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In the case of the free trade agreement executed with the United States of Americanand Canada (NAFTA), the importation of the majority of merchandise to and from Mexico,the United States, and Canada is duty free. In the case of other free trade agreements,the tariff elimination schedules are in the process of being created; it is currently necessaryto verify the status applicable to each particular good at this time.Obviously, in all cases there are certain goods that, due to their strategic importance orother reasons, are not included in the scope of the application of the free trade agreementsexecuted by Mexico, such as hydrocarbons, fuels, and certain agricultural products.2.2. Percentual Preferential Tariffs160C H A P T E R V I I IPercentual preferential tariffs are those that the parties to a trade agreement grant reciprocally.They consist of a percentage reduction of the duties applicable to the importationsfrom other countries. This means that the tariffs applicable to the importation of goodsinto each of the parties will be reduced by the percentage agreed upon with each country.This benefit is not applicable to merchandise that has been expressly excluded.A clear example of a percentual preferential tariff is the regional preferential tariff inArticle 5 of the 1980 Montevideo Treaty, which gave rise to the Latin American IntegrationAssociation (Asociación Latinoamericana de Integración, ALADI). Based on the RegionalAgreement Number 4 and the Second and Third Protocols amending it, the regionalpreferential tariffs are the following: Paraguay (48 percent), Ecuador (40 percent), Cuba(28 percent), Argentina and Brazil (20 percent).Within the ALADI framework, the agreements take the form of a partial reach agreementthat has been executed only between member countries. The tariff benefits are onlyapplicable between those members of ALADI that execute them and with respect to themerchandise expressly included in such agreements. The complementary economicagreements that Mexico has executed with Argentina and Brazil, which contemplate percentualtariff reductions between 50 and 100 percent, have been particularly significant.Finally, some member countries of ALADI, such as Venezuela, Colombia, Chile, Uruguay,and Bolivia, have executed free trade agreements with Mexico that incorporate thetariff preferences agreed to in Regional Agreement Number 4.3. Customs RegulationsThe Customs Law (Ley Aduanera, LAA) regulates the different customs regimes underwhich merchandise can be imported and exported to and from Mexican territory. Eachof these regimes entails various obligations for importers regarding, among other things,the payment of tariffs and levies on imports and compliance with non-tariff regulationsand restrictions.