Welcome back to Foreign Policy’s Latin America Brief, and happy holidays.
This week, we’re looking back at some big stories from 2024: the European Union-Mercosur trade deal, Mexico’s landmark elections, and positive economic indicators in Argentina and Brazil.
Multilateralism Produces Results
One of the biggest geopolitical events in Latin America came late in the year: the announcement that Mercosur and the European Union had finalized a trade deal that was 25 years in the making. The agreement would create one of the world’s largest free trade zones.
European Commission President Ursula von der Leyen flew to Uruguay to seal the deal in early December, convinced that she could whip sufficient support to make a big announcement in the capital of Montevideo. France was long opposed to the deal but put up less resistance as its government collapsed in the first week of this month.
The South American side also overcame dissonance to reach the agreement. Argentine President Javier Milei, who took office last year, campaigned on pulling out of Mercosur but abandoned those threats.
Proponents of the deal argued that it would not only promote economic growth but also help countries navigate grand strategy in a world increasingly divided by great-power competition. By cooperating more closely, Europe and Latin America could defend shared values and maintain autonomy, an advisor to then-EU foreign-policy chief Josep Borrell told Foreign Policy last year.
The EU-Mercosur deal must be ratified in the national legislatures of Mercosur countries, the European Parliament, and the Council of the European Union before it is implemented. (France still aims to tank the agreement in the council, where it needs a larger majority to pass.) But by moving forward after years of stagnancy, South American countries managed to overcome ideological differences to think bigger geopolitically.
It wasn’t the only effective case of multilateralism in Latin America this year. In November, Brazil hosted the G-20 leaders’ summit. A year prior, speculation around the event focused on the question of whether Russian President Vladimir Putin would attend—and whether the Russia-Ukraine war would continue to stymie decision-making in multilateral forums.
(The International Criminal Court indicted Putin for war crimes and has a warrant out for his arrest; Brazil is a member of the court’s founding statute.)
By the time of the summit, divisions over Russia’s war conduct still loomed large. But Brazil also introduced topics that allowed for new consensuses. G-20 ministers devoted significant attention to discussing a potential global tax on the super-rich as well as the need to reform the United Nations Security Council and multilateral development banks.
Venezuela’s Opposition Organizes
In recent years, efforts to resist government repression in Venezuela were often complicated by divisions among the country’s multiple opposition parties. That changed in 2024, delivering a major blow to President Nicolás Maduro’s legitimacy in July elections.
Venezuela’s opposition unified this year in part thanks to coalition building. Talks between the Maduro administration and hemispheric neighbors—especially the United States—also helped encourage a relatively competitive vote. That gave the opposition an incentive to coalesce around one candidate, Edmundo González.
Venezuela’s July 28 vote was not free and fair, and authorities hastily declared Maduro the winner. Even so, by collecting receipts from voting machines across the country, the opposition produced disaggregated voting data that many experts say is proof that González won.
The effort diminished Maduro’s legitimacy domestically and internationally. It swayed some neighbors that were friendly with Maduro, including Brazil and Colombia, to distance themselves somewhat from his regime.
But it has not stopped Venezuelan authorities from arresting, harassing, and disappearing activists. Maduro is due to be inaugurated for another term in January; González has since fled to exile in Spain.
Morena Triumphs in Mexico
Mexican President Claudia Sheinbaum delivers a speech as part of her inauguration at Zócalo Square in Mexico City on Oct. 1.Cristopher Rogel Blanquet/Getty Images
Polls and analysts predicted that Mexico’s ruling Morena party would win the country’s June presidential election. The whopping scale of the party’s victory—33 percentage points—underscored its dominance of Mexican politics. Claudia Sheinbaum also became Mexico’s first female president.
Sheinbaum’s win had several international implications. First, it bucked a global pattern in 2024 of incumbent parties losing elections amid persistent global inflation. After Democrats’ losses in the United States, observers noted that one thing Morena did differently was repeatedly raising Mexico’s minimum wage.
In actions as well as messaging, Morena ran explicitly as a pro-poor party—and won.
Second, Sheinbaum’s rise is proof of the power of gender parity requirements, which are enshrined in the Mexican Constitution. Mexico’s top two presidential candidates were women, as are the country’s Supreme Court chief justice and central banker. Such quotas don’t guarantee feminist policies, but they do normalize women’s leadership.
Third, the scale of Morena’s victory may leave it less sensitive to criticism of controversial policies. Sheinbaum supported a sweeping overhaul to Mexico’s court system in September over objections from the U.S. government and international investors, who said the reform could politicize the justice system and worsen Mexico’s business environment.
But amid threat of trade wars from U.S. President-elect Donald Trump, domestic support can only get Mexico’s leaders so far. Trump’s threat of a blanket 25 percent tariff already appears to have prompted major action from Mexico City, including large-scale fentanyl busts. Morena’s popularity may protect its leaders from pushback if they take dramatic policy steps, such as stepping up sweeping detentions of northbound migrants.
Economic Surprises
One of the reasons that Latin America is not more influential on the world stage is that it has been mired in at least a decade of low economic growth. The U.N. Economic Commission for Latin America and the Caribbean dubbed 2015-2024 “the second lost decade,” a grim reference to the region’s debt crises during the 1980s.
Since 2015, Latin American economies grew by an average of just 0.9 percent per year, the commission estimated in August. So it’s notable that Brazil, the region’s largest economy, may end the year with more than 3 percent GDP growth. That outpaces most early-year forecasts from major banks.
One factor behind Brazil’s growth is new multibillion-dollar spending packages under President Luiz Inácio Lula da Silva’s administration. What remains unclear is whether his policies will make Brazilian industry more productive—or just flush with cash that may be quickly burned through. This month, Lula’s spending packages prompted investor concerns over Brazil’s deficit that caused currency devaluation.
Meanwhile, Argentina has exited the recession caused by Milei’s economic shock therapy. Monthly inflation has fallen from around 25 percent when he took office last December to 2.4 percent last month.
Poverty in Argentina has skyrocketed amid Milei’s policies, yet he has retained a surprisingly high approval rating of around 50 percent—a testament to how disillusioned Argentines were with previous center-left and center-right governments.
Public acceptance of Milei’s policies may not last. But Argentina, Latin America’s third-largest economy, looks closer than it did a year ago to warding off the kind of debt crisis that has so often destabilized the country in the past.
Balancing U.S. and Chinese Influence
Workers are seen at the megaport in Chancay, Peru, on Oct. 29.Cris Bouroncle/AFP via Getty Images
In 2024, the United States and China showed off what their diplomacy can offer Latin America.
The year began with the inauguration of Guatemalan President Bernardo Arévalo, an anti-corruption figure whom allies of outgoing President Alejandro Giammattei tried to block from taking office.
U.S. diplomats were part of the pressure campaign to get Arévalo’s opponents to back down. The episode echoed Brazil’s 2022 election, where U.S. officials waged an intense behind-the-scenes effort to encourage Brazilian military officers and politicians to respect the results of the vote that saw Lula elected.
Taken together, U.S. actions in the region during Joe Biden’s presidency proved to be some of his strongest deliveries on his pledges to shore up democracy abroad.
China, for its part, did not wade into electoral politics similarly. But its infrastructure-forward policy in the region took the spotlight in November, when Chinese President Xi Jinping visited Peru to inaugurate the first phase of a $3.5 billion port complex in the town of Chancay.
Peruvian officials had long sought funding for the port when Chinese state-backed shipping firm COSCO stepped in as a partner on the project in 2019. The site is expected to facilitate trade between South America and Asia.
It would be an oversimplification to classify U.S. policy toward the region as values-based and China’s as funding-based, not least because Washington remains its biggest foreign direct investor by far. But Biden’s attention to electoral democracy and Xi’s to strategic infrastructure created some of the region’s biggest headlines this year.
This may change dramatically under Trump. We’ll look at the regional implications of his looming presidency next week.