Shannon K. O'Neil

Latin America's Moment

O'Neil analyzes developments in Latin America and U.S. relations in the region.

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Latin American Integration: Two Hundred Years of Efforts

by Shannon K. O'Neil
July 17, 2012

A man walks past a banner reading 'Capital of integration' in Caracas A man walks past a banner reading 'Capital of integration' in Caracas (Stringer/Courtesy Reuters).

Latin American integration efforts have been a continuous fixture throughout much of the last century, but in recent years there has been a flurry of new initiatives, with leaders re-emphasizing regional ties. The increasing number of high-profile presidential and ministerial summits have brought renewed promises and commitments to deepen regional political, economic, social, and developmental cooperation, and have spurred the creation of new political and economic bodies tasked with uniting the region.

Though in part due to a global shift toward regionalism, it also reflects the real potential benefits of an integrated Latin America. Economically, the combined markets would give the region substantially more heft on the global stage. Geopolitically, greater unity would enable these nations to garner the United States’ and other world powers’ attention, and better promote their interests in multilateral discussions and negotiations. In general, it could improve the opportunities and wellbeing of the some six hundred million Latin Americans.

Latin America’s integration is also bolstered by its widespread support from average citizens. Within the region, polls show that over half of each country’s population (and in some places up to three-quarters) support both economic and political integration. Democratic politicians have played up these visions for electoral gain—most notably, Venezuelan President Hugo Chavez has drummed up support by promoting his integration initiatives (often as the way to foil perceived U.S. regional designs).

But Chavez and his contemporaries are not the first leaders to make such promises. South America’s first grand integration efforts began in the early nineteenth century under the leadership of General Simón Bolivar during the wars of independence. He envisioned uniting northern South America into Gran Colombia, and creating a league of American republics with a common military, a mutual defense pact, and a supranational parliamentary assembly. This dream, and Bolivar’s presidency, ended in 1830.

After World War II, integrationist efforts reemerged. In 1947 nineteen nations (which later became twenty three) signed the Inter-American Treaty of Reciprocal Assistance (also known as the Rio Treaty), where they vowed to defend each other against outside aggression. The Organization of American States (OAS) followed in 1948 (building on a previous turn-of-the-century institution), promising to promote social and economic development through a four-pronged emphasis on democracy, human rights, security, and development. In the late 1950s the hemisphere came together to form the Inter-American Development Bank (IDB), designed not only to encourage economic development but also to advance regional integration through its internal Institute for the Integration of Latin America and the Caribbean (INTAL).

In 1960, Argentina, Brazil, and Mexico led their neighbors in the creation of the Latin American Free Trade Association (ALALC), the first attempt at a regional intergovernmental body. Its goal was to establish free trade throughout the whole region in twelve years (it failed). This effort was renewed in 1980 by the Latin American Integration Association (ALADI), which promoted a more gradual approach to creating a common market (it is still officially in the works).

Sub-regionally, Bolivia, Colombia, Ecuador, and Peru came together to create the Andean Community (CAN) to promote Andean integration in 1969. In the late 1980s onetime rivals Argentina and Brazil, began negotiating agreements that evolved into Mercosur (bringing in Uruguay and Paraguay along the way). Bilateral relations have advanced as well, with over fifty trade agreements signed with neighbors in as many years.

Yet despite the lofty rhetoric and the proliferation of dozens of agreements, a real question remains—whether there is anything to show for all these integration efforts. Many dismiss the weight of these bodies. Even Secretary of State Hillary Clinton warned that without changes the OAS, one of the longest-standing regional organizations, could soon become irrelevant. The numbers too question the importance of the neighborhood. For instance, the region’s economies still depend more on the United States, the EU, and increasingly Asia than on their neighbors.

The next series of blog posts will look at the current state of affairs in different areas of integration: economic (including trade and regulation), political, and social (students, tourists, and migrants). Overall while the dream of regional integration still inspires, it largely remains just that. Nevertheless, there have been significant changes on the ground in the last decade. The development of new political and social organizations, and, as importantly, informal integration through investment, studies, and the workplace has and will continue to have a significant effect on how Latin American countries cultivate closer ties, and, more broadly, the paths future integration efforts may take.

Post a Comment 4 Comments

  • Posted by Mel

    One would hope that after years of economic hitmen being
    sent down to Central and South America – doing the bidding
    for large corporations – corrupting elections , killing heads of state
    that these countries will finally have a real chance at economic
    success

  • Posted by Jose Angel Flores

    From its inception, the region south of the Rio Grande and all the way south to Patagonia has always been shaped by greater forces than our own resources and in so many different ways that each nation in our region emerged in its own right and different than the rest. For generations the world thought we were homogeneous in identity, just because we spoke the same language and went to the same church. But Guatemala and Salvador are very different, Mexico and Colombia or Peru are also different culturally, ethnically, economically. Every country has a different ethnic composition that gave it a distinct identity from the rest. And the region is not without rivalries and conflicts, mostly of territorial claims, for example between Argentina and Chile, or between Colombia and Venezuela or Chile and Peru, or Paraguay and Argentina, and so on.

    Since 1994, Mexico has cast its future with North America, Canada and the United States, the country was seeking a way out of poverty, greater economic and technological growth. But in reality it was a final and terminal recognition for us Mexicans that our future, who we have been for the past couple of hundred years, who are today and who will be tomorrow, lies in North America, not in South America. Ever since, we have come to terms with the fact that our way of life is going be more and more like that of our northern neighbors. Similarly, the United States and Canada have grown to accept Mexico, its culture, its economy, as part of their natural economic and social geography.

    Mexico´s rapid industrialization, going from being a commodity exports country in 1980 to an industrialized society today served as an example for Central and South American countries that are trying to move in the same direction and compete in the same markets. In South America, Chile and Colombia seek greater trade integration with the North America, with the US, Mexico and Canada. Perhaps Peru might do the same. Central America is also seeking economic integration with North America, Costa Rica has a FTA with Mexico too.

    But Brazil, Argentina, Uruguay, Venezuela and Paraguay are strengthening their relations with China, and their economic dependence as well. China´s corporations are coming to invest in gigantic soybean farms, mining and manufacturing in Brazil, Argentina, Uruguay. China is also turning into the largest creditor in the region. Brazil and Argentina created the Mercosur and defend the bloc with protectionist measures. It is intended to create an economic zone under the influence and dominance of Brazil and Argentina. These countries are now antagonizing US economic and military presence in the region, perhaps part of their increasing relations with China.

    Chile, Colombia and Peru resent this strategy and are looking outside. Together with Mexico they have created the Pacific Alliance, a free trade agreement with free transit of citizens among the four countries. But Mexico and Chile are not dreaming about a Latin America integration, but rather looking to improve the reach of their economies. And then there is the Trans-Pacific Partnership, which will bring together the USA, Canada, Chile, Mexico, Peru, New Zealand, Vietnam, Brunei, Australia, Singapur and probably Japan and other nations in the great pacific neighborhood.

    So I don´t really see any Latin American integrated bloc, but instead I can see that whatever similarities we Latin Americans still share today are quickly fading away as our countries open wide to the rest of the world and our economics, our industries, our culture, arts, trends and traditions continue to be shaped by all kinds of greater forces in a changing world.

  • Posted by Bennett Reiss

    It’s always refreshing to read/ hear people analyzing the concept of Latin American integration. I think Jose’s response to this article is yet another perfect example of differences Latin Americans themselves have when they access the region as a whole.

    Jose’s overall synopsis helps to provides other readers less familiar with Latam’s economic blocs and enlightened me a bit as to how Mexico views itself in the picture. AS a Peruvian American who grew up in NYC and now lives in China, I pay a lot more attention to South America… often at the expense of Central America, Mexico and the Caribbean.

    That being said I do not agree with your interpretation of the situation down in South America, and feel a few major recent developments have been omitted.

    1/ considering the size of the MercoSur bloc, it would indeed have the capacity to exert economic and political influence over the region, but this doesn’t look like it will happen any time soon. MercoSur has shown in recent years it is very from being an economic bloc. The natural tendencies of Brazil and Argentina to favor protectionist economic policy has catalyzed the creation of 200+ new tariffs in the last 2 years alone for products flowing WITHIN THE BLOC. Brazil and Argentina also seem to agree upon very little. Last, actions speak louder than words. Brazil and Argentina might preach they want free trade agreements with China, or for MercoSur to have one but they havn’t acted on anything. Meanwhile, all the countries of the Andean Community are aggressively trying to forge better trade and political relations with China. Peru and Chile already have FTA’s with China.

    2/ I think it’s crucial to look at the countries along the Pacific coast. These are the countries which will grow to have the most direct contact with Asia (perhaps Brazil is a outlier here). Just recently Mexico, Peru, Chile and Colombia signed yet another new Latam agreement between their own countries – The Alliance of the Pacific.

    3/ In general I think the Latin American wide bodies such as ALADI, or the OAS will continue to be bogged down by drawn out debate and agreements. Brazil and Argentina have their hands tied because their MercoSur bloc prohibits them from individually seeking out FTA’s with countries, they must work as a bloc. A good policy to force the bloc to act together, but probably doing more harm than good because while they argue other countries in Latam are moving forward and signing FTA’s around the world.

    I think Latam Integration for the next decade will be increasingly defined by sub-regional blocs. Competition among different blocs or groups might breed the region as a whole to better work together… or might end up creating winners and losers. Time will tell.

  • Posted by Jose Angel Flores

    Bennet,

    Thank you for your kind observations. I was very glad to see that Chile, Colombia, Peru and Mexico signed a FTA. I definitely belive the pacif will drive the economies of our countries for the next one hundred years or more.

    I feel that somehow Argentina and Brazil are mixing ideological visions and a very deep anti-american/free-trade discourse to in their foreign policies in the region.

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