Central Banks, a Modifying
        Protocol was approved through Resolution 90 of the
        Council. Improvements were made to the general
        specifications regarding admissible payments, mechanisms
        for disagreement resolution (in force since May, 1998),
        compulsory attendance in multilateral compensation, and
        interest rate revision.  These improvements have
        provided greater security and transparency to the Payment
        System.

        
COMPOSITION

        
12 member countries: Argentina,
        Bolivia, Brazil, Chile, Colombia, Cuba, Ecuador, Mexico,
        Paraguay, Peru, Uruguay, and Venezuela 

        
There are 14 observer countries:
        China, Costa Rica, Dominican Republic, El Salvador,
        Guatemala, Honduras, Italy, Nicaragua, Panama, Portugal,
        Romania, Russian Federation, Spain and Switzerland 

        
There are 9 observer organizations:
        Inter-American Development Bank (IaDB), UN Economic
        Commission for Latin America and the Caribbean (ECLAC),
        the Organization of American States (OAS), the UN
        Development Programme (UNDP), the European Communities
        (EC), Latin American Economic System (SELA), Andean
        Development Corporation (CAF), and Inter-American
        Institute for Cooperation on Agriculture (IICA), Pan American Health
        Organization/World Health Organization (PAHO/WHO). 

        
STRUCTURE

        
The Council of Ministers of Foreign
        Affairs is the highest organ of the
        Association and is responsible for the adoption of its
        top policy guidelines. It is composed of the Ministers of
        Foreign Affairs of the eleven member countries, except
        when a Minister other than the Foreign Minister is in
        charge of ALADI's affairs in a particular country. 

        
The Evaluation and Convergence Conference
        is composed of plenipotentiaries of member countries. The
        Conference examines the operation of the integration
        process, evaluates results of preferential arrangements,
        and recommends studies to be undertaken by the
        Secretariat. 

        
The Committee of Representatives
        is composed of a Permanent Representative of each member
        country and his Deputy, and is the permanent political
        body of the Association. The Committee promotes the
        conclusion of agreements, adopts measures necessary to
        implement and regulate the Treaty, and convenes the
        Council and the Conference.

        
The Secretariat, headed by a
        Secretary-General who is elected by the Council for a
        renewable three-year term, carries out ALADI's technical
        and administrative tasks. The Secretary-General
        participates in the work of the Council of Ministers, the
        Conference, and the Committee. 

        
GENERAL PUBLICATIONS

        
ALADI
        prepares prepares periodical publications such as the
        evolution of the integration process within the region;
        the relationship between the member countries and the
        rest of the world; annual reports about the evaluation of
        the reciprocal Payment and Credit System; subscribed
        agreements between the member countries; and technical
        studies about the different items which form the
        integration process.

        
It has several information systems which
        support all negotiations held between member countries
        and the rest of the world.  This information is
        available on CD-ROM from the General Secretariat: 
        Integral System of Information and Support to Foreign
        Trade; General Import Specifications, Visualization
        Agreement System.  The documents and information
        systems can be accessed through the ALADI web-site.

        

UPDATED:  April 8, 2002

        
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