Nearshoring Readiness Guide

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Phase 1

Phase 2

Phase 3

Phase 4

Overall

0%Phase 1Phase 2Phase 3100%

Check off items below as you complete them — progress tracks in real time

0 of 48 items completed across all four phases

Strategic Assessment — Pre-Decision

Complete before committing to any nearshoring market or vendor

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Business Case & Financial Modeling

Total landed cost model completed — all cost variables included

Current tariff exposure under existing sourcing structure quantified

CAFTA-DR / USMCA / FTA tariff savings modeled by target country

Quality ramp cost and rework rate during transition budgeted

Currency risk exposure identified and hedging strategy considered

Break-even timeline calculated under conservative assumptions

Country Selection

Minimum 2 target countries evaluated and compared

Political stability and policy risk assessed for each candidate

Trade agreement eligibility confirmed with legal counsel

In-market visit completed — no commitment before on-site visit

Secondary market option identified for concentration risk

Exit scenario modeled for primary market disruption

Country Readiness Reference Matrix — Latin America 2026

Country	Trade Framework	Labor Cost	Infrastructure	Political Stability	WRAP Base	Overall Readiness
Mexico	USMCA	Medium-High	Strong	Moderate	Strong	High
Honduras	CAFTA-DR	Low	Moderate	Moderate	Strong	High
Guatemala	CAFTA-DR	Low	Moderate	Stable	Growing	High
El Salvador	CAFTA-DR	Low	Good	Moderate	Strong	High
Colombia	US-Colombia FTA	Low-Medium	Moderate	Stable	Developing	Medium
Costa Rica	CAFTA-DR	Medium	Strong	Stable	Developing	Medium
Nicaragua	CAFTA-DR	Very Low	Limited	High Risk	Limited	High Risk

Sources: World Bank LPI 2024 · WRAP Registry 2024 · USTR 2025 · RC2 Analysis

Operational Foundation — Pre-Launch

Complete before first production run or shipment

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Vendor & Facility Qualification

Vendor qualification criteria defined and documented

Factory audit completed — physical and documentation review

Vendor social compliance status confirmed or assessed

Raw material and component sourcing strategy mapped

Backup vendor identified for production continuity

Production capacity confirmed against volume requirements

Logistics & Customs

Freight forwarder with Latin America experience contracted

Licensed customs broker for relevant trade corridors contracted

Country-of-origin documentation system established

Import entry process mapped and tested before first shipment

Lead time variability scenarios modeled (best/base/worst)

Inland transport to production zone assessed

Total Landed Cost Checklist — All Variables Must Be Included

Cost Category	Included?	Notes
Labor — direct wages
Labor — turnover and recruitment cost
Labor — quality ramp / training cost
Ocean / air freight + port fees
Customs duties and tariffs (post-FTA)
Compliance / certification costs
QC inspection + defect/rework cost
Management overhead + currency risk

Workforce & Quality Systems — Launch

First 6–18 months of production

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Workforce Readiness

Local operational leadership identified and onboarded

Workforce training program built on documented SOPs

Training records system established from day one

Turnover tracking and retention strategy in place

Worker communications established in local language

Grievance procedure posted and communicated to workers

Quality System Transfer

Quality standards documented in local language

Inspection protocols adapted to new production environment

Defect rate KPI tracked weekly during launch period

Third-party QC inspection contracted for initial production runs

Corrective action system built for quality findings

Buyer quality requirements confirmed with vendor in writing

Compliance Certification & Scale

18–36 months — building long-term supply chain value

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Social Compliance & Certification

WRAP or equivalent certification process initiated

PASA self-assessment completed — gaps in active CAP

Full policy library documented across all 12 WRAP principles

Internal audit history established — quarterly cadence

Registered WRAP monitor contracted for pre-audit review

Annual certification renewal calendar established

Supply Chain Optimization

Local supplier base expanded — Asia dependency reduced

Second-country option developed for concentration risk

Production capacity expanded on proven quality foundation

Buyer relationships expanded using certification as credential

KPI dashboard reporting stabilized — weekly operational review

Year 2 nearshoring strategy plan documented and approved

Sources & References

U.S. Trade Representative — CAFTA-DR & USMCA Trade Agreement Guides (2025) — ustr.gov
World Bank — Logistics Performance Index, Latin America (2024) — worldbank.org
WRAP — Certification Program Requirements (2024) — wrapcompliance.org
Kearney — Reshoring Index, Latin America Supply Chain Report (2025) — kearney.com

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