In June 1826, Latin America’s great liberator, Simón Bolívar, called the region’s recently-formed republics to a meeting in Panama. His vision: to create a great Latin American confederation, a union that would eject colonial influence, leave behind the destructive struggle for independence, and harness the region’s vast population and natural wealth to become a great continental power.
Unfortunately for Bolívar, only Gran Colombia–a territory that includes modern-day Venezuela, Colombia, Panama, and Ecuador–backed his plan. In 1831, the Gran Colombia federation itself dissolved, mere months after the independence hero’s death.
Regional integration has proven elusive for countless Latin American leaders. Despite the abundance of organisations, treaties, and free trade agreements, rarely have they achieved lasting closer cooperation among Latin American nations. “It’s a big dream,” opined former Ecuadorian president Jamil Mahuad, “but a dream that has always fallen short."
A regionalist renaissance?
Despite these historic challenges, there is building momentum among South American leaders to put regionalism back on the agenda. A major reason for optimism is the current ideological alignment between South America’s four most powerful countries: Brazil, Argentina, Colombia and Chile. All currently have left-wing presidents with like-minded agendas that include building a strong state to tackle the region’s crises of economic growth and inequality.
Regionalism was given a major boost by the January election of Brazil’s President Luiz Inácio 'Lula' da Silva, a veteran politician and giant of the left. Soon after coming to power in January, Lula skipped the Davos World Economic Forum to attend the Summit for the Community of Latin American and Caribbean States, a decision rich in symbolism.
In May, Lula demonstrated his regional heft by summoning all eleven South American heads of state to Brasilia for the first meeting of the Union of South American Nations since 2014. In urging countries to overlook their ideological differences, Lula’s bold proposals included a regional energy market, coordinated action on climate change, and even a regional trade currency to challenge the dominance of the American dollar.
“We let ideology divide us and interrupt our efforts to integrate. We abandoned our channels of dialogue and our mechanisms of cooperation, and we all lost because of it,” appealed Lula to his South American counterparts.
However, it was Lula’s support for Venezuela’s authoritarian president Nicolas Maduro that dominated the headlines following the meeting. He called it “absurd” that anyone would question Maduro’s legitimacy and argued that “a narrative” of “anti-democracy and authoritarianism” had been built around Venezuela. The comments were sharply rebuked by leaders on the left and right.
Barriers to regional integration
The deeply opposing views toward the Maduro regime highlights the often overlooked fact that there are important ideological differences between Latin America’s traditional left, new left, and authoritarian regimes.
Mexican president López Obrador (also known as AMLO) and Nicaragua’s Daniel Ortega are socially conservative nationalists with populist tendencies. At the other end, Chile’s millennial President Gabriel Boric resembles a European-style social democrat. Colombia’s former-guerilla-turned-president Gustavo Petro projects himself as a progressive leftist with an environmentalist agenda, while Argentine President Alberto Fernandéz is attempting to replicate the US fracking boom.
Secondly, personalities matter a great deal in Latin American politics. Before his exit, Bolsonaro’s refusal to speak with his Argentine counterpart had prevented South America’s largest countries from working together. Presently, AMLO’s nationalist, isolationist rhetoric openly shuns regionalism, and it is unlikely either Colombia’s Petro or Argentina’s Fernandez will accept Lula playing the region’s leading role.
Thirdly, the region’s vast distances and mountainous terrain means that the infrastructure required to enable effective commercial integration (such as roads, railways and ports) are difficult to develop. Geography aside, Latin America’s economies are simply not compatible for deepening trade. They lack export diversification and largely trade the same commodities (livestock, crops, and mineral resources).
In fact, economic integration–already low by global standards–has seen recent backsliding. In 2020, China overtook Brazil as Argentina’s largest trading partner, a trend mirrored in many other South American countries as China’s demand for commodities boomed. Surging commodity exports has led to a decline in regional manufacturing, further reducing the relevance of intra-regional trade, which amounted to only 13 per cent of Latin American exports in 2021.
Fourth, political crises across the region will hinder renewed attempts at cooperation. Severe instability grips Peru and Ecuador, while Venezuela and Haiti can be considered failed states. Even once-tranquil states like Chile are battling surges in violent crime, and sluggish economic growth has public frustrations running high. Leaders facing such problems at home are unlikely to devote the time or political capital required for bold action on a regional scale.
Challenges and opportunities
While barriers to regional integration are formidable, the potential benefits are just as great. Latin America’s increasing centrality to the world’s most important issues–from climate change and energy to great power competition–give it new strategic weight. It is the only region that can offer an alternative to China in critical minerals, and its geographical proximity and many free trade agreements with the US make it the ideal candidate for friend-shoring. Meanwhile, its disinterest in international wars make it attractive to investors seeking to protect their portfolios from geopolitical shocks.
Seizing these opportunities will require coordinated action. Shifting global supply chains offers a historic opportunity for Latin America, as long as it can demonstrate to international investors it is a safe and stable place to do business. Great power competition can unify the region rather than divide it if countries can work together to take advantage of the opportunities offered by both the US and China.
Latin American countries must invest in regional commercial infrastructure, harmonise their business and trading rules, and allow labor and capital to flow more freely across borders. A larger local market for Latin American industry will be critical to revitalising local manufacturing, insulating the region from global shocks and the boom-and-bust cycles of commodity exportation.
Unfortunately, the current political climate in Latin America means that these opportunities will likely pass it by. Transnational challenges from organised crime to migration and deforestation will continue to destabilise, as will the political and humanitarian crises in countries like Nicaragua and Venezuela. Across the region, the trend towards polarised, unstable politics has seen the election of extreme outsider candidates. This increases the chances that political decisions, once made, won’t outlast the government that made them.
Low presidential approval ratings in Argentina, Chile and Colombia means that the current ideological alignment between leaders is unlikely to outlast the next election cycle. Nevertheless, Latin America often surprises, and the incentives for cooperation are high. Only time will tell if this recent momentum can translate into genuine and lasting steps forward in regional integration.
Cody Searl holds a Master of International Relations (Political Economy) from the University of Sydney and has a strong interest in Latin American affairs. He is currently based in Canberra where he works in international policy.