Reshoring and Onshoring vs. Nearshoring: Costa Rica’s Strategic Path Forward
Costa Rica faces new challenges and opportunities in international trade with the advent of onshoring and reshoring concepts. Experts emphasize the importance of strategic diplomatic engagement and the need for the nation to adapt to evolving investment landscapes. Key sectors like Life Sciences and emerging markets offer pathways for Costa Rica to remain competitive in attracting and retaining foreign investments.
With the arrival of a new administration in the United States, concepts such as onshoring and reshoring have emerged, each presenting unique challenges. Onshoring focuses on fostering investments domestically, while reshoring aims to repatriate companies established overseas. At the forum titled “Global Transformation of Foreign Direct Investment” convened by Cinde, experts discussed the implications and opportunities arising from this evolving trade landscape for Costa Rica.
Understanding the current investment climate requires a historical comparison to 2017, when President Donald Trump began his first term, which saw initial investment fluctuations that were further influenced by the pandemic. The United Nations Conference on Trade and Development noted that investment statistics have varied significantly based on the governing party in the United States. Rodrigo Cubero, former president of the Central Bank, highlights the dual public policy strategies in the U.S.: incentivizing investments through “carrots” such as subsidies and tax reductions, alongside more stringent measures or “sticks” like tariffs, all of which contribute to a cautious investment outlook amid geopolitical tensions.
Costa Rica must adapt to these global shifts while leveraging its unique position. Diplomatically, Cubero emphasizes the need for the nation to engage carefully with the transactional nature of the current U.S. administration to maintain its attractiveness for investment, especially in nearshoring initiatives. Vanessa Gibson, Director of Investment Climate at Cinde, reiterates that a multifaceted approach—one that incorporates both economic and diplomatic strategies—is vital to nurturing ongoing relationships with significant U.S. investors.
Additionally, logistical considerations, particularly regarding human resources, pose ongoing challenges. A potential surge of businesses returning to the U.S. does not guarantee a readily available workforce. Therefore, Costa Rica must prioritize not only the attraction of new investments but also the retention of existing ones by identifying emerging sectors. The medical device field remains established, but awareness of the semiconductor industry’s growth is necessary to align with potential shifts in U.S. strategy.
Amid uncertainties surrounding nearshoring, Costa Rica continues to present its value propositions, notably within the Life Sciences sector, an area characterized by countercyclical investments and resilience. Moreover, the trend of “servification,” or the increasing preference for service-based contributions, further enhances the country’s investment appeal. Cubero notes that services are less susceptible to tariffs, providing a robust flank against potential trade-related challenges, which enhances Costa Rica’s competitiveness in the global market.
Marianela Urgellés, General Director of Cinde, affirms that the success of attracting investments relies on the country’s ability to adapt to evolving demands and meet the requirements of prospective businesses, ensuring that Costa Rica continues to thrive within the shifting landscape of international trade.
In conclusion, Costa Rica stands at a crossroads, with onshoring and reshoring reshaping the international investment environment. To capitalize on these trends, the nation must implement sophisticated diplomatic and economic strategies while addressing workforce challenges and new investment opportunities. By building on established strengths in diverse sectors such as Life Sciences and services, Costa Rica can maintain its relevance and attractiveness in the global market amidst changing geopolitical conditions.
Original Source: menafn.com
Post Comment