Are Trade Agreement Groups Working In South America?

Since 1950, with the creation of ECLAC, there has been an interest in regional cooperation in South America. During those years, known as the “Old Regionalism”, multilateral cooperation agreements were created among the countries of the region using an Import Substitution Model, but due to various circumstances, it did not succeed. In the wake of the 1990s and with the increase of the price of oil, which was the primary commodity of the region, countries began to receive significant incomes, which stimulated cooperation in the region, primarily to increase exports. With the arrival of the last millennium, a new political regime began that was headed by leftist movements in most countries of the region and established a new concept of regionalism known as the "New Integration"; this regime was later tainted by the corruption scandals of these governments. For 2010, a new stage called "Subaltern Integration" began, which includes the alliances of the “New Integration” and the philosophy of the “Open Regionalism” of the 1990s. This study established a clusters analysis (hierarchical and non-hierarchical) to determine if natural trade groups have been created in South America and to contrast it with the Customs Unions created since 1950. The results indicate that there is a relationship between the level of trade and the geographical location of the countries but not with the trade agreements created multilaterally.