Nicaragua is an original member of the World Trade Organization (WTO) and attaches considerable importance to its participation in the multilateral trading system. Since the beginning of 1990s, Nicaragua has engaged in multilateral negotiations, regional and bilateral negotiations (Free Trade Agreements). Preferential agreements have become an important component of trade liberalization in Nicaragua.
Through a broad array of commercial and free trade agreements Nicaragua has achieved access to the most important markets in the world, which allows companies that operate in Nicaragua to establish a cost-effective export platform for key markets in North, Central and South America, as well as Europe and Asia.
In the 2012 Latin American Globalization Index, published by the Latin Business Chronicle, Nicaragua was ranked as second most globalized country in Latin America. The index of 19 countries looks at six factors that measure a country’s links with the outside world, such as exports and imports of goods and services as a percent of GDP, foreign direct investment as a percent of GDP and tourism receipts as a percent of GDP.
2012 Globalization Index
Published December 2012
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DR-CAFTA: Free Trade Agreement between Central America, the Dominican Republic and the United States of America.
Mexico: Free Trade Agreement between the Government of the Republic of Nicaragua and the Government of the United Mexican States.
- Chile: Free Trade Agreement between Central America and Chile.
Taiwan: Free Trade Agreement between the Government of the Republic of Nicaragua and the Government of Taiwan.
General System of Preferences (GSP): allows preferential access to the European Union and Japan.
Central American Common Market
- Association Agreement with the European Union (will enter into force in mid 2013)
The Dominican Republic - Central American Free Trade Agreement (DR-CAFTA) with the United States of America
Nicaragua, along with the four other Central American nations and the Dominican Republic, signed a free trade agreement with the U.S. This agreement eliminates duties for most Central American exports to the U.S. and helps integrate the Central American economies into a single trading block.
Free Trade Agreement with Panama
On October 12, 2007 Free Trade Agreement negotiations with Panama concluded, with the signing of the Protocol Agreement on Bilateral Cooperation and Integration still pending. The objective of this treaty is to attract investment and open agribusiness markets.
Free Trade Agreement with Mexico and the Dominican Republic
Nicaragua has signed Free Trade Agreements with Mexico and the Dominican Republic that permit duty-free trade for certain key products.
Free Trade Agreement with Taiwan
The agreement came into effect on January 1st 2008, and is expected to further boost bilateral trade.
Free Trade Agreement between Central America and Chile
The bilateral protocol was recently ratified in August, 2011. It includes the reduction of duties, the specific rules of origin and reserves in the services chapter, as well as asymmetric treatment to Nicaragua, as reflected in the schedules for reduction of duties.
Generalized System of Preferences (GSP)
The Generalized System of Preferences, (GSP), originates with a global effort by industrialized countries to grant preferential market access to developing countries. The GSP is a unilateral benefitial tariff granted to imports from developing countries. Nicaragua benefits from the GSP with Japan, Colombia, the European Union and Canada.
Central American Common Market (CACM)
Nicaragua, Honduras, El Salvador, and Guatemala, have signed an agreement to integrate their economies in order to achieve greater competitiveness in the global marketplace. The union has created a common customs territory among the countries that will result in the free movement of all products, regardless of their origin, and the elimination of customs requirements between the countries.
In addition to the Agreements already in effect, Nicaragua is negotiating various agreements, in order to facilitate the development of more export-oriented goods.
Bolivarian Alternative for the Americas (ALBA):
The ALBA is a social and economic cooperation agreement between Venezuela, Ecuador, Bolivia, Cuba, Antigua & Barbuda, Dominica & St. Vincent and the Grenadines.
Free Trade Agreements (FTA) Under Negotiation
This agreement is based on the FTA already effective between Costa Rica and CARICOM. The official negotiations began on August 2007. Panama has also joined the negotiations.
Central America CA4 – Canada
This agreement is still under negotiation. The objective is to promote and develop investment, extend opportunities for local exports and to serve as a base for negotiations with the United States of America.
Interest in requesting access to the Southern Common Market (Spanish: Mercado Común del Sur or MERCOSUR), a Regional Trade Agreement among Brazil, Paraguay, Argentina and Uruguay.
The Latin American Integration Association includes Argentina, Bolivia, Brazil, Chile, Colombia, Cuba, Ecuador, Mexico, Paraguay, Peru, Uruguay and Venezuela.
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