China and Nicaragua have successfully concluded their substantial negotiations on a free trade agreement (FTA), as revealed by China’s Ministry of Commerce (MOFCOM).
During an official video conference, China’s Commerce Minister Wang Wentao and Nicaragua’s Minister of Development, Industry, and Trade, Jesus Bermudez, made the key announcement.
This FTA is anticipated to be signed in August, with implementation planned for early next year.
Nicaragua reestablished diplomatic ties with China in 2021, followed by Memorandums of Understanding to foster Chinese investments.
As of last April, Nicaragua began building thousands of subsidized houses with Chinese support.
China’s diplomatic influence in Central America has been increasing, evidenced by Honduras shifting diplomatic recognition from Taipei to Beijing last March.
Only Guatemala and Belize in Central America recognize Taiwan as an independent state.
Nicaragua’s Minister of Finance and Public Credit, Ivan Acosta, estimates that the FTA could boost the country’s Gross Domestic Product growth by at least 2 points, expected to be between 3.4% and 3.5% from 2023 to 2026.
The agreement will facilitate access to China’s vast market for Nicaragua’s primary agricultural and industrial products, such as meats, dairy, coffee, seafood, and harnesses.
Last year, trade between China and Nicaragua reached US$760 million, with China majorly exporting textile products and information and communication equipment while importing agricultural products, sugar, leather, and wood from Nicaragua.