Widening the Aperture: Nearshoring in Our ‘Near Abroad’ (an Executive Summary)

If the United States allows other Caribbean Basin countries to be eligible for components of its ambitious domestic agenda, it could simultaneously increase U.S. competitiveness and provide benefits to the region that far outweigh any traditional foreign assistance programs.

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Source: The Wilson Center, Latin American Program

Note: The full report, of which this is the Executive Summary, was originally published by the Latin American Program at the Wilson Center, a U.S.-based public policy institute.

To access the full report, click here.

The Biden administration’s domestic economic plans could end up harming or helping the Greater Caribbean Basin. If “Building Back Better – Buy American” becomes a call for U.S. firms to restrict overseas activities in favor of the United States, the rest of the region will be adversely affected since foreign investment and trade are key drivers of growth. Conversely, if the United States allows other Caribbean Basin countries to be eligible for components of its ambitious domestic agenda, it could simultaneously increase U.S. competitiveness and provide benefits to the region that far outweigh any traditional foreign assistance programs. Depending on their execution and scope, administration domestic plans could ameliorate or exacerbate migrant pressures on the U.S. southern border.

For compelling reasons of geopolitical interests, dense economic exchange, continuous waves of migration, proud diaspora communities, generous remittances, and cultural affinities, the destinies of the United States and the rest of the Greater Caribbean Basin are already inextricably intertwined. But conceiving of the nations of the Caribbean Basin–to include the Caribbean islands, Central America, as well as Mexico, Colombia, and, eventually, Venezuela—as a Greater Caribbean Community (GCC)—and as eligible for major national economic initiatives would require a leap in the national imagination and political ambition. Yet, the administration has already signaled its intention to include the region in its signature climate change and sustainable energy plans.

In this spirit of internationalizing the agenda for a more sustainable and productive U.S. economy, the Biden administration could include our “near abroad” in other proposed initiatives such as infrastructure development, deepening digitalization, education and workforce training, and constructing business parks feeding U.S.-led global supply chains.

Of special relevance to the GCC, the Biden plans call for investing in new technology hubs. If extended to include the GCC, these hubs could build upon existing free trade zones or erect profitable greenfield endeavors and be imbedded in existing free trade agreements. Host countries would commit, in formal bilateral accords or, even better, in a region-wide compact with the United States, to create comprehensive ecosystems for economically efficient and socially equitable production. High-quality labor and environmental regulations, and tight security measures, would also be guaranteed. Goals for such a regional network of technology hubs would include building resiliency, redundancy, and rapid supply responses into U.S.-centric supply chains.

This bulletin identifies how these hubs could be established, along with the benefits of doing so. As a first stage, about half a dozen technology hubs would be designated with start-up funds of USD $1 billion each seeded by U.S., multilateral, and private sources. One key goal would be to sop up underemployed local labor to reduce emigration pressures. Appropriate locations might include El Salvador and either Honduras or Guatemala; the border between Haiti and the Dominican Republic, a turbulent zone with high unemployment; a representative of the Anglo-Caribbean, such as Guyana or Jamaica, which specializes in call centers and information technology; and Barranquilla, a Colombian seaport. In keeping with Biden’s pledge to increase manufacturing “in all of America,” one hub could be added in a U.S. Gulf state suffering from high unemployment and poverty.

Biden could launch the technology hubs initiative at a regional summit of GCC leaders. The GCC initiative could then be a centerpiece of the Ninth Summit of the Americas, to be hosted by the United States in late 2021 or early 2022.

Richard E. Feinberg is a professor of international political economy at the School of Global Policy and Strategy, University of California, San Diego. He has over four decades of engagement with inter-American relations that spans government service, numerous Washington, D.C.-based public policy institutes, the Peace Corps (Chile), and now academia.

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