This article examines the impact of interregionalism on deepening regional integration processes in non-European Union (EU) regions, specifically the Southern Common Market (Mercosur). It considers whether ‘capacity-building’ functions of interregionalism are present in EU–Mercosur relations. It argues that although negotiations for an association agreement might have helped Mercosur survive periods of severe crisis in the past, the terms of the agreement under negotiation were not sufficiently attractive to encourage deeper integration in Mercosur. Moreover, interregionalism cannot be expected to compensate for low institutionalization, nor substitute for weak political willingness to deepen integration. Ultimately, Mercosur alone can decide how far it wants to take its regional integration.