The objective of the Tariff Reduction Program is to eliminate the levies and restrictions of all kinds that affect the importation of products originating in the territory of any Member Country.

Article 72-.

"Levies" are understood to mean the customs duties and any other charge with equivalent effect, whether fiscal or monetary in nature or related to foreign exchange, that may affect imports. Not included in this concept are analogous assessments and surcharges that correspond to the approximate cost of the services rendered.
"Restrictions of all kinds" are understood to mean any administrative, financial, or foreign exchange measure, whereby a Member Country through an unilateral decision, obstructs or hinders imports. Not included in this concept are the adoption and enforcement of measures for:
a. The protection of public morality;
b. The application of laws and regulations related to security;
c. The regulation of arms, ammunition, and other implements of war, and under exceptional circumstances, of all other military articles, as long as it does not interfere with what is provided in treaties in force between Member Countries relating to the freedom of transit;
d. The protection of human, animal, or plant life and health;
e. Import and export of metallic gold and silver;
f. The protection of national treasures of artistic, historic, or archaeological value; and
g. The exportation, use, or consumption of nuclear materials, radioactive products, or any other material that may be used in the development and use of nuclear energy.

Chapter VI. Liberalization Program

Article 73-.

For the purpose of the previous articles, the General Secretariat, on its own initiative or at the request of a party, shall determine, when necessary, if a measure adopted unilaterally by a Member Country constitutes a "levy" or "restriction."

Article 74-.

As regards taxes, assessments, and other internal charges, products originating in a Member Country shall enjoy in the territory of the other Member Country treatment that is no less favorable than that accorded to similar domestic products.

Article 75-.

The Tariff Reduction Program shall be automatic and irrevocable and it shall cover the entire product universe, except for the provisions regarding exceptions that are established in this Agreement, so that a total reduction is achieved by the dates and in the modes referred to in this Agreement. This Program shall apply, in its various forms to:
a. Products that are the subject matter of Industrial Integration Programs;
b. Products included in the Common List referred to in Article 4 of the Treaty of Montevideo of 1960;
c. Products that are not produced in any of the Subregional countries, included in the corresponding list; and d. Products not included in the above sections.

Article 76-.

Every kind of restriction shall be eliminated by December 31, 1970, at the latest. Excepted from the previous rule are restrictions applied to products reserved for Sectorial Programs and modes of industrial integration, which shall be eliminated when the reduction in their tariffs is initiated according to their respective program or mode or as provided in Article 83. Bolivia and Ecuador shall eliminate every kind of restriction at the moment in which they initiate the Tariff Reduction Program for each product, according to the procedures provided in Articles 130 and 138, but may replace them with levies that do not exceed the lowest level indicated in subsection a) of Article 82, in which case this shall apply to imports from the Subregion as well as from outside of it.

Article 77-.

The Commission shall, within the time period provided in the preceding Article and at the General Secretariat’s proposal, determine which products are to be reserved for Sectorial Programs of Industrial Development. Before October 31, 1978, the Commission, at the General Secretariat’s proposal, shall approve a list of products to be excluded from the list of those reserved for programming and shall reserve from among those not produced two lists of goods to be produced in Bolivia and Ecuador, indicating the conditions and time periods. On December 31, 1978, Colombia, Peru, and Venezuela, shall adopt for the products on this list the starting point provided in subsection a) of Article 82, and shall eliminate all of their restrictions applicable to the importation of said goods. The remaining levies shall be removed in five annual and successive reductions of ten, fifteen, twenty, twenty-five, and thirty percent, the first of which shall take place on December 31, 1979. On December 31, 1978, Colombia, Peru, and Venezuela shall eliminate the levies applicable to imports originating in Bolivia and Ecuador. Bolivia and Ecuador shall eliminate duties on the importation of these products as foreseen in section b) of Article 130 of this Agreement. Before December 31, 1995, the Commission shall approve Industrial Integration Programs and Projects with respect to products that had been reserved for that purpose.

Article 78-.

The Commission and the Member Countries shall, whenever appropriate and at any time, adopt the modes of industrial integration referred to in Article 58 and shall determine the pertinent rules, taking into account that which is provided in Chapter IV and considering the importance of industrial programming as a fundamental mechanism of the Agreement.

Article 79-.

The products included in the first section of the Common List referred to in Article 4 of the Treaty of Montevideo of 1960, shall be totally freed from all restrictions and levies on April 14, 1970.

Article 80-.

Before December 31, 1970 the Commission, at the proposal of the General Secretariat, shall draw up a list of the goods not produced in any of the countries of the Subregion and which have not been reserved for Sectorial Programs of Industrial Development. It shall select those that should be reserved for production in Bolivia and Ecuador, establishing, for the latter , the terms and reserve periods.
Products appearing on that list shall be totally freed of levies on February 28, 1971. The elimination of duties on the goods reserved for production in Bolivia and Ecuador, shall benefit those countries exclusively. Notwithstanding the foregoing, and within the period stipulated in the first paragraph of this Article, the General Secretariat may propose to the Commission that some of the products on that list be allocated to Colombia, Peru, and Venezuela. The country benefiting from the allocation shall remove the duties on the respective goods as provided for in Article 82. If the General Secretariat is able to confirm that, four years after the date of the allocation, the favored country has not initiated the corresponding production or that the project is not underway, then as of that moment the effects of that allocation shall cease and the country benefited shall immediately proceed to eliminate the tariff on the product in question.

Article 81-.

At any time after the expiration of the period indicated in the second paragraph of the foregoing Article the Commission, at the General Secretariat’s proposal, may add new products to the list referred to in the first paragraph of that same Article. Those goods shall be free from all levies sixty days after the date of approval of their inclusion on the list in question. Whenever the General Secretariat considers it to be technically and economically feasible, it shall propose to the Commission that some of the new products be reserved for production in Bolivia and Ecuador; in that case it shall stipulate the period and term of the reservation.

Article 82-.

Products not covered by Articles 77, 79, and 80 shall be freed of levies in the following manner:
a. The lowest levy for each product in any of the national schedules of customs duties of Colombia and Peru or in their respective National Lists on the date the Agreement is signed, shall be used as the starting point. Said starting point may not be higher than one hundred percent ad valorem of the CIF price of the merchandise;
b. On December 31, 1970, all of the duties above the level cited in the preceding subsection shall be reduced to that level; and
c. The remaining levies shall be eliminated in five annual and successive reductions of ten percent each, the first of which shall be made on December 31, 1971; seven annual and successive reductions of six percent each, the first of which shall be made on December 31, 1976, and a final reduction of eight percent, to be made on December 31, 1983.

Article 83-.

With respect to the products which, having been selected for Sectorial Programs and modes of Industrial Integration and which are maintained in reserve until the expiration of the period specified in the final subsection of Article 77, the Member Countries shall carry out the Tariff Reduction Program in the following way:
a. The Commission, at the General Secretariat’s proposal, shall choose two lists of not produced goods, to be produced in Bolivia and Ecuador, and shall set the periods and terms of the reservation; and
b. Before December 31, 1995, the Commission, at the General Secretariat’s proposal shall adopt a gradual tariff reduction program for the remaining products, which shall be completed by December 31, 1997. Colombia, Peru, and Venezuela shall eliminate the levies applicable to imports from Bolivia and Ecuador at the time said tariff reduction program is initiated.

Article 84-.

The Member Countries shall refrain from changing the levels of the levies and from introducing any new restrictions on the importation of products which originate in the Subregion, in any way that would create a less favorable situation than that in existence at the time the Agreement comes into effect. Excluded from the above are the changes which Bolivia and Ecuador must make in their schedules of customs duties to obtain optimum use from their trade policy instruments in order to ensure that certain production activities are initiated or expanded within their territories. These exceptions are to be reviewed by the General Secretariat and authorized by the Commission. Also excepted from this rule are changes in levies resulting from the replacement of restrictions by levies referred to in Article 46.

Article 85-.

Up until December 31, 1970, each of the Member Countries may submit to the General Secretariat a list of products currently being produced in the Subregion, in order to exempt them from the Tariff Reduction Program and from the establishment of the External Tariff. Colombia and Peru’s lists of exceptions cannot contain products that are included in more than two hundred and fifty items of the NABALALC. Within one hundred and twenty days after its Instrument of Accession to the Agreement, Venezuela will present to the General Secretariat a list of exceptions which may not cover products that are already included in more than two hundred and fifty items of the NABALALC. The products included in the lists of exceptions shall be completely free of levies and other restrictions and covered under the Minimum Common External Tariff or the Common External Tariff, whichever is appropriate, through a process that shall include three stages of 44, 44 and 87 items, the first of which shall be liberalized on December 31, 1993; the second on December 31, 1994, and the final one on December 31, 1995. Colombia, Peru, and Venezuela may maintain, after December 31, 1995, a set of residual exceptions that shall contain products that are included in no more than 75 items of the NABALALC.

Article 86-.

A Member Country’s incorporation of a product in its list of exceptions shall prevent it from enjoying the benefits deriving from the Agreement for that product. A Member Country may withdraw products from its list of exceptions at any time. In that case, the products shall comply with the Tariff Reduction Program and the External Tariff in effect for such products, in the ways and levels that are appropriate, and they shall simultaneously begin to enjoy the respective benefits. In duly qualified cases, the General Secretariat may authorize a Member Country to incorporate in its list of exceptions products that, having been reserved for Industrial Integration Programs and Projects, were not programmed. In no case shall the incorporation involve an increase in the number of corresponding items.

Article 87-.

The General Secretariat shall consider the possibility of incorporating the products Member Countries included in their lists of exceptions and in their lists of administered trade, to the Industrial Integration modes. For purposes of the previous section, interested countries shall inform the General Secretariat of their intention to participate and once the respective mode of industrial integration is agreed upon, shall withdraw the product from its list of exceptions or from its list of administered trade. Member Countries shall enter into negotiations in order to seek formulas that may allow for the liberalization of the products included in the lists of exceptions or the elimination of quotas on the products incorporated in the lists of administered trade, prior to the expiration of the corresponding deadlines.

Article 88-.

The inclusion of products in the lists of exceptions shall not affect the exportation of goods originating in Bolivia or Ecuador which have been the subject of significant trade between the respective country and Bolivia or Ecuador over the last three years or which show a strong likelihood of significant trade in the immediate future. The same shall be the case in the future for those products from Bolivia or Ecuador which appear in the lists of exceptions of any of the Member Countries and which show clear and immediate prospects of being exported from Bolivia or Ecuador to the country which has exempted them from the reduction of trade restrictions. It shall be the responsibility of the General Secretariat to determine when significant trade exists or when there is a clear likelihood that it will exist.

Article 89-.

The Member Countries shall seek to jointly reach partial-scope trade agreements, agreements of economic complementation, agricultural agreements, and trade promotion agreements, with the other Latin American countries in those sectors where it is feasible, according to the provisions of Article 98 of this Agreement and of the Montevideo Treaty of 1980.

Chapter VI. Common External Tariff

Article 90-.

Member Countries commit themselves to implementing a Common External Tariff within the time limits and in the manner established by the Commission.

Article 91-.

The Commission, at the General Secretariat’s proposal, shall approve a Common External Tariff that must provide adequate levels of protection in favor of subregional production, taking into account the Agreement’s objective of gradually harmonizing the different economic policies of the Member Countries. On the date indicated by the Commission, Colombia, Peru, and Venezuela will begin the process of approximating their levies, that apply under their national tariff schedules to the importation of products not originating within the Subregion, to the Common External Tariff, in an annual, automatic, and linear manner.

Article 92-.

Before December 31, 1970, the Commission, at the proposal of the General Secretariat, shall approve a Minimum Common External Tariff, whose objectives shall be primarily the following:
a. To establish adequate protection for subregional production;
b. To progressively create a subregional margin of preference;
c. To facilitate the adoption of the Common External Tariff; and
d. To further the efficiency of subregional production.

Article 93-.

On December 31, 1971, the Member Countries shall begin approximating their levies, that apply to imports from outside the Subregion, to the Minimum Common External Tariff, in those cases in which the former are lower than the latter, and they shall carry out this process in an annual, linear, and automatic manner, so that it is fully implemented by December 31, 1975.

Article 94-.

Notwithstanding the provisions of Articles 91 and 93 the following rules shall be applied:
a. With respect to products that are subject matter of the Industrial Integration Programs, the rules established by said Programs regarding the Common External Tariff shall govern; and with respect to products that are the subject-matter of Industrial Integration Projects, the Commission, whenever appropriate, may determine, when approving the respective Decision, the levels of levies that apply to third countries and the corresponding conditions; and
b. At any time, in fulfilling the Tariff Reduction Program, a product is freed of levies and other restrictions, it shall be subject to the full and simultaneous application of the levies established in the Minimum Common External Tariff or in the Common External Tariff, as the case may be. For goods not produced in the Subregion, each country may defer the application of the common levies until the General Secretariat verifies that its production has begun in the Subregion. Nevertheless, if in the General Secretariat’s judgment the new production is insufficient to normally meet the needs of the Subregion, it shall propose to the Commission the necessary measures to reconcile the need to protect subregional production with that of ensuring a normal supply.

Article 95-.

The Commission, at the General Secretariat’s proposal, shall be able to approve subregional margins of preference with respect to the products that are still not required to comply with the Tariff Reduction Program and the Minimum Common External Tariff, providing in the corresponding Decision the conditions and terms for its application, until they are surpassed by the rules of the Tariff Reduction Program and the Minimum Common External Tariff or the Common External Tariff.

Article 96-.

The Commission, at the General Secretariat’s proposal, may modify the common tariff levels to the extent and at the time it deems advisable in order to:
a. Adjust them to the Subregion´s needs; and
b. Provide for the special situation of Bolivia and Ecuador.

Article 97-.

The General Secretariat may propose to the Commission the measures which it considers essential to ensure normal conditions of supply in the Subregion. Any Member Country undergoing temporary supply shortages may present the problem to the General Secretariat, which shall verify the situation within a period commensurate with the urgency of the case. Once the General Secretariat verifies the existence of the problem in question and so informs the country adversely affected, the latter may take steps, such as to reduce or temporarily suspend the External Tariff duties, within the necessary limits for correcting the disturbance. In the cases referred to in the previous section, the General Secretariat shall call a special meeting of the Commission, if such is in order, or shall inform it of the action taken at its following regular meeting.

Article 98-.

The Member Countries commit themselves not to alter unilaterally the levies set in the various stages of the External Tariff. They also commit to hold the necessary consultations in the Commission before taking on obligations of a tariff nature with countries outside the Subregion. The Commission, at the General Secretariat’s proposal and through a Decision, shall state its opinion regarding said consultations, and shall set the terms with which commitments of a tariff nature must comply.

Chapter VII. Agricultural Development Programs

Article 99-.

With the purpose of promoting common agricultural and agroindustrial development and attaining greater subregional food security, the Member Countries shall carry out an Agricultural and Agroindustrial Development Program, harmonize their policies, and coordinate their national plans in the sector, bearing in mind, among others, the following objectives:
a. An improvement in the living standards of the rural population;
b. Taking care of the food and nutritional requirements of the population on satisfactory terms, to achieve the lowest possible dependence on supplies coming from outside the Subregion;
c. The appropriate and adequate supply of the subregional market and the protection against food shortage risks;
d. An increase in the production of staple foods and in productivity levels;
e. Subregional complementation and specialization of production with a view to improving the use of its inputs and to increase trade of agricultural and agroindustrial products; and
f. Subregional substitution of imports and the diversification and growth of exports.

Article 100-.

To fulfill the objectives stated in the previous article, the Commission, at the proposal of the General Secretariat, shall take the following steps, among others:
a. To create an Andean System and National Systems of Food Security;
b. Joint policies for agricultural and agroindustrial development by products or groups of products;
c. Joint programs for agricultural and agroindustrial technological development, including policies for research, training, and the transfer of technology;
d. Promotion of intra-subregional agricultural and agroindustrial trade and entering into agreements for supplying agricultural products;
e. Joint programs and policies regarding agricultural and agroindustrial trade with third countries;
f. Common rules and programs about vegetable and animal health;
g. Creation of subregional funding mechanisms for the agricultural and agroindustrial sector;
h. Joint policies for the use and preservation of the natural resources of the sector; and
i. Joint cooperative policies in the fields of research and transfer of technology in areas of common interest for the Member Countries, such as genetics, floriculture, fishing, forestry, and those that the Commission determines in the future.

Article 101-.

The Commission and the General Secretariat shall adopt the necessary steps to hasten the agricultural and agroindustrial development of Bolivia and Ecuador as well as their participation in the enlarged market.

Article 102-.

Any Member Country may apply, in a non-discriminatory, manner, to the trade of products incorporated in the list referred to Article 104, the following measures destined to: a. Restrict imports to what is necessary in order to cover internal production deficits; and b. To level the prices of the imported product with those of the national product. For the application of such measures, when appropriate, the Member Countries shall carry out actions through the existing national agencies, destined to the supply of agricultural and agroindustrial food products.

Article 103-.

The country imposing the measures referred to in the previous article shall immediately notify the General Secretariat, enclosing a report on the underlying reasons for its action. These measures shall be applied to Bolivia and Ecuador only in duly qualified cases and after the General Secretariat has confirmed that the damage arises essentially from their imports. The General Secretariat is required to express its views within fifteen days after receiving the report, and it may authorize application of the measures. Any Member Country that considers itself affected by said measures may present its comments to the General Secretariat. The General Secretariat shall study the case and propose to the Commission the positive measures that it deems advisable in the light of the objectives provided in Article 99. The Commission shall decide with respect to the restrictions that were applied and the measures proposed by the General Secretariat.

Article 104-.

Before December 31, 1970, the Commission, at the proposal of the General Secretariat, shall determine the list of agricultural products for purposes of applying Articles 102 and 103. Such list may be modified by the Commission, at the proposal of the General Secretariat.

Chapter VIII. Competition

Article 105-.

Before December 31, 1971, the Commission, shall adopt, at the General Secretariat’s proposal, the rules which are needed to guard against or correct practices which may distort competition within the Subregion, such as dumping, improper price manipulations, maneuvers made to upset the normal supply of raw materials and others with a like effect. In this respect, the Commission shall consider the problems that could derive from the imposition of levies and other restrictions on exports. It shall be the General Secretariat’s responsibility to ensure the application of those rules in the particular cases that are reported.

Article 106-.

The Member Countries may not adopt corrective measures without the General Secretariat’s prior authorization. The Commission shall regulate the procedures for implementing the rules of this Chapter.

Chapter XI. Safeguard Clauses

Article 107-.

A Member Country, that has adopted measures to correct a disequilibrium in its overall balance of payments, may extend such measures, when previously authorized by the General Secretariat in a transitory and nondiscriminatory manner, to intrasubregional trade of products incorporated to the Tariff Reduction Program. The Member Countries shall seek to ensure that the application of restrictions due to a balance of payments situation does not affect, within the Subregion, trade in products incorporated to the Tariff Reduction Program. When the situation provided for in this Article requires an immediate response, the interested Member Country may apply, on an emergency basis, the foreseen measures, having in that regard to immediately notify them to the General Secretariat, which shall express its views within the following thirty days, either authorizing, modifying, or suspending them. If the application of the measures provided for in this Article lasts more than one year, the General Secretariat, on its own initiative or upon the request of any of the Member Countries, shall propose to the Commission that negotiations be immediately initiated in order to seek the elimination of the adopted restrictions.

Article 108-.

If the execution of the Tariff Reduction Program of the Agreement causes or threatens to cause serious damage to the economy of a Member Country or to one of its significant economic sectors, that country may, with the prior permission of the General Secretariat, apply temporary corrective steps in a nondiscriminatory manner. When necessary, the General Secretariat may propose to the Commission collective cooperation measures for the purpose of surmounting the problems that arise. The General Secretariat shall periodically study the evolution of the situation to keep the restrictive measures from lasting any longer than is strictly necessary or to consider new formulas for cooperation, if appropriate. When the injuries dealt with in this Article are so serious that they require immediate steps, the Member Country adversely affected may apply corrective measures temporarily, on an emergency basis, subject to the subsequent pronouncement of the General Secretariat. Those measures shall do the least damage possible to the Tariff Reduction Program, and so long as they are implemented unilaterally, they may not involve a decrease in the importation of the product or products in question in terms of the average for the twelve preceding months. The Member Country which adopts those measures shall immediately inform the General Secretariat thereof and the latter shall issue its views on them within the thirty following days, either to authorize, modify, or suspend them.

Article 109-.

When a product originating in the Subregion is being imported in such quantities or conditions as to cause a disturbance in the domestic production of specific products of a Member Country, it may apply corrective measures, that are nondiscriminatory and of a temporary nature, subject to the subsequent pronouncement of the General Secretariat. The Member Country that applies the corrective measures, within no more than sixty days, must notify the General Secretariat and present a report regarding the underlying grounds for their application. The General Secretariat, within sixty days after receiving the aforementioned report, shall verify the disturbance and the origin of the imports causing it, and shall issue its pronouncement, either to suspend, modify, or authorize said measures, which may only be applied to the products of the Member Country where the disturbance originated. The corrective measures that are applied shall guarantee access for a volume of trade not inferior to the average for the last three years.

Article 110-.

If a currency devaluation made by one of the Member Countries alters the normal conditions of competition, the country which considers itself to be adversely affected may bring the case before the General Secretariat, which should hand down its opinion briefly and summarily. Once the General Secretariat has verified, the existence of the disturbance, the adversely affected country may take temporary corrective measures so long as the condition exists, while abiding by the General Secretariat’s recommendations. In any case, those measures may not involve a reduction in the levels of imports existing prior to the devaluation. Without prejudice for the application of the temporary measures referred to, any of the Member Countries may request that the Commission give a final decision on the matter. The Member Country which devalued its currency may request at any time that the General Secretariat review the situation, in order to ease or eliminate the cited corrective measures. The General Secretariat’s opinion may be amended by the Commission. In the situation referred to in this Article, the country which considers itself to be adversely affected may, in presenting the case to the General Secretariat, propose protective measures that are commensurate with the magnitude of the alleged disturbance, accompanied by the technical grounds for its proposal. The General Secretariat may request any supplementary information it considers advisable. The brief and summary pronouncement of the General Secretariat shall be given within a period of one month after the request is received. If the General Secretariat does not hand down its opinion within that period and the requesting country feels that said delay may be harmful to its interests, it may adopt the initial measures which it proposed; it shall immediately inform the General Secretariat thereof and the latter, in its subsequent opinion, shall decide whether the measures taken should be maintained, modified, or eliminated. In its pronouncement, the General Secretariat shall bear in mind, among other criteria, the economic indicators on the conditions of competition in the Subregion which the Commission may have adopted generally, at the General Secretariat’s proposal, the individual characteristics of the foreign exchange systems of the Member Countries and any studies which the Monetary and Foreign Exchange Council carries out on the matter. Until the system of economic indicators has been adopted by the Commission, the General Secretariat shall proceed according to its own criteria. Notwithstanding the foregoing, if, during the period between the presentation in question and the General Secretariat’s pronouncement, in the opinion of the applicant Member Country, there are background factors which give reasonable grounds to fear that, as a result of the devaluation, there shall be immediate harmful effects which may have serious implications for its economy and thus call for the adoption of protective measures on an emergency basis, it may bring the situation before the General Secretariat; the latter, if it finds the request to be well grounded may authorize the implementation of suitable measures, for which purpose it shall be given a period of seven continuous days. The General Secretariat’s final pronouncement on the alteration of the normal conditions of competition shall, in any case, determine whether the authorized emergency measures shall be maintained, modified, or suspended. The measures that are adopted in keeping with this Article may not involve a decrease in the levels of trade which existed prior to the devaluation. The second and third subsections of this Article shall be fully applicable to these measures.

Article 111-.

No safeguard clauses of any kind shall be applied to the importation of products originating in the Subregion and included in the Programs and Projects of Industrial Integration.

Chapter X. Origin

Article 112-.

The Commission shall, at the General Secretariat’s proposal, adopt any special rules necessary for determining the origin of goods. Such rules shall constitute a dynamic instrument for the development of the Subregion and shall appropriately contribute to the attainment the Agreement’s objectives.

Article 113-.

It shall be the General Secretariat’s responsibility to establish the specific requirements of origin for the products requiring so. When an Industrial Integration Program calls for setting specific requirements, the General Secretariat shall decide on them as the corresponding program is being approved. Within the year following the establishment of a specific requirement, the Member Countries may request its review by the General Secretariat, which must give its opinion summarily If a Member Country so requests it, the Commission shall examine those requirements and make a final decision within six to twelve months after having been set by the General Secretariat. The General Secretariat may, at any time, either on its own initiative or at the request of a party, set or modify said requirements in order to adjust them to the economic and technological progress of the Subregion.

Article 114-.

In adopting and deciding on the special rules or specific requirements of origin, as the case may be, the Commission and the General Secretariat shall seek to ensure that they do not hinder Bolivia and Ecuador from taking advantage of the benefits of implementing the Agreement.

Article 115-.

The General Secretariat shall ensure compliance with the rules and requirements of origin in subregional trade. It shall, moreover, propose any measures necessary for resolving problems of origin that hinder the attainment of the Agreement’s objectives.

Chapter XI. Physical Integration

Article 116-.

The Member Countries shall develop joint actions in order to improve the use of physical spaces, to strengthen the infrastructure and services that are necessary to promote the process of economic integration of the Subregion. This action shall be taken primarily in the fields of energy, transportation, and communications and shall cover the necessary measures for facilitating border traffic among the Member Countries. To this end, the Member Countries shall seek to establish multinational entities or businesses when possible and desirable for assisting in the execution and administration of those projects.

Article 117-.

The Commission shall, at the General Secretariat’s proposal, adopt programs in the fields referred to in the preceding Article in order to promote a continuous process aimed at expanding and modernizing the physical infrastructure and the transportation and communications services of the Subregion. These programs shall include insofar as possible, the following:
a. The identification of specific projects for incorporation in the national development plans and an indication of the order of priority for their execution:
b. The essential steps for financing the necessary preinvestment studies;
c. The technical and financial assistance needs to ensure the execution of the projects; and
d. The methods of joint action before the Andean Development Corporation and the international lending institutions to ensure that the required financial resources shall be provided.

Article 118-.

The Programs referred to in the foregoing Article, as well as the Programs and Projects of Industrial Integration, shall include measures of collective cooperation to adequately cover the essential infrastructure required for their execution and shall give special consideration to the situation of Ecuador and the landlocked situation of Bolivia.

Chapter XII. Financial Matters

Article 119-.

The Member Countries shall carry out actions and coordinate their policies regarding financial and payments matters, to the extent necessary to facilitate the attainment of the Agreement’s objectives. For that purpose, the Commission, at the General Secretariat’s proposal, shall adopt the following actions:
a. Recommendations to channel the financial resources through the appropriate bodies, to meet the development requirements for the Subregion;
b. Promotion of investments for the Andean integration programs;
c. Financing of trade between the Member Countries and with countries outside the Subregion;
d. Measures that facilitate the movement of capital within the Subregion and particularly the promotion of Andean multinational companies;
e. Coordination of positions to strengthen the reciprocal payments and lending mechanisms within the framework of the ALADI;
f. Establishment of an Andean lending and payments system that includes the Andean Reserve Fund, a common unit of accounting, lines of credit for trade, a subregional clearinghouse, and a system of reciprocal credits;
g. Cooperation and coordination of positions with respect to external funding problems of the Member Countries; and
h. Coordination with the Andean Development Corporation and the Andean Reserve Fund for the purposes described in the preceding subsections.

Article 120-.

If, as a result of the fulfillment of the Tariff Reduction Program of the Agreement, a Member Country experiences problems with its fiscal revenues, the General Secretariat may propose to the Commission, at the request of the country affected, measures for resolving those difficulties. In its proposals, the General Secretariat shall take into account the degrees of relative economic development of Member Countries.

Chapter XIII. Special Regime for Bolivia and Ecuador

Article 121-.

In order to gradually lessen the differences in development currently existing in the Subregion, Bolivia and Ecuador shall enjoy a special regime; this shall enable them to attain more rapid economic growth through effective and immediate participation in the benefits of the industrialization of the area and of the liberalization of trade. To fulfill the aim of this Article, the bodies of the Agreement shall propose and take necessary measures, in accordance with its rules.

Section A. On the Harmonization of Economic Policies and the Coordination of Development Plans

Article 122-.

In harmonizing economic and social policies and coordinating the plans referred to in Chapter III, differential treatments and sufficient incentives shall be established to compensate for the structural weaknesses of Bolivia and Ecuador and to ensure that the essential resources for attaining the objectives envisaged for their benefit by the Agreement are mobilized and allocated.

Section B. On Industrial Policy

Article 123-.

When carrying out the Industrial Development Programs, Bolivia and Ecuador’s situation shall be given special consideration in assigning, on a priority basis, the productions in their favor and the corresponding locations of the production facilities in their territories, specially through participation in the modes of industrial integration provided in Article 58. It shall also consider the development of a program for the integral industrialization of the natural resources of Bolivia and Ecuador.

Article 124-.

The Programs and Projects of Industrial Integration shall provide for exclusive benefits and effective preferential treatments for Bolivia and Ecuador to help them effectively take advantage of the subregional market.

Article 125-.

The General Secretariat, in proposing to the Commission the complementary measures envisaged in Article 69, shall provide for exclusive advantages and preferential treatment for Bolivia and Ecuador, when necessary. The Commission, at the General Secretariat’s proposal, shall adopt the measures that are necessary to ensure that the allocations granted to Bolivia and Ecuador, are effective and fully utilized, specially those aimed at strengthening commitments to respect the allocations made to those countries, to extend the time periods for the maintenance of the allocations, and to carry out the projects assigned in the Industrial Development Programs.

Section C. On Trade Policy

Article 126-.

To Enable Bolivia and Ecuador to Participate Immediately In the Benefits of the Enlarged Market, the Member Countries Shall, In an Irrevocable and Exclusive Manner, Eliminate for Them All Levies and Restrictions of All Kinds on the Importation of Products Originating In the Territories of the Two Countries, In the Terms Provided In Articles 127 and 128.

Article 127-.

For the Purposes Indicated In the Previous Article, Products Originating In Bolivia and Ecuador Shall Be Governed by the Following Rules:
a. by December 31, 1973 at the Latest, the Products Included In Subsection D) of Article 75 Shall Have Free and Definitive Access to the Subregional Market. Accordingly, the Levies Shall Be Eliminated Automatically In Three Annual and Successive Reductions of Forty, Thirty, and Thirty Percent, Respectively, the First of Which Shall Be Made on December 31, 1971, Using as a Starting Point the Levels Indicated In Paragraph a) of Article 82;
b. the Commission, at the General Secretariat’s Proposal and Prior to December 31, 1970, Shall Approve Lists of Products Whose Tariffs Shall Be Eliminated for the Benefit of Bolivia and Ecuador on January 1, 1971;
c. the Products on the List Referred to In the Third Subsection of Article 77 Shall Be Totally Freed from Levies for Bolivia and Ecuador on December 31, 1978 and the Products Referred to In Article 83, Shall Be Freed at the Time the Corresponding Tariff Reduction Program Is Begun.
d. Before March 31, 1971, the Commission, at the General Secretariat’s Proposal, Shall Establish Margins of Preference In Favor of the Two Lists of Products of Special Interest to Bolivia and Ecuador and Shall Decide on the Length of Time That such Margins, Which Are to Enter Into Force on April 1, 1971, Shall Be In Effect. the List Referred to In this Paragraph Is Comprised of Products from Subsection D) of Article 75; and
e. the Same Procedure as That Indicated In Subsection D) Shall Be Observed In Connection with a List of Products from Those Referred to In Article 83.

Article 128-.

The Elimination of Levies on the Products of the Common List for Which the Member Countries Have Granted Exclusive Advantages to Bolivia and Ecuador, Shall Apply Only for Their Benefit. Said Exclusiveness Is Restricted to the Country Which Granted That Benefit.

Article 129-.

The Corrective Measures Referred to In Articles 102 and 108 Shall Be Extended to Imports from Bolivia and Ecuador Only In Duly Qualified Cases and When the General Secretariat Has Been Able to Ascertain That the Serious Adverse Effects Substantially Derive from Those Imports. In this Case, the General Secretariat Shall Observe the Procedures of Articles 103 and 108 and the Rules Adopted by the Commission at the General Secretariat’s Proposal with Respect to the Corresponding Safeguard Regulations.

Article 130-.

Bolivia and Ecuador shall carry out the tariff reduction programs in the following way:
a. They shall liberalize the products incorporated in the industrial integration programs in the manner provided for in each;
b. They shall liberalize the Products Referred to In Article 83 in the matter and within the time period determined by the Commission, at the General Secretariat’s Proposal. In making that decision, the Commission and the General Secretariat shall mainly take into account the benefits derived from the Programming and Site location referred to In Article 123. This time period may not dxceed from December 31, 1999;
c. They shall liberalize the products that are not yet produced in the subregion and that are not part of the reserve provided in their favor in Article 80, sixty days after the Commission approves said reserve.
Nevertheless, those products that the General Secretariat, on its own Initiative or upon Bolivia or Ecuador’s request, determines to be luxuries or dispensable, may be excepted from this Treatment. The subsequent tariff reduction for these products shall be subject to the procedure provided In Paragraph D) of this Article; and
d. They shall commence on November 21, 1988, the implementation of the tariff reduction program for products not covered by the preceding paragraphs by the elimination of all restrictions. This shall be followed by three successive annual reductions of five percent each, beginning on December 31, 1988. Once these reductions have been made, the program shall be discontinued until such time as the Commission, within ninety days, upon a proposal from the General Secretariat and after an evaluation of the compliance of all Member States with the tariff reduction program, decides upon the appropriate adjustments and establishes the periods and methods for its continuation. With respect to the tariff reductions previously provided for, on August 23, 1988, the Commission shall establish the starting point for the tariff reduction on the basis of the respective national tariffs of Bolivia and Ecuador, which shall be bound and in force on that date.

Article 131- .

The General Secretariat shall periodically evaluate the results achieved by Bolivia and Ecuador in their trade with the other Member States and the extent to which they are actually taking advantage of the expanded market. On the basis of these evaluations, the Commission may review the deadlines indicated in paragraphs B) and D) of the preceding Article.

Article 132-.

The exemption lists of Bolivia and Ecuador may include products included in not more than six hundred headings of the NABALALC. The products included by Bolivia and Ecuador in their exception lists shall be exempted from duties and other restrictions by a procedure comprising three sections of 105, 105, and 210 headings, the first of which shall be released on December 31, 1997, the second on December 31, 1998, and the last on December 31, 1999. These deadlines may be extended by the General Secretariat in duly justified cases. After December 31, 1999, or after the expiration of the extension, Bolivia and Ecuador shall maintain a balance of derogations which shall not include products included in more than 180 positions of the NABALALC.

Article 133-.

Within the framework of the cooperation policy referred to in Article 68, the General Secretariat shall give special and priority attention to the industries of Bolivia and Ecuador, whose products are excluded from the tariff reduction programs of these countries, in order to contribute to their participation in the subregional market as soon as possible.

Section D. Common External Tariff

Article 134-.

Bolivia and Ecuador shall begin the process of adoption of the Common External Tariff on an annual, automatic, and linear basis on the date established by the Commission. Bolivia and Ecuador shall be required to adopt the Minimum Common External Tariff with regard to products which are not produced in the Subregion, as referred to in Article 80. In relation to such products they shall adopt the minimum tariff levels through a linear and automatic process which shall be concluded three years after the date in which they are first produced in the Subregion. Without prejudice to the stipulations of the first subsection of this Article, the Commission, at the proposal of the General Secretariat, may determine that Bolivia and Ecuador should adopt the minimum tariff levels with regard to products of interest to the other Member Countries provided that the application of such levels does not cause disturbances to Bolivia or Ecuador. The Commission, based on the evaluations referred to in Article 131, shall determine the procedure and time limit for the adoption of the Common Minimum Common External Tariff on the part of Bolivia and Ecuador. In any case, the Commission shall bear in mind the problems derived from the landlocked situation of Bolivia referred to in Article 4 of this Agreement. At the General Secretariat’s proposal, the Commission may also determine the adoption of the minimum tariff levels on the part of Bolivia and Ecuador regarding products whose importation from outside of the Subregion may cause serious disturbances to the Subregion. In drafting its proposals about the Common External Tariff, the General Secretariat shall bear in mind the provisions of Article 4 in favor of Bolivia.

Article 135-.

Bolivia and Ecuador may establish the exceptions authorized by the Commission, at the General Secretariat’s proposal, to the process of approximation of their national tariff schedules to the Common External Tariff so as to enable them to apply their existing industrial development laws, mainly with respect to the importation of capital goods, intermediate goods, and raw materials necessary for their development. Such exceptions shall not be applied in any case more than two years before the Common External Tariff is fully implemented.

Section E. On Financial Cooperation and Technical Assistance

Article 136-.

The Member Countries commit themselves to act jointly before the Andean Development Corporation and any other subregional, national, or international organizations to secure technical assistance and financing for Bolivia and Ecuador’s development needs and specially for projects related to the process of integration. The allocation of the resources for those projects should be made in accordance with the basic objective of reducing the existing differences in development among the countries while making an attempt to favor Bolivia and Ecuador markedly. The Member Countries, moreover, shall act jointly before the Andean Development Corporation so that it allocates its regular and special resources in such a way that Bolivia and Ecuador receive a substantially larger share than would result if the distribution were to be made proportional to the countries´ contribution to the Corporation’s capital.

Section F. General Provisions

Article 137-.

In its periodic evaluations and annual reports, the General Secretariat shall give separate and special consideration to Bolivia and Ecuador’s situation in the subregional integration effort and shall propose to the Commission the measures which it deems appropriate to substantially improve their possibilities for development and increasingly expedite their participation in the area’s industrialization. 

Article 138-.

The Commission may establish in favor of any of the least developed countries more favorable condition´s and procedures than those considered in this Chapter, bearing in mind the degree of development achieved and the conditions for taking advantage of the benefits of integration.