Breaking Down Borders for Sourcing

By Rafael De Los Santos

When one is in the U.S., Latin America is regarded as a separate region. However, when you are in Mexico, Nicaragua, Perú or Colombia we talk about our territory as America. This is a significant difference in perception between the millions who live in the Northern Hemisphere of the continent, and the ones who live to the south of the U.S.-Mexico border.

Despite the fact that Latin American nation states have common features including language, religion and a shared colonial past, the region is not homogenous. In fact, it is enriched by its vast diversity. And while the history of the U.S. is unique in its genesis and development, these differences do not constitute barriers to cooperation and the forging of new allegiances within the region. What is more, the diversity within the U.S. itself is a great source of its strength and wealth. By aligning commonalities and shared interests, the region can expect to benefit from the opportunities that are emerging as a result of the current changes within the global business landscape.

Today, the supply chain is changing quietly, but dramatically. By 2030 we will no longer recognize China as the manufacturer of the world. We will see a world where manufacturing is regionalized. The war on Ukraine has profoundly changed the dynamics of the energy markets, and the western world has not wasted time in bringing the production of gas closer to the Gulf Coast of the U.S. Billions and billions of dollars are already being committed to make the Gulf of Mexico the new liquefied natural gas center of the world.


China’s Limitless Ambitions

In addition, Covid-19 has shown that China is not invincible, but China continues to amaze us because it no longer sees itself limited by its borders. While the U.S. political system debated about a wall with Mexico only six years ago, the Chinese were buying up giant industrial parks in Monterrey, Mexico, to satisfy American customers’ demands closer to home. For sure, borders are not what they used to be.

These rapidly changing environments have brought about new buzzwords such as “nearshoring” and “reshoring.” Words that are intended to make us aware that production is shifting closer to the industrialized world, with the U.S. being the most industrialized, and powerful example.

So, if the U.S. is the land of opportunity, who are the visionary “Americans” that are already working to “expand” its borders to include the rest of what is commonly referred to as Latin America? These visionaries are already shifting existing paradigms by broadening their scope and embracing a more cohesive view of the Americas.

To the extent that America can be reimagined as covering the entire region, from Anchorage to Patagonia, the opportunities for our industry will be enormous. If I am right, the world will witness the power and prosperity nearshoring, and reshoring will bring to the region in the decades to come.

Rafael de los Santos is managing director of Tradelossa. He will be participating in a panel, Power Generation in Latin America: Regional Spotlight,” on Sept. 29 on the main stage at Breakbulk Americas, to be held Sept. 27-29 at the George R. Brown Convention Center, Houston.

Register for the event here, and see the rest of the event program here.