Nicaragua and China will begin negotiations to create an FTA at the end of September

First modification:

The Minister of Development, Industry and Commerce (Mific) of Nicaragua, Jesús Bermúdez, announced that the Government of his country will begin talks to negotiate a Free Trade Agreement (FTA) with China at the end of September. In recent years, the Central American country has become an attraction for states such as Russia, Iran and, recently, China.

After 31 years of estrangement, on December 10, 2021, China and Nicaragua reestablished their diplomatic and commercial relations. Seeking to strengthen bilateral ties, the Mific announced the development of a possible FTA between the two nations.

“At the end of this month we are going to have the first negotiation between heads and coordinators of the negotiation,” said Bermúdez. The meeting “will be to determine the guidelines, scope, working groups and the date of the meetings to move forward in this process,” he added.

Previously in July, the two countries signed an “Early Harvest Agreement”, which was explained by the Nicaraguan government as the preliminary step for an eventual FTA. According to Mific, the trade agreement with the Asian giant seeks to eliminate “90% of the entire tariff universe.”

The agreement that has already been agreed since July between the two nations allows Nicaragua to export products such as meat, bovine offal, some foods and liquors, textiles and automotive products to China without tariffs.

The trade agreement was finalized to be implemented in two phases. In the first, China promised to buy products from Nicaragua that cover most of the exports that were previously sent to Taiwan.

According to the commitment of the two countries, the second phase seeks that Chinese companies can invest in Nicaragua in infrastructure and development projects.

Nicaragua currently has trade agreements with Chile, the United States, Mexico, Panama, the Dominican Republic and an association agreement with the European Union, according to Mific.

China’s strategic rapprochement

Nicaragua recognized Taiwan as an independent state in 1990 and since then, its relationship with China deteriorated almost completely, until the end of 2021. Meanwhile, the Asian giant has shown its intentions to expand its presence in the region in the Central American country. .

Just a few days after announcing the reopening of the embassies, China donated more than a million doses of vaccines against Covid-19 to Nicaragua and a large number of syringes, according to the Ortega government.

Similarly, Beijing announced the financing of more than 60 million dollars to build public housing in Managua, under the China International Development Cooperation Agency.

Recently, the Xi Jinping government has also reestablished its diplomatic and commercial relations with other countries in the region such as Panama, El Salvador, the Dominican Republic and Costa Rica.

Nicaragua, an attraction also for Russia and Iran

In June of this year, the Nicaraguan Congress gave the green light to a project that allows the presence of Russian warships, troops and military vehicles in the country, in order to support training in the fight against drugs and other illicit activities, according to lawmakers.

Similarly, by March of this year Managua agreed to cooperate with Moscow on energy, medical and nuclear issues, without giving further details.

File, Archive.  Nicaraguan President Daniel Ortega (top left) greets the honor guard marching in front of the Tomb of the Unknown Soldier in Moscow.
File, Archive. Nicaraguan President Daniel Ortega (top left) greets the honor guard marching in front of the Tomb of the Unknown Soldier in Moscow. © AFP – Dmitry Kostyukov

For its part, the Iranian government strengthened relations with the Nicaraguan since 2012. Ten years later, the Iranian Oil Minister, Javad Owji, visited Managua, from where he announced new agreements on agriculture and crude oil.

Likewise, Tehran promised to supply fuel to the Central American country and the possibility of building a new oil refinery in the country was discussed.

With EFE and local media

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Written by Editor TLN

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