Cargo ship’s accident in the Suez Canal could be to Latin America’s benefit — and to Miami’s

The bizarre case of the cargo ship that got stuck in Egypt’s Suez Canal, paralyzing part of the world’s trade activity, has drawn new attention to the fragility of global supply chains. But it could end up driving many U.S. companies to move their factories closer to home, becoming a godsend to Latin America.

Many trade experts with whom I’ve talked in recent days say the mishap of the giant container ship Ever Given, freed by a flotilla of tugboats on March 29 after clogging the Suez Canal for almost a week, will drive many multinational companies to diversify their supply chains.

Instead of bringing virtually all of their components from China, many U.S. firms will look for alternative suppliers closer to their home market, they say.

This trend, which economists call “nearshoring,” could be the best chance in decades for Latin American countries to become much bigger exporters. Mexico, Brazil, Argentina and Colombia could be its biggest beneficiaries, provided they take advantage of this opportunity.

Latin America could make an extra $70 billion a year in exports if it just managed to replace 10 percent of China’s shipments to the United

States, according to the Washington-based InterAmerican Development Bank.

That’s a feasible goal, because many of China’s exports — including cars, TVs and textile goods — are products that Latin America has been producing and exporting for many years, the bank says.

“The Suez Canal bottleneck is ‘exhibit A’ of the opportunity that exists for nearshoring global value chains,” Mauricio ClaverCarone, president of the Inter-American Development Bank, told me in an interview.

He added, “We have a once-in-a-generation opportunity for the region to finally fulfill its potential with the integration of global value chains. This may never come again in our lifetime.”

Fears over disruptions of global supply chains have been rising in recent years.

A 2020 survey of 260 global firms by the Gartner consulting firm found that 33 percent of companies had already moved factories out of China or were planning to do so by 2023.

The alarms bells over America’s overdependence on Chinese exports started when the United States and China escalated mutual threats of a trade war early in the Trump administration. More recently, they reached new highs during the COVID-19 pandemic, when Americans found themselves without madein-China face masks and medical equipments in early 2020.

The Ever Given accident renewed concerns in the world-trade community, because more than 350 container ships could not cross the canal for several days. Between 12 percent and 15 percent of the world’s commerce, from cars to oil, passes through the Suez Canal.

International trade experts tell me that some Latin American countries, such as Colombia, Costa Rica, Uruguay, Panama and the Dominican Republic,

are actively trying to lure U.S. companies seeking nearshoring sites. And Miami would be a big winner if they succeed, because much of these countries’ exports go through PortMiami.

Unfortunately, Mexico — by far Latin America’s biggest exporter of manufactured and assembled goods to the U.S. market — is missing the boat altogether.

Mexico, by far, could be the biggest regional beneficiary of nearshoring. But populist President Andres Manuel Lopez Obrador often sounds as if he’s trying to scare away, rather than lure, foreign investors. Argentina’s President Alberto Fernandez is in the same league, clinging to outdated anti-capitalist ideas that even Communist China has long abandoned.

Granted, there are many things that Latin America must do to attract foreign companies and seek to replace China as a major manufacturing center, including cutting red tape, reducing corruption, strengthening the rule of law and improving its outdated ports, airports and internet connections.

Many multinational companies are reluctant to move their factories to the region because of its outrageous transportation costs.

Moving a soybean cargo from northern Argentina to the port of Rosario in central Argentina is often more expensive than shipping that same cargo across the globe from Argentina to China, according to a Rosario Stock Exchange report.

But Latin American nations have a huge opportunity to get out of their economic slump by attracting companies that are considering moving out of China.

If they miss it, they will only have themselves to blame.

Don’t miss the “Oppenheimer Presenta” TV show at 8 p.m. E.T. Sunday on CNN en Español. Twitter: @oppenheimera