ALADI – Its importance in the customs work of Latin America

Summary: I.- Introduction. II.- Historical background. III.- Institutional structure. IV.- ALADI Agreements. V.- Regime of Origin. VI.- Certification of Origin. VII. Logistics and transport. VIII.- Perspectives and unexplored potential. IX. Conclusions. X.- References.

I. Introduction

Since its establishment in 1980 through the signing of the Montevideo Treaty (MT80), the Latin American Integration Association (LAIA) has worked tirelessly to forge a Latin American common market, promoting Regional Tariff Preferences through Partial Scope Agreements (PSAs) and Regional Scope Agreements (RSAs). With approximately one hundred and eleven Agreements in force, LAIA has been a catalyst in the promotion of intra-regional trade and the harmonization of customs policies, contributing to its stability and economic growth.  

"Today ALADI is the main regulatory framework for regional integration. Its broad trade framework, made up of (more than) 50 preferential agreements, allows 82% of products traded in the region to be tariff-free.” (ALADI, 2020).

To understand the importance of ALADI, it is crucial to consider that its member countries together represent a population of more than 560 million inhabitants, whose annual per capita income exceeds US$ 9,100 and cover a territorial area of ​​20 million square kilometers, (ALADI, n.d.). Data from the CEG Global Foreign Trade Report 2022, published by ALADI on November 9, 2023, reveal that ALADI members' exports during 2022 amounted to US$ 1.289 billion, with 12% of this exchange corresponding to exports within the same member countries and the rest distributed among other regions of the world, such as the United States and Canada, Asia, Europe and Other Areas (ALADI, 2023). 

On the other hand, it is important to consider that three integration blocks also operate under the ALADI orbit: The Andean Community; The Southern Common Market (MERCOSUR), and The Pacific AllianceUnderstanding these Integration Systems, the Agreements and Regulations derived from ALADI, along with their history, operation, structure; the regimes and certifications of origin under their jurisdiction, as well as their logistics and transport, are essential topics that international trade operators must be familiar with, since their influence is evident in daily procedures, from the verification of documents to the application of the agreed benefits.

II. Historical background

The Latin American Integration Association, ALADI, emerged as a response to a series of antecedents that marked the path towards economic integration in Latin America, such as the GATT, the Treaty of Rome, ECLAC and ALALC. 

El GATT (General Agreement on Tariffs and Trade) The World Trade Organization (WTO) was one of the first global attempts to promote trade and reduce tariff barriers. It played a key role in reducing tariffs and other trade barriers during several rounds of negotiations that took place between member countries. One of the most important rounds was the Uruguay Round, which culminated in the creation of the World Trade Organization (WTO) in 1995 to replace the GATT and expand its scope to cover additional areas of international trade, such as services and intellectual property rights. 

El Treaty of Rome, signed in 1957, established the European Economic Community (EEC), the precursor to the European Union (EU). It was one of the founding treaties of what is known as the European integration process, promoting the free movement of goods, services, people and capital between member countries. Although the EEC was focused on Europe, its model inspired other regions of the world, including Latin America, to seek forms of cooperation and economic integration.

La Economic Commission for Latin America and the Caribbean (ECLAC), is part of the five Regional Commissions of the United Nations, based in Santiago, Chile. It was established in 1948, and its objective is “contribute to the economic development of Latin America, coordinate actions aimed at its promotion and strengthen the economic relations of the countries among themselves and with other nations of the world” (ECLAC). These objectives are pursued through studies, research and other support activities, dedicating themselves to the organization, interpretation and dissemination of data related to economic and social development and to providing advisory services, execution of technical cooperation programs, among other actions to support the countries of the region.

The meetings and proposals made by ECLAC gave rise to a Free Trade Zone project that led to the signing of the Montevideo Treaty in 1960, an instrument that gave rise to the Latin American Free Trade Association (ALALC).

At that time, the GATT had established the "most favoured nation clause", which established that the advantages granted to one country should be extended to the other signatories of the agreement. However, the same Treaty in its art. 24 allowed, as an exception to the multilateral trade system, the existence of free trade zones. The creation of ALALC was based on this possibility and on the proposal of the ECLAC to create an "expanded" Latin American market that would enable development.

ALALC, established in 1960, was one of the first attempts at economic integration in Latin America. Inspired by the model of the Treaty of Rome, and following the signing of the First Treaty of Montevideo (1960), ALALC sought to promote trade among countries in the region by expanding the size of their markets and expanding their reciprocal trade (ALADI, n.d.). Although ALALC had some success in reducing trade barriers, it failed to achieve its goals of creating a common Latin American market.

During the Tokyo Round of the GATT, Article 24 was amended to make possible the creation of "customs preference zones", which led to the signing of a new Treaty in Montevideo on August 12, 1980, giving rise to the Latin American Integration Association (ALADI), which converts and accepts the economic preferences already agreed upon within the framework of ALALC, considering the possibility of implementing Partial Scope Agreements in which two or more countries may grant each other reciprocal preferences without this implying their automatic granting to the remaining member States of the Association.

Furthermore, and inspired by previous regional integration efforts, ALADI broadened its focus to include not only trade, but also economic cooperation and integration in other areas. ALADI inherited the legacy of ALALC, and became a key forum for the promotion of harmonious and balanced economic and social development in the region, outlining the purpose of gradually and progressively achieving the establishment of a Latin American common market.

ALADI's objectives:

• Gradually reduce and eliminate barriers to reciprocal trade between its member countries;
• Promote the development of links of solidarity and cooperation among Latin American peoples;
• Promote the economic and social development of the region in a harmonious and balanced manner in order to ensure a better standard of living for its people;
• Renew the Latin American integration process and establish mechanisms applicable to the regional reality;
• Create an area of ​​economic preferences with the ultimate goal of establishing a Latin American common market. (ALADI)

Over the years, ALADI has played an important role in promoting intra-regional trade, harmonizing economic policies and creating a common economic space in the region, guided by the founding principles embodied in TM80: Pluralism, Convergence, Flexibility, Differential Treatment and Multiplicity.

III. Institutional Structure

According to the Treaty of Montevideo (TM80), ALADI is composed of three political bodies: the Council of Ministers of Foreign Affairs, the Evaluation and Convergence Conference and the Committee of Representatives; and a technical body called the General Secretariat.

The Council of Ministers is the highest body of ALADI and adopts the decisions that correspond to the highest political direction of the economic integration process. It is composed of the Ministers of Foreign Affairs of the member countries - or in cases where the competence of integration matters is assigned to a different Minister or Secretary, the countries may be represented with full powers by that Minister or Secretary - and meets at the call of the Committee of Representatives, holds sessions and makes decisions with the presence of all member countries.

The Committee of Representatives is the permanent political body of the Association. It is composed of a Permanent Representative from each member country with the right to one vote, and each Permanent Representative will have an Alternate. The Committee meets regularly every fifteen days and its Resolutions are adopted by the affirmative vote of two thirds of the member countries. In addition, it has a President and two Vice-Presidents. Among its powers are the promotion of agreements of regional scope, convening periodic government meetings to continue the integration process, evaluate its operation and propose measures for its advancement. The Committee adopts measures for the execution of the Treaty of Montevideo (TM80), approves the annual work program and the budget of the Association. Likewise, it can commission studies, formulate recommendations, present reports, propose solutions to controversies, and declare the compatibility of partial agreements between member countries, among other functions. 

The third political body, the Evaluation and Convergence Conference, is made up of Plenipotentiaries of the member countries and meets at the call of the Committee every three years in ordinary session, or on occasions when it is called in an extraordinary session. The Conference meets and makes decisions with the presence of all member countries. Its powers include examining the functioning of the integration process in all its aspects; promoting the convergence of Partial Scope Agreements, seeking their progressive multilateralization; promoting actions of greater scope in the area of ​​economic integration; carrying out periodic reviews of the application of differential treatments; carrying out negotiations for the establishment and deepening of regional tariff preferences, among others.

The General Secretariat is ALADI's technical body, headed by a Secretary General and composed of technical and administrative staff. The Secretary General is appointed by the Council and holds office for three years, with the possibility of being re-elected for another equal period. Its functions include proposing, analyzing, studying and making arrangements to facilitate the decisions that governments must reach (ALADI, n.d.).  

Article 43 of TM80 states that “The Council, the Conference and the Committee shall adopt their decisions by the affirmative vote of two-thirds of the member countries.” with some exceptions. Abstention does not mean a negative vote and absence at the time of voting is interpreted as abstention.

In turn, ALADI has three categories of countries that are contemplated in Resolution 6 of the Council of Ministers of ALALC, these being:

• Countries with lower relative economic development (3): Bolivia, Ecuador and Paraguay.
• Intermediate development countries (7): Chile, Colombia, Cuba, Panama, Peru, Uruguay and Venezuela.
• Other member countries (3): Argentina, Brazil and Mexico.

The Annual Budget and the Annual Work Program of the Association are approved by the Committee of Representatives, according to article 35, paragraph e) of TM80, taking into consideration the guidelines issued by the Council of Ministers and the priorities defined by the member countries. The income budget of the Association has three main aspects: the annual contribution of the member countries, the headquarters fee and other income (sale of publications, supply of information and miscellaneous income). The contribution of the member countries is stipulated taking into consideration their category and financial situation, and the countries can grant additional contributions for specific projects or particular activities, according to article 5 of Resolution 8 (II) of 1984, which states: “To establish a special fund to support the implementation of economic development projects of interest to countries with lower relative economic development, which will be made up of financial or other contributions that member countries, third countries, international organizations or any other source wish to make." (ALADI, 1984, p. 2). The annual budget is mainly intended to cover the organization's operating expenses, research and analysis activities, project and program coordination, and all activities related to ALADI's priorities and objectives.

IV. ALADI Agreements

The TM80 provided for the establishment of a Area of ​​Economic Preferences, composed of three Mechanisms: The Regional Tariff Preference (PAR), Regional Scope Agreements (RSA), and the Partial Scope Agreements (PSA). 

As indicated in “File No. 1 on the Montevideo Treaty (TM80), its principles and mechanisms” ALADI (2020), the Regional Tariff Preference is a "percentage reduction of the taxes applicable to imports from third countries that ALADI member countries grant each other on imports of products originating in their respective territories(p. 2). Later on, it indicates that the PAR is applied to the entire tariff universe, reciprocally and in different magnitudes, according to the three categories of countries that we addressed in the previous topic, and that the products that each country has included in its List of Exceptions are exempt from said application.

There is an additional category called “Mediterranean PMDER” (Bolivia and Paraguay), who receive the following preferences from the other member countries:

• • • • Of the countries with lower relative economic development: 24%.
      • From intermediate development countries: 34%.
      • Of the remaining member countries: 48%.

Regarding the scope of application of the Regional Tariff Preference, in the event that a product has been negotiated with tariff treatment both in the PAR and in another ALADI agreement, member countries will apply the regional tariff preference to the import of products that they have negotiated in any of the mechanisms provided for by TM80, provided that this is greater than that which said countries have granted in the aforementioned mechanisms (Article 4 of TM80).

Regarding this, Sheet No. 1 on the TM80 tells us that the above “implies that if a product is negotiated both in the PAR and in another agreement signed under the TM80, the PAR will be applicable only if the preference it grants is greater than that negotiated within the scope of the other agreement, however, if the preference is less than or equal to that granted by said agreement, the latter must be applied.” (ALADI, 2020)

It is important to emphasize the importance of having a thorough knowledge of these ALADI provisions, since each of the rates established in the Regional Tariff Preference (PAR) requires precise management. These preferential rates not only affect the calculation of import tariffs, but also influence the determination of product costs and prices, as well as the competitiveness of companies in the regional market. In addition, proper management of the exceptions established by each country in its Exceptions List is essential to avoid possible trade conflicts and ensure the uniform application of the PAR throughout the region.

Continuing with the ALADI mechanisms, we find the Regional Scope Agreements (RAAs), which in summary, are those in which all ALADI member countries participate. There are currently seven in force. Regional Scope Agreements: Market Opening Agreement (NAM) in favor of Bolivia, Ecuador and Paraguay; Regional Agreement No. 4 that establishes the Regional Tariff Preference; the Regional Agreement on Scientific and Technological Cooperation; the Regional Agreement on Cooperation in the Exchange of Goods in the Areas of Culture, Education and Science; and the Regional Framework Agreement for the Promotion of Trade by Overcoming Technical Barriers to Trade.

Meanwhile, the Partial Scope Agreements (PPA), are all those in which one or more ALADI member countries participate, but not all of them. These agreements can be of different types, among which are:

• • • Those of Economic Complementation, which aim to promote maximum use of production factors, stimulate economic complementarity, ensure fair conditions of competition, facilitate the competition of products in the international market and promote the balanced and harmonious development of member countries;
    • The Commercial, whose exclusive purpose is to promote trade between member countries;
    • The Agricultural, which aim to promote and regulate intraregional agricultural trade;
    • Trade Promotion, relating to non-tariff matters and tending to promote intraregional trade flows;
    • The Renegotiation Agreements for Historical Heritage, and other modalities based on Article 14, 25 and 27 of TM80.

ALADI's Fact Sheet No. 1 on TM80 tells us that, in general terms, it is important to keep in mind that the rights established by the APP apply to the subscribing countries, and must be open to the adhesion of other member countries and contain clauses that promote convergence with other Latin American countries that are not members of ALADI.

V. Regime of Origin

To address the issue of the Origin Regime, it is essential to define how a merchandise is related to a territory through three essential concepts: provenance, nationality and origin.

La origin of a good refers to the country from which it is exported to the receiving country. On the other hand, the nationality, a legal concept, is attributed to merchandise when its legal situation links it to the customs territory of a country, allowing it to remain there indefinitely, while it is considered foreign when it cannot remain there without having gone through a customs process that nationalizes it. In addition, the designation of origin is used to distinguish a product based on the characteristics of the environment in which it is made.

To determine whether a good can be considered originating in a specific country, and thus apply the corresponding legal treatment - such as preferential import duties under trade agreements - the following criteria are used: Rules of Origin, which can be classified into Non-preferential and Preferential.

The Non-preferential rules of origin They are necessary to determine the origin of a good in situations other than the application of tariff preferences. They are used, for example, in the application of anti-dumping duties, countervailing measures and safeguards, import restrictions and prohibitions for reasons of health protection, as well as in requirements regarding origin markings and public sector procurement. These rules are regulated at the multilateral level by the WTO Agreement on Rules of Origin.

Furthermore, the Preferential Rules of Origin are used to determine whether a product can receive preferential treatment under trade agreements. These rules prevent trade triangulation and are structured into four areas: 

• • • Origin Rating: It establishes the criteria for a good to be considered originating in a member country, according to the terms of the agreement. Basically, there are three fundamental criteria: the criterion of being totally obtained; the criterion of being entirely produced and the criterion of substantial transformation.
    • Conditions of Expedition: Defines the requirements and procedures for documenting and transporting goods, ensuring compliance with the Rules of Origin.
    • Accreditation of Origin: Establishes the mechanisms to certify the origin of the goods, such as the issuance of certificates by competent authorities.
    • Verification and Control of Origin: Defines the protocols to verify compliance with the Rules of Origin during the customs process, guaranteeing its integrity.

VI. Regime of Origin

To address the issue of the Origin Regime, it is essential to define how a merchandise is related to a territory through three essential concepts: provenance, nationality and origin.

La origin of a good refers to the country from which it is exported to the receiving country. On the other hand, the nationality, a legal concept, is attributed to merchandise when its legal situation links it to the customs territory of a country, allowing it to remain there indefinitely, while it is considered foreign when it cannot remain there without having gone through a customs process that nationalizes it. In addition, the designation of origin is used to distinguish a product based on the characteristics of the environment in which it is made.

To determine whether a good can be considered originating in a specific country, and thus apply the corresponding legal treatment - such as preferential import duties under trade agreements - the following criteria are used: Rules of Origin, which can be classified into Non-preferential and Preferential.

The Non-preferential rules of origin They are necessary to determine the origin of a good in situations other than the application of tariff preferences. They are used, for example, in the application of anti-dumping duties, countervailing measures and safeguards, import restrictions and prohibitions for reasons of health protection, as well as in requirements regarding origin markings and public sector procurement. These rules are regulated at the multilateral level by the WTO Agreement on Rules of Origin.

Furthermore, the Preferential Rules of Origin are used to determine whether a product can receive preferential treatment under trade agreements. These rules prevent trade triangulation and are structured into four areas: 

• • • Origin Rating: It establishes the criteria for a good to be considered originating in a member country, according to the terms of the agreement. Basically, there are three fundamental criteria: the criterion of being totally obtained; the criterion of being entirely produced and the criterion of substantial transformation.
    • Conditions of Expedition: Defines the requirements and procedures for documenting and transporting goods, ensuring compliance with the Rules of Origin.
    • Accreditation of Origin: Establishes the mechanisms to certify the origin of the goods, such as the issuance of certificates by competent authorities.
    • Verification and Control of Origin: Defines the protocols to verify compliance with the Rules of Origin during the customs process, guaranteeing its integrity.

ALADI member countries have established preferential rules of origin applicable to goods subject to tariff preferences in the agreements signed under the Montevideo Treaty (TM80). These rules are contained in the Origin Regimes of the Agreements, which include provisions on the criteria for qualifying origin, the certification mechanisms, and the customs procedures for verification and control of origin. The ALADI General Regime of Origin is established in Resolution 252 of the ALADI Representatives Committee (August 4, 1999).

Continuing with the ways of proving the origin of a merchandise, we can distinguish between the accreditation through a Certificate of Origin, and the accreditation through a Declaration in an Invoice or another commercial document. 

Certification of Origin - which can be done through a third party or by self-certification - is the most commonly used method in International Trade to ensure that products meet the requirements established in trade agreements and enjoy the corresponding tariff benefits. The Certificate of Origin provides documentary evidence that the exported goods originate in a specific country, which helps to avoid tariff evasion and guarantees transparency in commercial transactions. In addition, it facilitates the customs process by providing accurate information on the origin of the goods, which contributes to streamlining import and export procedures. 

“In an international trade operation between two countries that have an Agreement that results in preferential treatment in tariff matters, it is normally the exporter who is responsible for processing the Certificate of Origin that the importer must then present to the Customs of his country to benefit from the preference.” (ALADI, 2020, p. 18).

This streamlining of customs processes is essential to facilitate international trade and promote the competitiveness of products in global markets. In this regard, ALADI has implemented various measures to simplify and streamline the process of certification of origin, which contributes to the efficiency and fluidity of trade operations between member countries.

As ALADI Fact Sheet No. 4 on the Rules of Origin indicates, one of these measures is the creation of a Registry of Authorized Entities and Signatures of Authorized Officials for the issuance of ALADI Certificates of Origin, as part of the General Regime of Origin established in Resolution 252 of the Committee of Representatives. This registry, administered by the General Secretariat of ALADI, contains information on official departments and authorized entities, as well as the list of authorized officials and their autograph signatures.

The main purpose of this registry is to provide customs and importers with the ability to verify the authenticity of issued certificates of origin. For example, they can verify whether the person who signed the certificate was authorized to do so on the date indicated and whether the issuing entity was qualified to certify the origin of the goods. This information is freely accessible through the ALADI website, ensuring the transparency and reliability of the origin certification process.

In addition, ALADI member countries and their competent national agencies have exclusive access to the registration forms of authorized officials, allowing them to verify autograph signatures and other relevant details. This availability of information contributes to strengthening cooperation and coordination between the customs authorities of member countries, thus facilitating the smooth exchange of goods in the region.

On the other hand, in the process of modernization inherent to the advancement of communication and information technologies, in 2004 the idea of ​​applying computer tools in the certification processes between ALADI member countries was born, to promote the facilitation of cross-border trade, providing operators in the region with a better service. This is how the idea of ​​a "Digital Certification of Origin (COD)", that is, moving from paper documents to electronic documents, signing and sending them electronically, with the same legal value as those issued on paper. 

To achieve this proposal, the ALADI General Secretariat created a plan called "Proposal for the digitalization of Certificates of Origin within the scope of ALADI" in 2004. This plan introduced an initial model for using digital technology in the issuance, signing and sending of Certificates of Origin using Information and Communication Technologies (ICT).

A Technical Group consisting of more than one hundred experts from member countries was then formed to establish the procedures and technical specifications of the system, necessary to develop the corresponding computer applications.

This gave rise to document ALADI/SEC/di 2327, which details the technical specifications and general procedures for Digital Certification of Origin within the scope of ALADI. This document was approved by Resolution 386 of the ALADI Representatives Committee on November 4, 2011.

According to this Resolution, the Digital Certification of Origin within the scope of ALADI will have the same legal validity as the certification of origin in paper and handwritten signature established in the regional or partial agreements according to the Treaty of Montevideo 1980 (TM80), as long as it is formalized within these legal instruments.

At this point, it is essential to highlight the benefits that ALADI’s Digital Certification of Origin (COD) brings to customs operations in Latin America and the Caribbean, as detailed in the book “ALADI’s Digital Certification of Origin, a Tool for the Facilitation of Regional Trade” (General Secretariat of ALADI, 2014). The COD allows for significant savings in time, resources and storage space by eliminating the need to manage large quantities of paper documents; and increases the veracity of certificates by avoiding the possibility of falsifications or fraud. 

With the COD, the exporter no longer needs to travel to the offices of the Issuing Entity, which saves time and reduces the costs associated with sending certificates and accreditation of officials authorized to sign them. This modality also reduces expenses related to transfers, international shipments and storage of physical documents. In addition, it provides greater security, since only the holder of a private key registered with ALADI can sign a COD. All these benefits contribute to streamlining export and import procedures in the region, while aligning with efforts to preserve the environment by reducing the consumption of natural and energy resources.

To determine the degree of implementation of the COD in member countries, there are five stages:

1. 1. 1. 1. Development of Broadcasting and Reception Platforms (DP)
         2. Internal Homologation (HI)
         3. External Homologation (HE)
         4. Pilot Plan (PP)
         5. Issuance of Legally Valid Digital Certificates of Origin (COD)

Regarding the process carried out by ALADI member countries for the implementation of the COD, during the "VI Meeting of the Coordination Commission for the Certification of Digital Origin of ALADI", on November 16, 2023, the Table "Status of Implementation of the Digital Certificate of Origin" was updated, with the information provided by each of the member countries, with the following information:

• • • • Cuba, Ecuador and Panama are in the development stage of the Emission and Reception Platforms (DP).
      • Bolivia and Venezuela are in the Internal Homologation (HI) stage.
      • In the External Approval (HE) stage are:
        • • Brazil with Chile
          • Bolivia with Paraguay
      • Argentina and Colombia are in the Pilot Plan (PP) stage.
      • In the stage of Legally Valid Digital Certificates of Origin (COD) are:
        • • Argentina with: Brazil, Chile, Paraguay and Uruguay (with Brazil and Uruguay issuing CO exclusively in digital format)
          • Brazil with: Argentina, Colombia, Paraguay and Uruguay (with Argentina and Colombia issuing CO exclusively in digital format).
          • Chile with Argentina and Uruguay
          • Colombia with Brazil (they are issuing CO exclusively in digital format)
          • Mexico with Peru and Uruguay
          • Paraguay with: Argentina, Brazil and Uruguay
          • Peru with Mexico
          • Uruguay with: Argentina, Brazil, Chile, Mexico and Paraguay. (With Argentina and Brazil, they are issuing CO exclusively in digital format)

As we can see, many of the ALADI member countries have made progress in different stages to implement Digital Certification of Origin, with varying levels of progress depending on the country. This demonstrates the recognition of the importance of this new form of certification to facilitate regional trade and integration processes in Latin America and the Caribbean.

VII. Logistics and transport

The last point to highlight regarding the Trade Facilitation processes promoted by ALADI is the one related to Logistics and Transport. In this regard, it is important to highlight that it has supported the formation of the Latin American Logistics Association (ALALOG), which brings together Logistics Associations and Chambers of ALADI member countries, with the objective of disseminating and exchanging experiences and practices for the development of logistics activity in the region. This Association allows monitoring the needs of regional logistics activity in the short, medium and long term, and offering this information to the Governments through ALADI.

On the other hand, ALADI has promoted the regional articulation of norms and procedures in the field of transport, aiming at the simplification and harmonization of standards, rules and trade operations; saving time and reducing costs and strengthening physical integration and regional trade. In this regard, the signing of the Agreement on International Land Transport (ATIT), in September 1990, serves as a legal framework in the Association for the provision of land transport services in 7 member countries: Argentina, Bolivia, Brazil, Chile, Paraguay, Peru and Uruguay. 

Within the framework of ALADI there are also initiatives to facilitate trade through river transport. This is where we find the “Santa Cruz de la Sierra Agreement”, signed by Argentina, Bolivia, Brazil, Paraguay and Uruguay, politically promoted since 1967 and concretized with the creation of the Intergovernmental Committee of the Hydroway (CIH) in 1992, and its inclusion within the framework of the Treaty of the River Plate Basin. Since then, the Santa Cruz de la Sierra Agreement has established a common regulatory framework for transport through the Paraguay-Paraná Waterway.

For those who wish to learn more about the importance of this Agreement and the International Customs Transit Information System (SINTIA), which is the electronic system used to manage information related to the transit of goods by land and river routes across its borders, we suggest reading the article available at: https://aduananews.com/sintia-sistema-informatico-de-transito-internacional-aduanero/

As the last element in Trade Facilitation we find the
Authorized Economic Operator (AEO) Program, which seeks to facilitate international trade through security and facilitation standards established by the WCO. ALADI countries are implementing and strengthening these programs, especially since the entry into force of the WTO Trade Facilitation Agreement in 2017. The AEO Concept has its origins in the SAFE Regulatory Framework, which provides criteria for the accreditation of operators and the associated benefits, such as time and cost savings in the logistics chain. This concept encourages collaboration between customs and companies to ensure security and minimize risks in the supply chain.

As ALADI indicates on its website, “one of the fundamental characteristics of the AEO figure lies in providing the possibility for customs administrations to sign Mutual Recognition Agreements (MRA) of their AEO programs with a view to ensuring and facilitating trade to a greater extent. This implies that the government of a country formally recognizes the AEO program of the government of another country and, consequently, grants advantages to the AEOs of said country.” (ALADI, n.d.)

VIII. Perspectives and unexplored potential

ALADI's future prospects focus on its ability to continue to positively influence customs in the region through increased cooperation and coordination among member countries. ALADI can play a crucial role in standardizing customs processes, implementing innovative technologies, and training customs personnel to improve efficiency and security in international trade.

In this regard, ALADI has begun to promote the implementation of the Single Window for Foreign Trade (VUCE), a tool that centralizes and simplifies customs and documentary procedures related to international trade. This initiative is vital to continue Trade Facilitation in the region, reducing times and costs and increasing transparency and efficiency in the management of the international flow of goods.

In addition, there are still unexplored areas where ALADI could play an important role. For example, the harmonization of customs regulations and the facilitation of cross-border e-commerce are aspects that require special attention. Promoting common standards and simplified procedures in these areas could significantly facilitate trade between member countries.

Regarding customs cooperation, ALADI could take advantage of opportunities to strengthen collaboration with other regional and global organizations. Sharing best practices and experiences in customs management could improve the efficiency and integrity of customs processes throughout the region, ensuring smoother and safer trade.

IX. Conclusions

As we stated at the beginning of this article, the Latin American Integration Association (ALADI) plays a fundamental role in promoting trade and regional cooperation in Latin America and the Caribbean, having a profound impact on regional customs affairs. 

Throughout its history, ALADI has worked tirelessly to strengthen trade ties between member countries, facilitating trade exchanges and promoting economic integration between Latin American and Caribbean countries. The creation of three integration blocks within it is the best proof of this. The Andean Community, the Common Market of the South (MERCOSUR), and the Pacific Alliance are blocks originating from the same integration matrix; all three share their DNA.

Its work on tariff preferences, trade agreements and certification of origin has enabled greater economic integration and effective facilitation of regional trade. It has been a silent but powerful player. As the region faces new challenges and opportunities, ALADI is well positioned to continue being a pillar of cooperation among sister countries.

X. References

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• ALADI. (2020). ALADI File Series: Rules of Origin, File No. 4. https://www2.aladi.org/biblioteca/Publicaciones/ALADI/Secretaria_General/Fichas_ALADI/04_Origen.pdf
• ALADI General Secretariat. (2014). ALADI's Digital Certification of Origin: A Tool for Facilitation of Regional Trade. https://www2.aladi.org/nsfaladi/estudios.nsf/96C278CF6E341C1B03257D1E0053F4CD/%24FILE/Libro_Certificacion_Origen_Digital_ALADI.pdf
• General Secretariat of ALADI. (November 2023). Status of Implementation of the Digital Certificate of Origin in ALADI member countries. Retrieved from https://www2.aladi.org/SitioALADI/documentos/COD/EstadoDeImplementacionDelCod.pdf
• General Secretariat of ALADI (September 2016). “Santa Cruz de la Sierra” Agreement on River Transport on the Paraguay – Paraná Waterway (Port of Cáceres – Port of Nueva Palmira) Volume II Regulations. https://www2.aladi.org/sitioAladi/documentos/facilitacionComercio/Libro_AcuerdoSantaCruzSierra_Hidrovia_V2.pdf