Nicaragua and China began trading under a new free trade agreement Monday, which allowed the former to export around 71% of its products in the Asian market without paying any tariffs.
Nicaragua will export food items such as meat and seafood, such as fish, shrimp, lobsters, sea cucumber, sugar, peanuts and rum, Reuters reported. Aside from food items, the Central American country will also export leather, charcoal, wood and automobile parts.
President of Nicaragua, Daniel Ortega, called this agreement, which was signed in October, the best Christmas present during his speech last month.
"Our brothers are here to shake hands, not to attack us," he said on Dec. 22. "Let the imperialists of the land learn how to govern, how to work for peace."
Nicaragua had turned to China after ending its diplomatic relations with Taiwan in 2021. China and Nicaragua signed the agreement on Oct. 31 in a virtual meeting; however, only a few details were made public about the agreement.
When the agreement was signed, the president's son, Laureano Ortega, who also served as an adviser to Daniel over the country's relations with China and Russia, said this Free Trade Agreement (FTA) will "generate economic and social benefits for Nicaraguan families, new investments and jobs, and transfer technology from China to Nicaragua."
China, on the other hand, issued a statement Monday about foreign trade, but did not mention Nicaragua.
"China's state-level economic and technological development zones have played an important role in high-quality development and the stability of foreign trade and investment," as per the Ministry of Commerce.
Regarding Nicaragua's agreement, the Chinese ministry issued a separate statement on Dec. 30, and said the trade will start from Monday onward as both countries have completed their domestic procedures for the deal to take effect.
"About 60%of goods in the bilateral trade will be exempt from tariffs upon the FTA taking effect, and the tariffs on over 95% will gradually be reduced to zero," the Ministry of Commerce noted. "This FTA marks China's first instance of opening cross-border service trade and investment through a negative list."
As per the Chinese ministry, this agreement will act as a milestone in China-Nicaragua economic ties, which is expected to "unleash the potential in trade and investment cooperation and benefit businesses and people in the two countries."
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