It is set up on the basis of free trade zones and eventually to lead to a common market. Before MERCOSUR there was ALALC, the Latin American Free Trade Association. It was formed in 1960 and set up free trade zones through the periodic negotiations between the members of the association. ALALC ended in the 1970's due to these negotiations because they were left to the discretion of the countries involved and unfair practices started to occur. After ALAC, came ALADI, the Latin American Integration Association. Founded in 1980, it established economic preference zones instead of free trade. This encouraged economic growth and increased actions and agreements between countries that previously had no connections. In 1986 Argentina and Brazil signed a Treaty for Integration, Cooperation, and Development which was originally set up to remove tariff barriers and tie together the macroeconomic policies of the two countries. This Treaty is what led to MERCOSUR. MERCOSUR is a process of integration to form a common market on the foundations of open regionalism. In March of 1991 Paraguay and Uruguay joined MERCOSUR and most recently Chile became a part of the market in 1996. The goals set by the agreement are to create free transit of production goods and lifting of non-tariff restrictions on transit goods. It was set up to adopt a common trade policy with nations that are not a part of the market and to set up a fixed common external tariff for all to follow. There are quite a few other goals that was set by MERCOSUR including a clause that states that the countries involved will be able to adjust their laws for the purpose of strengthening the agreement. The main point of MERCOSUR is to set up free trade among South American countries and to encourage new countries to join (americasnet.com). Another related trade agreement conveying the benefits of international trade is the General Agreement on Trade and Tariffs (GATT).