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