In Brief: Nearshoring from China could net Latin America $70B

Latin America could stand to benefit $70 billion if just 10% of goods currently exported from China to the U.S. were instead exported to the U.S. directly from the region, Inter-American Development Bank President Mauricio Claver-Carone said. That figure includes types of goods that are already exported from Latin America and the Caribbean, so reaching it would require a ramping up of production and companies deciding to relocate more of their supply chains — but not building new industries from scratch. An increase in textile exports alone would quadruple such shipments from the Northern Triangle countries of El Salvador, Guatemala, and Honduras, he said. Remember when the ship was stuck?: Nearshoring has become a landmark policy of Claver-Carone’s and is one of five pillars of the IDB’s new “Vision 2025” plan approved at the bank’s annual meeting held last month. Claver-Carone argues recent events have shown how much the U.S., in particular, would gain from having key goods produced a short boat ride away instead of on the other side of the world. “This is not me pushing nearshoring, the United States pushing nearshoring. This is happening. COVID was Exhibit A of nearshoring … Suez Canal, and the blockage was Exhibit B,” Claver-Carone said Wednesday at an online event hosted by Georgetown University. “The opportunity is knocking.” Getting from here to there: A major barrier to nearshoring remains chronic regional underinvestment in infrastructure: “Now we’re playing catch up from, frankly, irresponsible policies,” Claver-Carone said. But the private sector, which he said must drive economic recovery after the pandemic, seems to be on board: “All around the board, major companies are looking at nearshoring as a great opportunity.”