21st Century Regionalism: Where is Latin America Headed?By: Sophie M., Research Associate at the Council on Hemispheric Affairs
Since the turn of the century, a new model of regional integration has emerged in Latin America that excludes Western powers, allowing for genuine autonomy of the region. This new era of regionalism in Latin America sprung from a growing discontentment with the Pan-American model of integration, as well as general disillusionment with the neoliberal economic ideology championed by the United States. The creation of the Alianza Bolivariana para los Pueblos de Nuestra América (ALBA, 2004), Unión de Naciones Suramericanas (UNASUR, 2008) and Comunidad de Estados Latinoamericanos y Caribeños (CELAC, 2011) triggered a new thought movement over the last decade, arguing that Latin America is finally realizing the Bolivarian dream of unity and solidarity. While this new wave of regionalism does not necessarily portend a strict geo-political divorce from the United States, it does demonstrate a promising rebalancing of the relationship between Latin America and its neighbor to the north.
Leaving Behind the Pan-American Political Model
Regional integration in Latin America dates back to the post-independence vision of the famous South American liberator Simón Bolivar. The institutionalized form of regionalization, though, did not enter into force until the second half of thetwentieth century with the creation of the Organization of American States (OAS, founded in 1948).
The OAS stemmed from a series of Pan-American Union Conferences that began in 1889. The conferences were largely sponsored by the United States, and aimed to strengthen social, economic, and political ties between the independent nations of the Western Hemisphere. World War II saw the strengthening of inter-American relations, as Latin American nations generally supported the United States and other Allies.  Additionally, the war brought forth the question of common defense for the Western Hemisphere. In 1948, after several conferences focusing on hemispheric defense and reciprocal assistance, 20 nations, including the United States, signed the OAS Charter, giving birth to the Inter-American System. The current system seeks to foster collaboration and mutual defense amongst the members, as well as to assure peace and justice throughout the Americas. The OAS has expanded over time to include all of the nations in the Western Hemisphere, becoming the continental forum for political, social, economic, and legal hemispheric issues. 
At its founding in 1948, the OAS Charter preserved the full sovereignty of all nations, as member countries were all reticent to make any commitment that would potentially limit their autonomy. In the early years of the Cold War, regional organizations were mostly regarded by Latin American governments as a means to pursue their national interests.  At that time, Latin American nations hoped to use the OAS to gain economic support and hemispheric defense from the United States. Nevertheless, during the Cold War, the United States was more interested in using the organization to garner support for its anti-communist crusade rather than to promote hemispheric integration.  Cuba’s suspension from the OAS in 1962, based on the argument that communism is not compatible with the inter-American system, is a striking example of the prevailing U.S influence in the organization. Cuba was excluded and sanctioned by the OAS despite the abstention of six countries—Argentina, Bolivia, Brazil, Chile, Ecuador, and Mexico—who argued that Cuba’s exclusion violated the principle of non-intervention inscribed in the charter.  In addition, and despite this principle, the OAS did not prevent, nor publicly denounce, several major U.S. interventions during the period, from supporting a military coup in Chile in 1973 to sending troops to Panama in 1989. Thus, Washington, which has financed nearly half of the organization’s budget and is the physical base of the organization’s headquarters, has clearly used the OAS to prioritize its own self-interest in the region.  This close relationship between Washington and the OAS has made the hemispheric organization come to be regarded by some as the U.S. government’s “watchdog” over the Western Hemisphere.
Washington’s Influence on Economic Blocs
In terms of economics, the influence of the U.S.-propagated neoliberal ideology of free trade and economic openness was progressively accepted as the norm in Latin America since the late 1980s.
The first Latin American economic blocs—the Asociación Latinoamericana de Libre Comercio (ALAC) in 1960, Mercado Común Centro-Americano (MCCA) in 1960, and Pacto Andino (Andean Pact) in 1969—sought their own model of integration with an inward orientation. These first economic regional and sub-regional organizations emerged in a period dominated by the ideas of the Economic Commission for Latin America and the Caribbean (ECLAC), a United Nations committee created in 1948 that focused on Latin American economic development. Inspired by Argentine economist Raul Prebisch’s view on the long-term deterioration of terms of trade for primary product exporters, ECLAC promoted a model of regional economic integration to support its goal of import substitution industrialization (ISI). ECLAC hoped that this model would promote an adequate regional market and complementary plans for region-wide industrial development. 
Nevertheless, these organizations grew somewhat moribund by the 1970s, as a new worldwide economic paradigm began to emerge. Several political, economic, financial, and social factors—including the demise of the Bretton Woods system, the oil crises, and major shifts in American foreign policy—began to change the international order that dominated the post-WWII period.  In this context, “neo-regionalism” emerged, integrating neoliberal principles into the new regional organizations. The famed “Washington Consensus,” a set of neoliberal policy prescriptions promoted by Washington-based actors (the IMF, the World Bank, and the U.S. Treasury) became a strong presence, permeating most Latin American regional organizations.
In addition to the reorientation of pre-existing organizations (the Andean Pact, for example, became the Andean Community of Nations in 1995), new trade-related organizations rapidly emerged. In 1991, Brazil, Argentina, Uruguay and Paraguay created the Mercado Común del Sur (Mercosur), and in 1992, Mexico signed the North American Free Trade Agreement (NAFTA), along with the United States and Canada. At this time, both organizations favored the development of an international market economy in accordance with the ideology and goals of the Washington Consensus that dominated that period. Even ECLAC changed its paradigm, favoring a model more oriented toward economic liberalization.  While the old organizations advocated inward-looking development, these new organizations clearly sought international economic insertion.
Thus, in the late twentieth century, attempts at regional integration in Latin America were marked by the strong presence of the United States, both physically and ideologically, in the regional and sub-regional organizations created. However, growing dissatisfaction with neoliberal policies has resulted in a rapid change in strategy for regional organizations, which have begun to experiment with more Latin America-centric policies.
A Bolivarian Moment
As mentioned, three new regional organizations have sprung up over the last decade. ALBA (2004), UNASUR (2008), and CELAC (2011) all reject the U.S. model of integration in both political and economic affairs. These three organizations seem to embody the development, during the first decade of the 21th Century, of a new paradigm of regional integration for Latin America.
ALBA was created as an alternative to the Free Trade Area of the Americas, a project which, at the initiative of the United States, aimed to establish a free trade area throughout the Americas. However, several Latin American nations, including members of what would in the future become ALBA, but also Argentina, Chile, and Brazil, rejected the project, supporting the idea that Latin America needed an independent path to economic development. This rejection of a neoliberal project for all of the Americas demonstrates a decisive change in the economic model long espoused by the region, as well as a sign that U.S. influence in Latin America has decreased since the end of the Cold War. As an alternative, ALBA, which includes leftist South American nations as well as some Caribbean nations, proposed a new model of non-commercial regionalism. Pioneered by the late Venezuelan President Hugo Chávez, ALBA encourages a relationship between its members that it is not based on free trade, but on solidarity, cooperation, and the exchange of services among ideological and economic allies. 
UNASUR and CELAC illustrate the will for a more independent form of regional integration in Latin America. Both organizations constitute a new form of cooperation between Latin American nations, as they purposefully exclude the United States and Canada. They also offer a platform through which a new economic model of integration can be promoted, as the “Washington Consensus” clearly showed serious flaws during the previous decade. As the United States and Europe continue to try to address the challenges and problems created by the ongoing global financial crisis, Latin American nations saw their unity as a means to avert an economic slump. 
This evolution is mainly due to important changes in Latin America. The recent strides in economic development of some Latin American countries have allowed them to assert their independence from the United States and to implement more autonomous policies in the region.  Additionally, these new organizations were created due to the initiative of several Latin American leftist leaders that struggled for more independence.  Chávez’s anti-American ideology was certainly a motivating factor behind the creation of UNASUR and CELAC. Brazil’s former president Luiz Inácio Lula da Silva also championed the emergence of regional organizations independent of the United States during this period, as more Southern-focused regional organizations allowed for Brazil to establish its leadership of the region. Brazil has thus supported the regional integration of South America, especially advocating for the creation of UNASUR. This organization, joining all South American countries (including Guyana and Suriname, which historically focus their relations with the Caribbean region) offers a new forum for cooperation in which Latin American countries can deal with their own problems without the interference of the U.S. government. For example, UNASUR has addressed several South American crises without help from the OAS, such as the political crises in Bolivia in 2008, Ecuador in 2010, and Paraguay in 2012.
CELAC offers another forum that includes all American nations with the exception of the United States and Canada, with the goal of deepening the political, social, economic, and cultural development of the region. In light of the worldwide economic crisis, which was largely caused by developed countries, one economic priority of this forum is to create an independent “financial architecture” for the region.  During the CELAC Summit in 2013 in Santiago, Chile, the Latin American states affirmed that the organization aims to foster dialogue between Latin American countries without U.S. interference, and seeks to speak with one common Latin American voice on global issues, as demonstrated by Cuba, Chile, and Venezuela’s collaboration to organize CELAC’s first summit.
Dealing with the United States: Less Domination, More Cooperation
Despite the will of the most leftist Latin American leaders, these newer organizations do not represent nor necessarily foreshadow a true divorce from the Giant of the North. While it is clear that the last decade has offered hope for a new path forward for the region, some Latin American countries remain particularly interested in relations with the United States, as well as following their economic prescriptions. Besides, a healthy inter-American relationship remains crucial in dealing with certain hemispheric issues. Thus, these new organizations, by giving a stronger voice to Latin America, appear promising for a rebalancing of relations without cutting out the United States completely. Even in an environment in which relations with the United States remain important, some changes in Latin American countries’ behavior certainly suggests a new era of less domination and more cooperation with Washington.
The creation of the Pacific Alliance in 2011 by Chile, Peru, Mexico, and Colombia serves as an interesting example. At first glance, this organization seems to defy the paradigm of the previously mentioned organizations, as the economic bloc affirms a fondness for the neoliberal model, rejecting the notion of non-commercial regionalism espoused by the other new regional organizations. While several Latin American countries have hoped to stray away from the neoliberal strategy they were once locked into, these four countries, which will be joined by Costa Rica this year, affirm their beliefs in neoliberalism as an instrument to reduce poverty and inequality.  This new bloc, noteworthy for its very strong early performance, is likely to affect the balance of power between regional organizations, as several Latin American countries have voiced their interests in joining the bloc. In this sense, one could argue that the paradigm of the last decade and the hope it created seem to be refuted. However, while U.S influence in this bloc is evident, it should be noted that the neighbor to the North has not been invited to join the new partnership. Washington’s status as an observer allows it to offer its perspective at summits, but does not give the U.S. government power to influence any of the decisions of the Latin American members of the Alliance. Furthermore, these five countries have also joined UNASUR and CELAC, and demonstrate a strong interest in making these organizations more efficient as well as more permanent, despite the strong ideological differences present in the continent. Consequently, even though the Pacific Alliance could affect the realization of a common economic model for the region, it seems that all Latin American countries understand that, to deal with some issues particular to their region, they will have to unify their voices. This principle is fundamental to a rebalancing of the inter-American relationship.
The evolution of the OAS over the last several years serves as another example of this shifting paradigm. Despite the insistence of Chávez and Ecuador’s President Rafael Correa to have CELAC and UNASUR replace the OAS, the organization will not be substituted. Several countries, including Chile, Colombia, Brazil, Argentina, and Mexico, are against the dissolution of the OAS. Additionally, the OAS has been active for more than 60 years and has developed solid institutions, while CELAC and UNASUR have yet to develop strong infrastructures.  As these elements persist, the new paradigm of regionalism does not necessarily imply a complete exclusion of the United States, as Inter-American cooperation is often crucial.
Nevertheless, there is hope that the events of the last decade demonstrate a new and more positive rebalancing regarding the relations among Latin American countries and the United States. For example, over the last several years, OAS policies have become less aligned with U.S. interests, as a result of increased pressure from Latin American leaders, as the strengthening of the economies of some Latin American countries seems to be giving them more clout.  Even the current Secretary General of the OAS, José Miguel Insulza, recognizes that the fundamental problem of the OAS system is that the United States has not followed the regulations it created. In a visit to the headquarters of the Council on Hemispheric Affairs earlier this summer, Insulza clearly affirmed the fact that “the inter-American community continues to shape the OAS into an accountable organization that, when making decisions, considers the interests of the entire hemispheric community.”  On the other hand, U.S. President Barack Obama’s election has also led to political change, as he assures that he wants to work more closely with Latin American nations as allies.  The United States’s agreement to offer Cuba the possibility of returning to the organization demonstrates that it is now in a position in which it is forced to make some concessions.
For more than 200 years, Latin America has experimented with different ideas regarding regional integration. In the 20th Century, Pan-Americanism dominated the model of integration, while U.S. economic prescription progressively imposed itself on the region. Nevertheless, these models have largely led to great disappointment for Latin American countries. The arrivals of some strong leftist leaders, as well as an improved economic situation for Latin America, have led to the creation of new forums of cooperation that clearly seek to reaffirm the Bolivarian dream. These organizations, which must insert themselves into a landscape in which relations with the United States remain vital, are helping to rebalance inter-American relations, giving a strong voice to Latin America as a region showing its ability to work together for its own mutual interests.
Sophie Mouline, Research Associate at the Council on Hemispheric Affairs.
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