The Boundary Treaty of 1866 between Chile and Bolivia, also called the Mutual Benefits Treaty, was signed in Santiago de Chile on August 10, 1866 by the Chilean Foreign Affairs Minister Alvaro Covarrubias and the Bolivian Plenipotentiary in Santiago Juan R. Muñoz Cabrera. It drew, for the first time, the border between both countries at the 24° South parallel from the Pacific Ocean to the eastern border of Chile and defined a zone of bipartite tax collection, the "Mutual Benefits zone", and tax preferences for articles from Bolivia and Chile.
Despite increasing border tensions since the 1840s, both countries fought together against Spain in the Chincha Islands War (1864–65) and resolved the question under the Governments of Mariano Melgarejo in Bolivia and José Joaquín Pérez in Chile. But before long, both countries were discontented with it, and Peru and Bolivia signed a secret treaty against Chile in 1873. The Lindsay-Corral protocol, thought to clarify the treaty, was approved by Chile but never by Bolivia.
In 1874, a new boundary treaty was signed, which was violated by Bolivia in 1878. In 1879 began the War of the Pacific.
After the independence wars, the new Latin American republics adopted as a common juridical principle of frontier demarcation the administrative limits existing at the moment of separation from Spain. This was termed inUti possidetis of 1810, a formula devised mainly to prevent European nations from setting foot in America, on the plea that between one heritage and another there were vacant regions susceptible of being title of res nullius.
In particular, remote regions, sparsely populated or uninhabited areas, inhospitable climate, and sparse local vegetation caused a lack of geographical knowledge and hence administrative determination of the borders. But political unrest also led to changes, like the province of Tarija in colonial Argentina, which after independence wanted to come under Bolivian administration. On the other hand, European powers and the USA never recognized the principle of Uti possidetis 1810, as for example in the Falkland Islands. Since uncertainty characterized the demarcation of frontiers according to the Uti possidetis 1810, several long-running border conflicts arose in America after independence throughout the 19th century.