Sec. 204. Strategy for promoting and strengthening nearshoring
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Congress makes the following findings: 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. 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 and demonstrated the need for the United States to increase supply chain resiliency and diversity through reshoring and nearshoring initiatives.
Relocating supply chains from the People’s Republic of China to Latin America and the Caribbean is in the commercial and security interests of the United States and offers several significant advantages for the United States Government and United States entities, including— reduced transit times to markets in the United States, which will lower freight costs, enable quicker adaptability to fluctuating consumer demand, and lessen the large carbon footprint of current supply chains; having supply chains located in countries with which the United States has longstanding bilateral ties and shared democratic values, lessening the risk of geopolitical disruptions to supply chains; and having supply chains located in countries with existing comparative advantages for sourcing and manufacturing key critical goods that cannot be entirely sourced from or manufactured in the United States, including rare earth minerals, pharmaceuticals, medical goods, and semiconductors.
Switching 15 percent of United States imports from its top 10 source countries outside of the Western Hemisphere to countries in Latin America and the Caribbean would increase the exports of the region by approximately $72,000,000,000 annually, helping the region recover from the effects of the COVID–19 pandemic while also reducing pressures encouraging migration to the United States. It shall be the policy of the United States— to work with allies and partners of the United States in the Western Hemisphere to achieve more resilient, diverse, and secure supply chains; to pursue nearshoring initiatives to relocate supply chains to Latin America and the Caribbean, particularly for products unlikely to be sourced or manufactured in the United States, while simultaneously pursuing reshoring initiatives to increase domestic production in the United States; and to engage with regional governments, multilateral development banks, and the private sector to develop and advance joint efforts to incentivize entities to relocate supply chains to, and strengthen supply chains within, the Western Hemisphere.
The Secretary of State, in coordination with the heads of other relevant Federal agencies, as determined by the Secretary, shall develop and implement a strategy to increase supply chain resiliency and security by promoting and strengthening nearshoring efforts to relocate supply chains from the People’s Republic of China to the Western Hemisphere. The strategy required under subsection
(c)shall— be informed by consultations with the governments of allies and partners of the United States in the Western Hemisphere and labor organizations and trade unions in the United States; provide a description of how reshoring and nearshoring initiatives can be pursued in a complementary fashion to strengthen the national interests of the United States; include an assessment of— the status and effectiveness of current efforts by regional governments, multilateral development banks, and the private sector to promote nearshoring to the Western Hemisphere; major challenges hindering those efforts; and how the United States can strengthen the effectiveness of those efforts; identify countries in Latin America and the Caribbean with comparative advantages for sourcing and manufacturing critical goods and countries with the greatest nearshoring opportunities; identify how activities by the United States Agency for International Development and the United States International Development Finance Corporation can effectively be leveraged to strengthen and promote nearshoring to Latin America and the Caribbean; advance diplomatic initiatives to secure specific national commitments by governments in Latin America and the Caribbean to undertake efforts to create favorable conditions for nearshoring in the region, including commitments— to develop formalized national nearshoring strategies; to address corruption and rule of law concerns; to modernize digital and physical infrastructure; to lower trade barriers; to improve ease of doing business; and to finance and incentivize nearshoring initiatives; advance diplomatic initiatives to harmonize standards and regulations, expedite customs operations, and facilitate economic integration in Latin America and the Caribbean; and develop and implement programs to finance, incentivize, or otherwise promote nearshoring to the Western Hemisphere in accordance with the assessments and identifications made pursuant to paragraphs (3), (4), and (5), including, at minimum, programs— to develop physical and digital infrastructure; to promote transparency in procurement processes; to provide technical assistance in implementing national nearshoring strategies; to mobilize private investment; and to secure commitments by private sector entities to relocate supply chains from the People’s Republic of China to the Western Hemisphere. In implementing the strategy required under subsection (c), the Secretary of State and the heads of other relevant Federal agencies, as determined by the Secretary, shall coordinate with the United States Executive Director to the Inter-American Development Bank and the United States Executive Director to the World Bank. Not later than 180 days after the date of the enactment of this Act, and annually thereafter for 5 years, the Secretary of State shall submit to the Committee on Foreign Relations of the Senate and the Committee on Foreign Affairs of the House of Representatives the strategy required under subsection
(c)and a description of progress made in the implementation of that strategy.