The Return of Regionalism in Geoeconomics: Contrasts Between the European Union and Latin America

Over the past few years, regionalism has gradually lost its appeal. Successive crises have fueled diagnoses of its stagnation and even its irrelevance. Unilateral approaches to foreign policy and international engagement appeared more attractive than regional ones. However, geoeconomic fragmentation is reshaping the international landscape and, with it, the place of regionalism in global governance.

Strategic competition between the United States and China, the pandemic, the war in Ukraine, disruptions to global supply chains, and the growing use of economic instruments to pursue geopolitical objectives have altered governments' priorities. Economic efficiency is no longer the sole criterion for organizing international economic relations, and risk has become an increasingly important consideration. In response, concepts such as resilience, strategic autonomy, reducing dependencies, and economic security have become increasingly prominent in both national and regional agendas.

In this context, regionalism is being repositioned with new roles and new purposes.

Throughout the 1990s and much of the 2000s, regional projects were conceived primarily as mechanisms to liberalize trade, attract investment, and deepen economic integration. The success of a regional initiative was measured by the growth of intra-regional trade, the reduction of trade barriers, or the advancement of common institutions. In an international order increasingly shaped by geoeconomics, these regional assets are gradually being redirected toward the collective mobilization of integrated markets in order to manage risks, reduce vulnerabilities, and build autonomy in an increasingly competitive international environment.

The European Union is probably the most advanced example of this transformation. Under the notion of strategic autonomy, Brussels has developed an explicit narrative linking economics, security, and power. Trade, investment, critical raw materials, industrial policy, and technological regulation are no longer regarded as separate from security policy and geopolitics.

The result has been the development of a broad range of geoeconomic instruments. The Carbon Border Adjustment Mechanism (CBAM), the Deforestation Regulation, the Critical Raw Materials Act, foreign investment screening mechanisms, and the Anti-Coercion Instrument have gradually formed a strategic toolbox aimed at reducing external vulnerabilities and strengthening Europe's ability to shape behavior beyond its borders. Under conditions of geoeconomic fragmentation, regional integration has been redefined—from an enlarged economic space into a platform for projecting economic, regulatory, and technological power, despite its tensions and limitations.

Latin America presents a very different picture. The region lacks many of the institutional, regulatory, and financial capacities available to the European Union. For years, Latin American regional projects have faced problems of political fragmentation, low institutional density, and limited strategic convergence. The geoeconomic turn has therefore coincided with a weakened regionalism that possesses far fewer capabilities than its European counterpart. The key question is whether this changing international context can generate sufficient incentives to once again imagine effective mechanisms for regional cooperation.

There are some signs that the region is beginning to incorporate geoeconomic concerns into its agendas, although their institutionalization remains weak. In general, individual initiatives continue to prevail over collective ones, and these tend to be reactive and defensive responses to the international environment.

For example, within Mercosur there have been discussions concerning European environmental regulations and the establishment of certain regional coordination mechanisms in response to the European Union Deforestation Regulation. The bloc has also adopted joint positions within the World Trade Organization. More recently, debates have emerged over the possibility of a Mercosur strategy for critical minerals. Nevertheless, little of this has yet translated into concrete outcomes.

The contrast with Europe is striking. Latin America does not use its regional power to shape international agendas but rather in a defensive manner. European green regulations, the rivalry between the United States and China, the growing competition for strategic minerals, and the reorganization of global supply chains are all processes that generate regional responses, but they are rarely defined by Latin American countries themselves. Instead, initiatives are generally channeled through flexible mechanisms, ad hoc working groups, diplomatic coordination, or political declarations. Unlike the European experience, regional cooperation rarely leads to the creation of new competences, agencies, or permanent institutions.

Latin America occupies an increasingly important position in sectors considered strategic for the energy and digital transitions. Lithium, copper, food, biodiversity, and renewable energy have significantly increased the region's geopolitical and geoeconomic value. This potential is key to the revitalization of regionalism.

The European experience demonstrates that regional integration can play a renewed role in building autonomy and projecting power. Latin America, by contrast, has developed only limited initiatives, using regionalism primarily to manage vulnerabilities and preserve room for maneuver. Can this transformed international context and the growing strategic value of Latin America's resources become a new driving force for regionalism? The answer remains open. The challenge for Latin America will be to transform this potential into a regional strategy capable of projecting influence in an increasingly competitive international order.

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Julieta Zelicovich is a researcher at the National Scientific and Technical Research Council (CONICET) and a professor in the School of Political Science and International Relations at the National University of Rosario (UNR), Argentina.

The opinions expressed in this blog are solely those of the author and do not reflect the views of the EULAS Network.

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