Latin American Free Trade Association

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The Latin American Free Trade Association was created in 1960in the Treaty of Montevideo by Argentina, Brazil, Chile, Mexico, Paraguay, Peru, and Uruguay. The signatories hoped to create a common market in Latin America.

By 1970, LAFTA expanded to include Bolivia, Colombia, Ecuador, and Venezuela. In 1980, LAFTA reorganized into the Latin American Integration Association. Membership remained unchanged until Cuba joined in 1999.

The goal of the LAFTA is the creation of a free trade zone in Latin America. It should foster mutual regional trade among the member states, as well as with the U.S. and the European Union. To achieve these goals, several institutions are foreseen: -the council of foreign ministers -a conference of all participating countries -a permanent council The LAFTA agreement has important limitations: it only refers to goods, not to services, and it does not include a coordination of policies. Compared e.g. to the European Union the political and economic integration is very limited.