China-Nicaragua free trade agreement comes into effect
Tele Sur | 1 January 2024
China-Nicaragua free trade agreement comes into effect
On Monday, the Free Trade Agreement (FTA) between China and Nicaragua came into effect, two years after both countries reestablished diplomatic relations and two weeks after elevating them to a "strategic partnership" level.
Signed on August 31, 2023, the FTA begins to take effect today, providing immediate access to that market for 60 percent of the products currently exported by Nicaragua with a 0 percent tariff such as beef, sugar, seafood, honey, harnesses, and textiles.
In terms of goods trade, the two parties will eventually implement zero tariffs on 95 percent of products in their tariff lines, of which 60 percent will receive zero tariffs immediately. The remaining 35 percent will be gradually exempt from tariffs.
The parties will achieve a high-level mutual opening in the fields of goods trade, trade in services, and market access for investment.
Additionally, the agreement will foster economic and technical cooperation between the two parties in the areas of agriculture, textiles, logistics, tourism, and small and medium-sized enterprises, it underscored.
Nicaragua hopes that China will become one of the main suppliers of raw materials, inputs, capital goods, consumer goods, machinery, equipment, among others, and a buyer of Nicaraguan agricultural exports, investing in the establishment of free zone companies.
Nicaragua’s agricultural sector represents 16.5 percent of the country’s gross domestic product (GDP) and drives 35 percent of total exports.
On Dec. 20, Nicaraguan President Daniel Ortega hailed the entry into force of this FTA as the "best Christmas gift." Previously, China and Nicaragua elevated their diplomatic relations to the level of a "strategic partnership."
