Under the new Free Trade Accord between Nicaragua and China which went into effect Jan. 1, Nicaragua will now be able to export some 71% of its products tariff-free into the giant Chinese market, meat and seafood, sugar, peanuts, rum, leather, charcoal, wood, and automobile parts leading the way. Tariffs remain on certain Chinese goods which could otherwise overwhelm key nascent Nicaraguan industries.
That is a big deal for Nicaragua’s economy today, badly affected by U.S. economic sanctions. But bigger projects which can secure Nicaragua’s development over the long-term are also getting underway.
The two nations signed a “strategic partnership” Dec. 22, after Presidents Xi Jinping and Daniel Ortega spoke by videoconference. The same day, a yuan-denominated loan worth some $430 million was disbursed for the financing of two infrastructure projects which China’s state-owned CAMC Engineering is to carry out: rebuilding and modernizing Nicaragua’s Punta Huete international airport, and building an LNG processing and storage terminal.
Having the financing for the projects done in yuan is “an important advantage for the country in the strategy of de-dollarization,” Nicaragua’s Minister of Finance and Public Credit Ivan Acosta noted, and the modernization of the Punta Huete airport will “allow greater connectivity with Asia, Europe and other regions.”
