Supply Chain Dive: Target, Columbia Sportswear and 45 Others Invest $950M in Central America Sourcing

(Image Source: Towfiqu barbhuiya/ Unsplash)

The White House announced a $950 million batch of private sector investments in businesses, infrastructure, and sourcing from Central America. Based on a White House fact sheet, the most recent investments have brought the total amount invested since Vice President Kamala Harris' "Call to Action for Northern Central America" was announced in May 2021 to $4.2 billion. Several corporations have publicly stated their intentions to increase regional sourcing, and these companies include:

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• Columbia Sportswear aims to purchase up to $200 million worth of goods from the region within the next five years, a step that will generate over 6,900 work opportunities.

• Target has promised to invest an additional $300 million in El Salvador, Guatemala, and Honduras by the year 2033 to deepen its partnerships with regional suppliers.

• Nextil, a manufacturer and distributor of clothing, has announced plans to spend $40 million on two new factories in Guatemala. These factories would produce elastic textiles for the shapewear and sportswear industries.

• The Nescafé brand, Nestle has promised to help more than 7,500 coffee farmers "adopt regenerative agriculture techniques."

As of today, Harris's Call to Action, a private-public collaboration that cooperates with the White House, has attracted the participation of 47 different firms and organizations. Harris has positioned the program as a way to deal with the underlying issues that have led to the recent uptick in migration from Central America. From October 2017 through September 2021, a congressional assessment estimates that an annual average of 407,000 individuals would flee Guatemala, Honduras, and El Salvador, many due to violence.

Increasing textile manufacturing in Central America might help reduce migration by creating more local job opportunities, according to research from Texas A&M University's Mosbacher Institute for Trade, Economics, and Public Policy. However, this would need revisions to existing trade policy, particularly concerning rules of origin.

Source: Retailers join $950M commitment to Central America sourcing

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