China-Nicaragua Free Trade Agreement Signed, More Than 95% Of Products Will Achieve Zero Tariff

In August this year, Wang Wentao, Chinese Minister of Commerce, and Laureano, adviser to the President of Nicaragua on Investment, Trade and International Cooperation, formally signed the Free Trade Agreement between the Government of the people's Republic of China and the Government of the Republic of Nicaragua on behalf of their respective governments.

According to the agreement, the two sides have reached mutually beneficial and win-win results on the basis of a high level in terms of tariff reduction in trade in goods.

The final tariff-free products of both China and Nicaragua accounted for more than 95% of the total tariff items, of which the immediate zero-tariff products of both sides accounted for about 60% of the total tariff items.

In terms of specific products, China's zero-tariff products will fully cover the main export products of Nicaragua. After the entry into force of the agreement, when Nicaraguan products such as beef, shrimp, coffee, cocoa, jam, peanuts, frozen Phoenix snails and ethanol enter the Chinese market, the tariff will be gradually reduced to zero. In addition, China will grant a tariff quota of 50,000 tons of Nicaraguan sugar every year.

At the same time, Nicaragua will also implement zero tariffs on China's main export products. After the entry into force of the agreement, tariffs on Chinese-made cars (including new energy vehicles), motorcycles, batteries, photovoltaic modules, clothing and textiles, shoes, aquatic products, vegetables and other products will be gradually reduced and cancelled.

With the entry into force and implementation of the agreement, the people and enterprises of both countries will benefit.

It is understood that the China-Nicaragua Free Trade Agreement is the 21st free trade agreement signed by China, and Nicaragua is China's 28th free trade partner. It is also China's fifth free trade partner in Latin America after Chile, Peru, Costa Rica and Ecuador.

The economies of China and Nicaragua are highly complementary and there is great potential for trade and investment cooperation. In 2022, the bilateral trade volume between China and Nicaragua will be 760 million US dollars.

China is Nicaragua's second largest trading partner and second largest source of imports. Nicaragua is an important economic and trade partner of China in Central America and an important cooperative partner for jointly building Belt and Road Initiative.

It is worth noting that the China-Nicaragua Free Trade Agreement is the first free trade agreement signed by China to open up cross-border trade in services (including financial services) and investment in the form of a negative list.

The two sides undertake to give each other market access conditions for trade in services and investment no lower than the highest level given to their free trade partners.

At the same time, Nicaragua has made a relatively high level of commitment to opening up in the areas that China focuses on, such as manufacturing, construction engineering, electric power transport, and marine transportation, which provides greater certainty and broader space for Chinese enterprises to better open up the Nicaraguan market.

On the basis of its WTO commitments, China has further opened up a wide range of areas to Nicaragua, such as commercial services, environmental protection, banking and insurance, wholesale and retail, and marine transport.