BRASILIA, NOV. 28 -- Brazil and Argentina today formally banned the production of nuclear weapons in the two countries.

The historic agreement between the two former rival nations was signed by Presidents Fernando Collor de Mello of Brazil and Carlos Menem of Argentina in the border city of Foz do Iguacu, almost 1,200 miles south of Brasilia.

"We have taken a decisive step to eliminate nuclear rivalry between the two countries," Collor said during the signing ceremony. Menem said Brazil and Argentina eliminated all possibility of an arms race in the region and banned the production of missiles capable of carrying nuclear warheads.

The countries also prohibited nuclear tests inside their territories, even for peaceful purposes. Brazil and Argentina are the only countries in Latin America that have perfected the nuclear fuel cycle.

The International Atomic Energy Agency will start supervising a mutual safeguard system within the next 45 days. The agency's executive secretary, Hans Blix, was present when the agreement was signed. The two countries will inspect each others' research centers, military installations and nuclear reactors.

Menem said he would ask Argentina's congress to ratify the Tlatelolco Treaty for nuclear nonproliferation in Latin America. Brazil signed and ratified this treaty in 1967. However, the two presidents reiterated their countries' decision to not sign the 1968 Nuclear Nonproliferation Treaty, saying it is "discriminatory."

Brazil and Argentina started a political and economic integration process in 1985.