Is a strengthening south-south regional integration possible? The case of Mercosur and Latin America

Defraigne, Jean-Christophe [USL-B]

This article will look at the structural difficulties that regional integration faces in Latin America and in particular will analyze the evolution and prospects of Mercosur. It will show that regional integration could only fully develop at the end of the Cold War but this period coincided with the adoption of the Washington Consensus and that meant that the largest Latin American economies renounced to a substantial part of their import substitution industrialization policies. The global economic context reinforced the specialization of Mercosur and the rest of South American economies on commodities and energy sectors. This has generated a higher macroeconomic instability and more tensions between the member States of the Mercosur. It has also weakened the lobby of industrialists in shaping economic policies. The relative weakness of the industry in this region explains why the enterprise-driven regionalization will be weaker than in other regional integration processes such as the EU, NAFTA or ASEAN where it played a decisive role in the deepening of the economic integration. Introduction