The paper is concerned with regionalism in Latin America. The first chapter reviews the literature on regionalism and relates it with the Latin American experience. The second chapter starts the analysis of the regional case. It concludes that the import substitution strategy underpinned the first wave of regional arrangements (1960 to 1990) and paved the way to the new and ongoing wave of trade agreements. These are explained as a defense move in response to the EU and NAFTA. The third chapter uses the gravity model to estimate the impact of the arrangements. Controlling for national policies the study concludes that while regional integration enhanced intra-regional trade the bulk of the change is to be attributed to unilateral liberalization. The concluding comments point out that Mercosur can be expected to stay and to expand, by signing trade arrangements either with other Latin American countries or with Europe and the USA