Narayan AmmachchiNot only Mexico but also Panama, the Dominican Republic, Colombia, and Peru are expected to gain significantly from the nearshoring trend, as U.S. manufacturing firms shift their assembly lines closer to home.
According to a study by real estate services firm JLL, these Latin American nations are positioned to benefit considerably, with Panama emerging as a key player.
While Argentina and Chile could also see gains, their potential is not as strong as that of Panama, noted JLL analyst Rodrigo Torres in an interview with Bloomberg.
He added that, although protectionist measures under Donald Trump administration could affect Mexico, other Latin American countries may be less impacted.
Panama, the Dominican Republic, Colombia, and Peru could see an increase of over 10% in exports to the U.S., while Chile, Brazil, and Argentina might see a more modest 4% rise.
Panama’s advantage lies in its strategic location and robust logistics infrastructure, while the Dominican Republic benefits from its proximity to the U.S. and a larger labor force.
Peru and Colombia also stand out due to their favorable combination of location, business environment, and human capital, according to the report.
JLL suggests that proactive government measures to reduce trade barriers could further enhance these countries’ appeal to U.S. firms seeking nearshore options.
In other words, political stability and a sound macroeconomic environment are likely to play crucial roles in attracting businesses to Latin America.
For commodity-dependent countries, the nearshoring boom presents an opportunity to diversify into industrial production, generating millions of jobs and billions in export revenues, the report concludes.
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