Treaty of Lima (1929)

The Tacna–Arica compromise or Treaty of Lima was a series of documents that settled the territorial dispute of both Tacna and Arica provinces of Peru and Chile respectively. According to the Treaty, the Tacna-Arica Territory was divided between both countries; Tacna being awarded to Peru and with Chile retaining sovereignty over Arica. Chile also agreed to pay up to 6 million dollars in compensation to Peru.
The Treaty was signed on June 3, 1929, in the city of Lima by then Peruvian Representative Pedro José Rada y Gamio and Chilean Representative Emiliano Figueroa Larrain.
The controversy was a direct aftermath of the War of the Pacific (1879–1883), a confrontation that involved Chile against Peru and Bolivia. Chile won the war and conquered the Peruvian territories of Tarapacá, Tacna and Arica. The defeated Peruvian government was forced to sign the Treaty of Ancón in 1883.
In this Treaty, Tarapacá was annexed to Chile. However, the fate of both Tacna and Arica was to be decided by a plebiscite to be held in 1893. Since there were different points of view in both countries on the conditions of the plebiscite, it was not held. Then, Chile began to colonize the two territories in 1909. Peru followed in 1911 with a break of diplomatic relations. In 1922, Chile and Peru agreed to arbitrate the dispute with the President of the United States. US President Calvin Coolidge appointed, in 1925, the first US arbitrator, General John J. Pershing; General William Lassiter followed in 1926. Neither negotiator was able to break the deadlock. US Secretary of State Frank B. Kellogg suggested direct negotiations in Washington, D.C. in 1928. It was these negotiations that led to the Treaty of Lima (1929).
The deal that was finally reached allowed Peru to reacquire Tacna while Chile kept Arica. Chile had also to make some concessions such as building a Peruvian-administered wharf in Arica and pay a six million-dollar indemnification, among other provisions. In 1999, Chile and Peru at last agreed to fully implement the Treaty of Lima, providing Peru with access to port facilities in Arica.