Nicaragua will be able to export some products duty-free to China from May 1 under the Early Harvest Arrangement for a bilateral free trade agreement (FTA), the Customs Tariff Commission of the State Council, China’s cabinet, announced on Monday.
According to the tariff rate document released by the commission, certain imports from Nicaragua, including beef, seafood, cable and clothing, will be granted zero-tariff status from May 1.
The effective implementation of the Early Harvest Arrangement will further leverage the economic complementarity between China and Nicaragua and push bilateral mutually beneficial economic and trade cooperation to a new level, said the commission.
China will be able to export to Nicaragua, tariffs-free, products such as insecticides, fungicides, herbicides, plastics and raw materials for textiles and toys, according to Nicaraguan media reports.
The bilateral Early Harvest Arrangement was signed in July 2022, when China and Nicaragua jointly announced the beginning of FTA negotiations. The two countries resumed diplomatic relations in December 2021, in a joint communiqué.
The early harvest arrangement is a positive sign for the two nations to sign an FTA. The economies of China and Nicaragua are highly complementary and there is much room for cooperation, Dong Jingsheng, deputy director of Peking University’s Latin America Research Center, told the Global Times on Monday.
“Nicaragua is rich in agricultural and aquatic resources and can export primary products, namely agricultural products, to China. And, China can supply Nicaragua with manufactured goods to meet the daily consumption needs of ordinary people,” said Dong.
Nicaragua’s industrial structure is still dominated by primary raw materials or simple processing. Its main industries are textiles and agriculture, which account for nearly 50 percent of Nicaragua’s exports, industry insiders said.
Exports of agricultural products represent 43.3 percent of its exports, according to the Ministry of Development, Industry and Commerce of Nicaragua (MIFIC).
Bilateral trade witnessed a boom after the two countries resumed diplomatic ties. In 2022, bilateral trade totaled $759 million, and China’s imports from Nicaragua grew by 43.7 percent year-on-year, statistics from Chinese customs showed.
Dong said there is huge room for cooperation in infrastructure construction in Nicaragua.
“Nicaragua’s roads, housing, bridges, airports and so on need to be upgraded, while China has an advantage in infrastructure construction and investment. Infrastructure will be a key area of future cooperation between the two countries,” said Dong.
Work on the first large bilateral infrastructure project – construction of more than 12,000 units of housing in Nicaragua – started on April 15.
But Dong said that although positive signs have emerged, the FTA negotiations between China and Nicaragua could last long time.
“The FTA is more complex and broader, and it is going to include about 90 percent of the products that we produce,” said the minister of MIFIC.
(Global Times)
