By Andrea Shalal and Rodrigo Campos
WASHINGTON/NEW YORK (Reuters) - Colombia and other Latin American countries have a huge opportunity as U.S. companies look to reduce vulnerabilities in their supply chains laid bare by the U.S.-China trade war and the coronavirus pandemic, a senior Colombian official said on Wednesday.
Colombia's ambassador to the United States, Francisco Santos, told Reuters he was confident his country could benefit from accelerated moves by big U.S. companies to move some supply chains out of China and bring them closer to home.
"It's going to be a fight between China and the U.S. for economic supremacy, and in that new world, you're going to see a big amount of near-shoring, and I think Latin America can be the big winner, and Colombia can play a huge role," Santos said in an interview. "In five years, the economy is going to look radically different than the one we have now."
In 2019, Colombia was the fastest-growing among the biggest economies in Latin America with a 3.3% rate and is forecast to suffer the least in 2020 with a 2.4% contraction rate, according to forecasts by the International Monetary Fund. But exports were stagnant even before the COVID-19 pandemic and the crash in the price of crude, by far the country’s largest export.
Santos said he expected many areas of Latin America and the United States to re-industrialize, including in the pharmaceutical sector.
He said Colombia, located about four days' ship travel to Miami and seven days from Long Beach, California, was an ideal site for U.S. companies seeking to reduce their reliance on supplies from China.
The Trump administration, keen to reduce China's influence in Latin America, is supportive of the fledgling drive by Santos and others to drum up new contracts for Colombian firms, according to one former senior U.S. official.
Santos said he was in discussions with the White House National Security Council, the U.S. Treasury Department and the U.S. Chamber of Commerce about the initiative.
The U.S. International Development Finance Corp (DFC), an independent agency that provides funding for private developments, could provide capital to fund expansion of industrial facilities in the region, Santos said.
China is currently the top trading partner of Brazil, Chile, Argentina, Peru and Uruguay, Santos said, but there were many factors that underpinned closer trading ties with the United States, including shared values and the rule of law.
The United States is Colombia's biggest trading partner. The two countries have a trade agreement that went into effect in 2012 and will be fully implemented by 2028. Trade in goods and services between the two countries totaled $36.4 billion in 2017, the latest data available, with the U.S. having a small surplus of $2.8 billion, according to U.S. government data.
Santos said he had already spoken with Home Depot and other U.S. companies that were interested in increasing or starting to buy products made in Colombia.
He was working on a strategic plan to present to his government that would examine the potential need for tax breaks and other incentives to attract U.S. investment.
(Reporting by Andrea Shalal and Rodrigo Campos; editing by Richard Pullin)