Title: A resolution promoting stronger economic relations between the United States and countries in Latin America and the Caribbean.
Policy area: International Affairs

Summary:
This resolution recognizes that increased tensions between the United States and China and the COVID-19 pandemic have exposed severe vulnerabilities attributable to overreliance by the United States and other countries on supply chains based solely or mainly in China.
The resolution emphasizes that nearshoring in Latin America and the Caribbean, relative to relying on supply chains in other geographic regions, has the greatest potential to contribute to the economic prosperity and security of the United States while also advancing the post-pandemic economic recovery of countries in the Western Hemisphere. Nearshoring is the practice of transferring a business operation to a nearby country, especially in preference to a more distant one.
The resolution encourages the U.S. Agency for International Development and the U.S. International Development Finance Corporation to strengthen programmatic support for initiatives likely to facilitate the relocation of global supply chains to the Western Hemisphere.
The resolution also calls for governments in Latin America and the Caribbean to increase opportunities for nearshoring in the region.
Finally, the resolution urges the Department of State to take a leading role in advancing nearshoring in Latin America and the Caribbean.

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. Res. 661 Introduced in Senate (IS)]

<DOC>






117th CONGRESS
  2d Session
S. RES. 661

  Promoting stronger economic relations between the United States and 
             countries in Latin America and the Caribbean.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              June 7, 2022

 Mr. Menendez (for himself, Mr. Young, Mr. Kaine, Mr. Hagerty, and Mr. 
 Coons) submitted the following resolution; which was referred to the 
                     Committee on Foreign Relations

_______________________________________________________________________

                               RESOLUTION


 
  Promoting stronger economic relations between the United States and 
             countries in Latin America and the Caribbean.

Whereas, to maintain the role of the United States as a global economic leader 
        and protect the national security interests of the United States, the 
        United States must strengthen economic relations with countries in the 
        Western Hemisphere;
Whereas ongoing supply chain disruptions resulting from the COVID-19 pandemic 
        demonstrate the need for the United States to increase supply chain 
        resiliency through reshoring and nearshoring initiatives;
Whereas, in 2019, the People's Republic of China was the top supplier of goods 
        imported into the United States, providing significant quantities of 
        rare earth minerals, pharmaceutical ingredients, medical equipment, and 
        other goods vital to the economic prosperity and national security of 
        the United States;
Whereas the COVID-19 pandemic and production outages and shipping disruptions in 
        the People's Republic of China have jeopardized worldwide access to 
        critical goods, contributing to an unprecedented, ongoing supply chain 
        crisis that has exposed the severe risks of concentrating global supply 
        chains in the People's Republic of China;
Whereas Congress has raised concerns about the reliance of the United States on 
        global supply chains based in the People's Republic of China;
Whereas the People's Republic of China has shown its willingness to use critical 
        supplies as a political tool to advance the goals of the Chinese 
        Communist Party, including when the People's Republic of China--

    (1) threatened to withhold rare earth mineral shipments to Japan; and

    (2) utilized personal protective equipment and vaccines as a diplomatic 
tool;

Whereas findings made pursuant to a supply chain review required by President 
        Joseph R. Biden, Jr., under Executive Order 14017 (86 Fed. Reg. 11849) 
        and released on June 8, 2021, recommended that, in addition to expanding 
        domestic production capacity, the United States Government use 
        diplomatic and financial tools to cooperate with allies to create more 
        diverse, resilient, and secure supply chains;
Whereas 8 of the 13 countries in the world that recognize Taiwan are in Latin 
        America and the Caribbean, and nearshoring initiatives can help decrease 
        the susceptibility of such countries to coercive economic pressure from 
        the People's Republic of China;
Whereas the United States has free trade agreements in effect with 12 countries 
        in Latin America and the Caribbean, more than in any other geographic 
        region, providing significant incentives to relocate international 
        supply chains that cannot be relocated to the United States to Latin 
        America and the Caribbean;
Whereas, in addition to existing free trade agreements and the geographic 
        proximity of countries in Latin America and the Caribbean to the United 
        States, there are several significant advantages for the United States 
        Government and United States entities to relocate supply chains from the 
        People's Republic of China to the Western Hemisphere, including--

    (1) reduced distance to markets in the United States, which will lower 
freight costs, enable quicker adaptability to fluctuating consumer demand, 
and reduce the energy used to transport goods;

    (2) longstanding bilateral ties and shared democratic values, which 
lessen the risk of geopolitical disruptions to supply chains;

    (3) comparative advantages for sourcing and manufacturing key critical 
goods, including rare earth minerals, pharmaceuticals, medical goods, and 
semiconductors, when there is a historical inability for such goods to be 
entirely sourced or manufactured in the United States; and

    (4) access to a highly qualified and young working-age population;

Whereas the report entitled ``Widening the Aperture: Nearshoring in Our `Near 
        Abroad''' released by the Wilson Center in April 2021 provided evidence 
        that increasing and strengthening supply chains regionally, particularly 
        in Colombia, Mexico, and other countries in the Caribbean and Central 
        America, will, on average, create more jobs in the United States than 
        international supply chains located in other geographic regions;
Whereas switching as few as 15 percent of imports into the United States from 
        the top 10 source countries of such imports outside of the Western 
        Hemisphere to countries in Latin America and the Caribbean would 
        increase exports from Latin America and the Caribbean by $72,000,000,000 
        annually, helping the region recover from the effects of the COVID-19 
        pandemic and reducing pressures encouraging migration to the United 
        States;
Whereas, despite existing and growing opportunities for countries in Latin 
        America and the Caribbean to become crucial actors in global supply 
        chains, including technological advances that have diminished the need 
        to produce in countries with a low cost of labor, challenges to 
        nearshoring remain, including--

    (1) concerns about the rule of law, corruption, and criminal activities 
that discourage foreign direct investment or significantly raise the costs 
of shifting production to the region;

    (2) concerns about compliance with and enforcement of international 
labor and environmental standards;

    (3) underdeveloped physical and digital infrastructure; and

    (4) regional economic fragmentation;

Whereas the governments of several countries in Latin America and the Caribbean, 
        including Colombia, the Dominican Republic, and Mexico, have sought to 
        strengthen economic relations with the United States and launched 
        initiatives to incentivize nearshoring;
Whereas the Inter-American Development Bank (commonly known as ``IDB'') has 
        prioritized efforts to encourage nearshoring in Latin America and the 
        Caribbean, including by--

    (1) making economic integration and the strengthening of regional 
supply chains 1 of 5 core pillars in the agenda outlined in the document 
entitled ``Vision 2025, Reinvest in the Americas'';

    (2) including nearshoring as a business line of IDB Invest for the 
first time in the history of IDB;

    (3) hosting a high-level dialogue with more than 500 private sector 
leaders on December 2, 2020, to assess how to increase production capacity 
and supply chain resilience in the region; and

    (4) launching the largest private sector coalition in the history of 
the IDB to explore opportunities for reinvesting in countries in the 
Western Hemisphere, including through nearshoring initiatives and a toolkit 
to incentivize and finance nearshoring activities in the Western 
Hemisphere; and

Whereas the United States Government can leverage diplomatic, foreign 
        assistance, and financing tools to strengthen the participation of Latin 
        American and the Caribbean in global supply chains and address 
        challenges to nearshoring, including through the activities of the 
        United States Agency for International Development and the United States 
        International Development Finance Corporation: Now, therefore, be it
    Resolved, That the Senate--
            (1) recognizes that increased tensions between the United 
        States and the People's Republic of China and the COVID-19 
        pandemic have--
                    (A) exposed severe vulnerabilities attributable to 
                overreliance by the United States and other countries 
                on supply chains based solely or mainly in the People's 
                Republic of China; and
                    (B) heightened the importance of the United States 
                diversifying its supply chains through reshoring and 
                nearshoring initiatives to increase resiliency against 
                future disruptions;
            (2) emphasizes that reshoring efforts of sufficient scale 
        to increase domestic production capacity and relocate supply 
        chains to the United States remain critical and should be 
        encouraged and implemented;
            (3) emphasizes that--
                    (A) nearshoring efforts should be pursued in a 
                complementary fashion to better achieve more resilient, 
                diverse, and secure supply chains, particularly for 
                goods unlikely to be manufactured in the United States;
                    (B) nearshoring in Latin America and the Caribbean, 
                relative to relying on supply chains in other 
                geographic regions, has the greatest potential to 
                contribute to the economic prosperity and security of 
                the United States while also advancing the post-
                pandemic economic recovery of countries in the Western 
                Hemisphere;
                    (C) nearshoring in Latin America and the Caribbean 
                provides greater opportunities for expanding co-
                production operations and other cooperative business 
                ventures with United States entities; and
                    (D) nearshoring in Latin America and the Caribbean 
                can complement and enhance efforts by the United States 
                to support democratic consolidation across the region 
                by strengthening the rule of law, encouraging 
                competitiveness, and raising standards on corruption, 
                labor, and environmental issues;
            (4) supports initiatives by the Inter-American Development 
        Bank, governments in Latin America and the Caribbean, and the 
        private sector to finance, incentivize, or otherwise promote 
        nearshoring in Latin America and the Caribbean;
            (5) encourages the United States Agency for International 
        Development and the United States International Development 
        Finance Corporation to strengthen programmatic support for 
        initiatives likely to facilitate the relocation of global 
        supply chains to the Western Hemisphere, including through 
        increased collaboration with each other, the private sector, 
        the Inter-American Development Bank, and countries in Latin 
        America and the Caribbean;
            (6) calls for governments in Latin America and the 
        Caribbean to increase opportunities for nearshoring in the 
        region by--
                    (A) modernizing and consolidating physical and 
                digital infrastructure;
                    (B) combating corruption, strengthening the rule of 
                law, enhancing labor and environmental standards, and 
                improving democratic governance; and
                    (C) pursuing other efforts to facilitate the ease 
                of doing business in and attract foreign direct 
                investment to the region, including by leveraging 
                strong relationships with Taiwan; and
            (7) urges the Secretary of State, in coordination with the 
        United States Agency for International Development, the United 
        States International Development Finance Corporation, and the 
        heads of all other relevant Federal agencies and departments, 
        to take a leading role in advancing nearshoring in Latin 
        America and the Caribbean, including by--
                    (A) strengthening support for the activities 
                described in paragraph (6);
                    (B) engaging with governments in the Western 
                Hemisphere to explore opportunities to lower trade 
                barriers, streamline customs and other regulations, 
                support capacity building programs to strengthen 
                environmental and labor standards, establish incentives 
                for mutually beneficial co-production arrangements, and 
                facilitate economic integration of the region;
                    (C) strengthening legal regimes and monitoring and 
                enforcement measures relating to labor standards to 
                ensure that--
                            (i) any enhanced sourcing relationship with 
                        a country does not support or beget labor abuse 
                        or other human rights abuses, such as those 
                        found in the People's Republic of China; and
                            (ii) any new investment under a nearshoring 
                        program has sufficient labor standards and 
                        benefits the workers in such country;
                    (D) ensuring that nearshoring activities are 
                consistent with efforts to improve supply chain energy 
                efficiency, reduce the energy used to transport goods, 
                and advance environmental sustainability; and
                    (E) working in partnership with multilateral 
                development banks and private investors to create 
                incentives for entities to relocate supply chains from 
                the People's Republic of China to the Western 
                Hemisphere, including by financing the development of 
                regional technology hubs with strong labor and 
                environmental regulations.
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