Customs duties are levied based on the Andean Pact's common external tariff (CET), divided among 4 rates: 5%, 10%, 15%, or 20%. At the government's discretion, export duties may also be levied. Transit duties are required on certain goods, including hides, cocoa, coffee, and cotton. The government may also increase duties on items coming in from certain countries; in addition, it may establish import quotas or subject imports to licensing to protect domestic industry.
In 1967, Venezuela joined the Latin American Free Trade Association (LAFTA), which became the Latin American Integration Association (LAIA) in 1981. The ad valorem duty system was adopted in 1973 to harmonize Venezuela's tariff structure with that of the other members of the Andean Pact. The average tariff rate is 10% except for automobiles, which carry a duty of 35%. Venezuela has three free trade zones: the Isla de Margarita, the Paraguaná Peninsula Industrial Zone, and the Port of La Guaira.
After several years of negotiations, the Group of Three (Colombia, Mexico, and Venezuela) signed a free trade agreement in Cartagena. The agreement went into effect at the beginning of 1995 and commits the countries to lifting most trade restrictions by 2007. In 1995, Venezuela also implemented the Andean Pact with Colombia and Ecuador that established common external tariffs. Venezuela also has a preferential agreement with the Caribbean Common Market (CARICOM), which started tariff reductions in 1998. Venezuela also has a free trade accord with the Southern Cone Common Market (MERCOSUR).