Latin American Free Trade Association

Latin American Free Trade Association: see Latin American Integration Association.

---

Latin American Integration Association (LAIA)

 formerly (until 1980) Latin American Free Trade Association (LAFTA)

International association of Latin American countries originally dedicated to improving its members' economic well-being through free trade. At its founding in 1960 LAFTA included Argentina, Brazil, Chile, Mexico, Paraguay, Peru, and Uruguay; by 1970 Ecuador, Colombia, Venezuela, and Bolivia had joined. The organization aimed to remove all trade barriers over 12 years, but its members' geographic and economic diversity made that goal impossible. LAFTA was superseded in 1980 by the LAIA, which established bilateral trading agreements between members, which were divided into three groups according to their level of economic development. Cuba was admitted with observer status in 1986, and it became a full member in 1999. See also Inter-American Development Bank.

---

Latin American Free Trade Association 

(LAFTA), an economic grouping for trade founded by Argentina, Brazil, Chile, Mexico, Paraguay, Peru, and Uruguay. The agreement creating LAFTA was signed on Feb. 18, 1960, in Montevideo and came into force on June 2, 1961. In 1961, Colombia and Ecuador joined the association. Venezuela joined in 1966, and Bolivia in 1967. The highest body of the association is the annual assembly. Executive power is exercised by the standing executive committee.

LAFTA’s goals are to accelerate the rate of economic growth of its members and to resist economic pressure from the developed capitalist countries (above all, the USA and the Common Market countries). The agreement on the creation of LAFTA, as well as a number of subsequent agreements, provides for a gradual lifting of trade restrictions among members, a coordinated economic policy for the development of key branches of the national economy, and coordination and cooperation in the production of some goods. As a result of the implementation of liberalization measures, the trade turnover among LAFTA’s members rose from $659 million in 1961 to $2,589,000,000 in 1970. However, largely because of the economic backwardness of the majority of its members, the insufficient development of interbranch connections, the narrowness of domestic markets, and the existence of feudal vestiges in agriculture, LAFTA is encountering difficulties in its activities. US monopolies continue to dominate key branches of the economies of the majority of the association’s members, drawing enormous profits from their exploitative practices.

V. I. NEZNANOV