Sovereignty and regional integration in Latin America: a political conundrum?

Abstract

The two terms, sovereignty and regional integration, are indeed a quandary for decision-makers: ifthey intend to preserve national so- vereignty they should not engage in any process of economic inte- gration; conversely, if they are open to proceeding with the opening of economies and reciprocal trade liberalization with selected part ners, they have to renounce the most important levers of exclusive sovereignty over certain public policies. There is a contradiction between these two terms, either in general, or in some specific cases in particular. Western Europe, for instance, could only establish the bases of its regional integration process long ago in 1950, because its two most important countries, France and Germany, chose to relinquish their respective sovereignties over the twomost important factors ofwar: coal and iron. AndLatin America, or especially SouthAmerica, which constitutes the core subject mat- ter of this essay, has not advanced to any successful or significant scheme of economic integration precisely because two of its most important countries, Brazil and Argentina, have never relinquished an inch of sovereignty over their most basic economic policies, na- mely in themacroeconomic sector – that is, fiscal, exchange, andmo- netary policies – and in the sectorial realm, industrial and trade poli- cies in particular. Latin