Before the nineteenth century, when South America was part of the Spanish and Portuguese empires, there were limited opportunities for either Britain or the US to develop extensive trade with the region. The contraband trade that did take place was generally exploited to a greater degree by Britain, but such trade was always restrained by the colonial authorities in Spain and Portugal. Indeed, it was, at least in part, the desire for greater trade with South America that led both the US and, albeit in a more limited fashion, Britain to support the various struggles for independence which took place throughout Latin America during the first quarter of the nineteenth century.

It was towards the end of these independence struggles, on 2 December 1823, that US President James Monroe announced his famous doctrine towards Latin America. This stated that there should be no future European colonisation in the western hemisphere; that the US was opposed to the more general extension of European influence in the continent; and that the US would itself remain free from European affairs, except where US interests were directly concerned. Notwithstanding the implicit assertion of US supremacy in Latin America contained in Monroe's speech, it was in fact Britain that went on to dominate the commerce of the region throughout the nineteenth century. Britain established important export markets in South America and became the principal customer for many of the region's primary raw materials. British interests also invested heavily in the region, particularly in public utilities such as the Argentine railways.