Nicaragua and China signed in early July a document called “Early Harvest Agreement” which is considered as a preliminary step to establish a Free Trade Agreement (FTA) which they hope to sign no later than 2023. At the same time, they signed a memorandum of understanding on the establishment of a joint commission on economic, trade and investment cooperation.
According to the Nicaraguan Foreign Ministry, the “Early Harvest Agreement” consists of identifying Nicaraguan and Chinese export products to which preferential tariffs will be generated in an FTA.
In this regard, the Nicaraguan Minister of Development, Industry and Commerce (MIFIC, for its acronym in Spanish), Jesús Bermúdez, said that Nicaragua will export products such as meat, bovine offal, seafood, vegetables, red beans, raw peanuts, rum, textiles, clothing, and automotive harnesses to China without tariffs.
China will be able to export to Nicaragua, also with 0% tariffs, plants and flowers, garlic, sweet corn, sardines and tuna, confectionery products, plants, bakery products, fish food, insecticides, fungicides, and herbicides. In addition, plastic products, tires for buses and trucks, raw materials for textiles and toys.
Last January, both countries signed a memorandum of understanding to establish a “political consultation mechanism”, a “macro agreement” on mutual support, another on trade cooperation, and another to exempt holders of diplomatic passports of both countries from visas.
Efforts are focused on reaching agreements on various issues that would allow the signing of the Free Trade Agreement by 2023 at the latest.
dania.navarrete@garciabodan.com
Senior Associate
García & Bodán
Nicaragua