By Sabrina Rodriguez
09/01/2020 03:30 PM EDT
Colombia’s ambassador to the United States has a message for U.S. companies weighing whether to move operations out of China and closer to the U.S.: Colombia is open for business.
“The dispute between two of the biggest alpha males is not going away no matter who wins the presidency in November,” Colombian Ambassador to the U.S. Francisco Santos said in an interview with POLITICO. “And that’s where Colombia comes in. Colombia is geographically perfect to become a big hub for investment for this nearshoring idea.”
Background: Santos’ pitch comes as the Trump administration is publicly urging U.S. companies to leave China and build plants in the United States, particularly given the fallout from the pandemic. On the campaign trail, President Donald Trump has threatened to use tariffs to force U.S. companies to move jobs back from overseas, and reshoring is expected to be a major focus in his second term if reelected.
U.S. industry groups and trade experts, however, have cautioned that it’s costly and complicated for manufacturers to pack up in China and build plants in the U.S. staffed with American workers. Given those high costs, countries in the Western Hemisphere, like Mexico, have begun to pitch themselves as close-by, reliable partners that U.S. investors should consider instead of Beijing.
"The supply chain crisis [during the pandemic] has shown that having China as your backbone for production is a mistake,” Santos said. “It’s really a great opportunity for Latin America and the U.S. This is a continent with almost 400 million people who could become consumers of U.S. products."
Making progress: Talks about increasing U.S.-Colombia investment and trade ties predated the pandemic, Santos said. Last month, U.S. National Security Adviser Robert O’Brien visited Colombia to announce plans for the South American country to be part of a pilot program to incentivize near-shoring of U.S. businesses. The U.S. strategy is to use funds from the U.S. International Development Finance Corporation and other agencies for infrastructure and other projects in Colombia.
What’s next: The Colombian government is aiming to formally announce three separate projects — infrastructure, energy and industrial — by the end of the year, Santos said.
The government is also trying to focus on setting up a whole “regional ecosystem” equipped for U.S.
companies in the areas surrounding the coastal cities of Cali, Cartagena and Barranquilla, particularly with a focus on agriculture, bioenergy and forestry industries, he said.