exercised chiefly in the fields of power, transportation, and communications and shall include, particularly, the measures required to facilitate border traffic between Member Countries.

To that end, the Member Countries shall favor the establishment of multinational entities or enterprises when that is possible and advisable in order to facilitate the execution and administration of the said projects.

ARTICLE 87

Before December 31, 1972, the Board shall prepare initial programs in the fields indicated in the preceding article and shall submit them to the Commission for consideration. These programs shall include, in so far as possible, the following:

(a) Identification of specific projects to be included in the national development plans and the order of priority in which they are to be executed;

(b) The measures essential to the financing of any preinvestment studies that are necessary;

(c) The technical and financial assistance needed to ensure execution of the projects; and

(d) The procedures for joint action vis-à-vis the international credit agencies and, particularly, the Andean Development Corporation, to ensure that the financial resources will be provided which cannot be obtained in the Subregion.

The carrying out of these initial programs will mark the start of a continuous process, designed to expand and to modernize the physical infrastructure of the Subregion.

ARTICLE 88

The programs with which the preceding article deals and the Sectoral Programs of Industrial Development shall include measures involving collective cooperation in order to meet adequately the infrastructure requirements essential to their implementation and shall take into consideration in a special way the situation of Ecuador and the territorial characteristics and landlocked position of Bolivia.

CHAPTER 12. FINANCIAL MATTERS

ARTICLE 89

The Member Countries shall coordinate their national policies on financial matters and payments to the extent required to facilitate the attainment of the objectives of the Agreement.

For those purposes the Board shall submit to the Commission proposals on the following matters, among others:

(a) Channeling of the flow of public and private savings of the subregion to the financing of investments intended for the development of industry, agriculture, and infrastructure, within the context of the expanded market;

(b) Financing of trade between the Member Countries and with those outside the Subregion;

(c) Measures that will facilitate the circulation of capital within the Subregion, particularly such capital as is intended for the expansion of industry, services, and trade, in terms of the expanded market;

(d) Strengthening of the system of the multilateral compensation of bilateral balances in effect among the Central Banks of LAFTA in terms of the needs of subregional trade and the possible establishment of a Subregional Clearing House for Payments and of a system of reciprocal credits;

(e) Guidelines designed to solve any problems to which double taxation may give rise; and

(f) Creation of a common reserve fund.

ARTICLE 90

If, as a result of the implementation of the Agreement's Liberalization Program, a Member Country experiences difficulties related to its fiscal revenues, the Board may propose to the Commission, at the request of the country affected, measures to solve such problems. In its proposals, the Board shall take into account the degree of relative economic development of the Member Countries.

CHAPTER 13. SPECIAL TREATMENT FOR BOLIVIA AND ECUADOR

ARTICLE 91

In order gradually to reduce the differences in development now existing in the Subregion, Bolivia and Ecuador shall enjoy special treatment that will enable them to attain a more accelerated rate of economic development through their effective, immediate participation in the gains from the industrialization of the area and the liberalization of trade.

In order to attain the objective set forth in this article, the organs of the Agreement shall propose and shall adopt the necessary measures in conformity with the rules thereof.

Section A. Harmonizing Economic Policies and Coordinating Development Plans

ARTICLE 92

In harmonizing economic and social policies and in coordinating the plans with which Chapter 3 deals, special treatment and adequate incentives must be established that will offset the structural deficiencies of Bolivia and Ecuador and will ensure the mobilizing and assigning of the resources that are essential to attain the objectives that the Agreement envisages for their benefit.

Section B. Industrial Policy

ARTICLE 93

In the industrial policy for the Subregion, special consideration shall be given to the situation of Bolivia and Ecuador by assigning

production to them on a priority basis, and, consequently, locating plants within their territories, especially through their participation in the Sectoral Programs of Industrial Development.

ARTICLE 94

The Sectoral Programs of Industrial Development shall include exclusive advantages and effective preferential treatment for the benefit of Bolivia and Ecuador so as to enable them to participate effectively in the subregional market.

ARTICLE 95

The Board, when proposing to the Commission the supplementary measures specified in article 35, shall include exclusive advantages and preferential treatment for the benefit of Bolivia and Ecuador in those cases where it is necessary.

Section C. Trade Policy

ARTICLE 96

In order to enable Bolivia and Ecuador to share immediately in the benefits of the expanded market, the Member Countries shall irrevocably and non-extensively accord them exemptions from duties, charges, and restrictions of all kinds on the importation of products coming from their territories, as provided for in articles 97 and 98.

ARTICLE 97

For the purposes indicated in the preceding article, products coming from Bolivia and Ecuador shall be governed by the following rules:

(a) No later than December 31, 1973 the products included in article 45 (d) shall have free and permanent access to the subregional market. To that end, duties and charges shall be eliminated automatically in three annual, successive reductions of 40, 30, and 30 percent, respectively, the first of which shall take place on December 31, 1971, taking as a point of departure the levels indicated in article 52(a);

(b) The Commission, at the Board's suggestion, shall, before December 31, 1970, approve lists of products that will be exempted for the benefit of Bolivia and Ecuador on January 1, 1971;

(c) The products referred to in article 53 shall be completely exempted from duties and charges for the benefit of Bolivia and Ecuador on January 1, 1974 or January 1, 1976, depending on whether or not they were subject to an extension, as provided for in article 47;

(d) Before March 31, 1971 the Commission shall, at the Board's suggestion, establish a margin of preference in favor of each list of products of special importance to Bolivia and Ecuador and shall determine the periods during which the said margins shall be maintained, which shall be put into effect on April 1, 1971.

The lists to which this subsection refers shall be composed of products included in article 45 (d); and

(e) The same procedure as that indicated under subsection (d) shall be followed in connection with a list of products which, having been reserved for Sectoral Programs of Industrial Development, were not included in them within the periods established in article 47.

ARTICLE 98

The exemption of the products on the Common Schedule for which the Member Countries have accorded non-extensive advantages in favor of Bolivia and Ecuador shall be in effect exclusively for their benefit. The said exclusivity shall be limited to the country that has accorded the particular advantage.

ARTICLE 99

The corrective measures referred to in articles 72 and 79 shall be extended to imports from Bolivia and Ecuador only in cases that have been duly authorized and after the Board has ascertained that the serious harm has been caused essentially by the said imports. The Board shall follow, in this matter, the procedures mentioned in the said article 79 and in article 4 of Resolution 173 (CM-I/III-E) of LAFTA.

ARTICLE 100

Bolivia and Ecuador shall implement the Liberalization Program in the following manner:

(a) They shall exempt the products included in Sectoral Programs of Industrial Development in the manner established in each of them;

(b) They shall exempt products which, having been reserved for the said programs, were not included in them, in the manner and within the period determined by the Commission, at the suggestion of the Board. In order to make such determination, the Commission and the Board shall take into account, basically, the benefits that are derived from the programming and locating referred to in article 93;

(c) The time limit established by the Commission may not exceed by more than five years the one established in article 52(c);

(d) They shall exempt products now or hereafter included in the Common Schedule in the manner and within the time limits specified in the Treaty of Montevideo and in the pertinent Resolutions of the Conference;

(e) They shall exempt products that are not yet produced in the Subregion and which do not form part of the reserve provided for their benefit in article 50 sixty days after the Commission approves the said reserve.

However, they may except from this treatment those products that the Board, automatically or at the request of Bolivia or Ecuador, labels for these purposes luxury or nonessential products.

These products shall, for purposes of their subsequent exemption from customs duties, be subject to the procedure established in (f) of this article; and

(f) They shall exempt the products that are not included under the foregoing subsections on the basis of their national tariffs through successive annual reductions of ten percent each, the first one of which will be effected on December 31, 1976. However, Bolivia and Ecuador may initiate the exemption of these products from customs duties in the course of the first six (6) years in which the Agreement is in force.

ARTICLE 101

The Board shall evaluate from time to time the results obtained by Bolivia and Ecuador in their trade with the other Member Countries and the extent to which they are actually availing themselves of the benefits of the expanded market. On the basis of these evaluations, the Commission may revise the time limits indicated under subsections (c) and (f) of the preceding article.

ARTICLE 102

Bolivia's schedule of exceptions may include products included in not more than 350 Items and in 50 Subitems of the LAFTA Brussels Tariff Nomenclature. Ecuador's schedule may not contain more than 600 items. This number may be modified by the Commission as provided for in article 55, paragraph two.

The products included by Bolivia and Ecuador in their schedules of exemptions shall be completely exempted from duties, charges, and other restrictions no later than December 31, 1990. This time limit may be extended in cases that have been duly authorized by the Board. With respect to everything else, articles 55, 56, and 57 shall apply to the schedules of exceptions of Bolivia and Ecuador.

The rules set forth in the first paragraph of article 54 shall not apply to the products included by Bolivia and Ecuador in their schedules of exceptions.

ARTICLE 103

In the preparation of the Programs to which articles 36 and 37 refer, the Commission and the Board shall give special attention on a priority basis to the industries of Bolivia and Ecuador whose products are excepted by the said countries from the Liberalization Program, in order to help enable them to participate in the subregional market as soon as possible.

Section D. The Common External Tariff

ARTICLE 104

Bolivia and Ecuador shall initiate the process of adopting the Common External Tariff on an annual, automatic, and linear basis on December 31, 1976 and shall complete it on December 31, 1985.