Constructing regionalism in South America : the cases of sectoral cooperation on transport infrastructure and energy

Abstract

This article contributes to the study of South American regionalism focusing on the emergence of sectoral cooperation starting in 2000. To do so, the article analyses two policy areas transport infrastructure and energy integration-addressing two questions: Why has regional cooperation emerged despite the absence of economic interdependence and market driven demand for economic integration? And why are policy outcomes evident in some areas (i.e. transport infrastructure) while limited in others (i.e. energy)? It is argued that the emergence of regional cooperation as well as the variation in policy outcomes between areas can be explained largely by the articulation of a regional leadership and its effect on the convergence of state preferences. The article shows how the Brazilian leadership, incentivised by the effects of the US-led Free Trade Area of the Americas negotiations and the financial crises that hit the region in the late 1990s, made state preferences converge towards a regionalist project encompassing all South American countries by making visible the mutual benefits of cooperation on transport infrastructure and energy. In the case of energy, however, the emergence of a second regional leadership project - pursued by Chavez's Venezuela- and deep preference divergence led sectoral cooperation into a gridlock.