Nearshoring in Latin America: An Opportunity for the Region
New Concept or Large-Scale Economic Model?
Nearshoring is not an entirely new concept, but it has gained greater relevance in recent years due to various factors, such as the reconfiguration of the geopolitical landscape, disruptions in global supply chains, and the search for greater efficiency and resilience by companies.
The World Becomes Regionalized and Latin America Becomes a Key Player
The expansion of the BRICS group (Brazil, Russia, India, China, and South Africa) and the recent incorporation of new members such as Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates, marks a new world order with greater weight on emerging economies.
This new scenario, together with the relocation of production chains closer to consumption centers, positions Latin America as an attractive region for nearshoring due to its geographical proximity to the United States and Europe, competitive costs, skilled labor, and relative political and economic stability.
Factors Driving Nearshoring in Latin America:
+ Geographical proximity: Reduces delivery times and facilitates communication.
+ Competitive costs: Maintains skilled labor at a lower price than in developed countries.
+ Talent and education: Young people with high academic and technical training.
+ Stability: Greater political and economic stability compared to other regions.
+ Government incentives: Attract foreign investment and promote nearshoring.
Global giants such as Microsoft, Tesla, Iberdrola, TC Energy, Valero, and Shell are already betting on the region.
How has nearshoring impacted Latin America?
+ Mexico surpasses China as the main trading partner of the United States.
+ Mexico, Brazil, and Colombia concentrate 60% of regional cargo traffic.
+ E-commerce in Latin America continues to boom, attracting investments from multinational giants.
What can Latin American countries do to take advantage of nearshoring?
+ Ease investment restrictions.
+ Prepare human capital for new job opportunities.
+ Improve access to water, infrastructure, and energy.
+ Facilitate access to credit.
+ Strengthen free trade agreements.
Challenges to maximize the benefits of nearshoring:
+ Ensure the social and productive integration of local SMEs into value chains.
+ Implement reforms that increase social benefits and reduce inequality.
+ Improve infrastructure throughout the region.
+ Facilitate trade and port efficiency.
+ Reduce import taxes and simplify trade rules.
+ Close the digital infrastructure gap.
Nearshoring represents a great opportunity for Latin America to boost its economic and social development. However, it is necessary to take measures to fully exploit this potential and ensure that its benefits are distributed fairly.
In this context, collaboration between governments, companies, academia, and civil society will be essential to build a prosperous and sustainable future for the region.
