Sept. 5, 2012
-- The Free Trade Agreement (FTA) between Nicaragua and Mexico entered into force this Saturday, September 1st, with the ratification of three of the six Central American countries, according to the Ministry of Development, Industry and Trade of Nicaragua (MIFIC, for its acronym in Spanish). The FTA will foster the growth of trade relations through clear regulations and mutual trade benefit, thus contributing to the development of the participating countries’ economies.
The treaty will simplify commercial operations in goods in services, as well as regulate investments between the Central American region and Mexico. Specifically, the FTA will facilitate the use of raw materials originated from member countries for the production of final export goods. Additionally, it will allow industries to obtain materials from foreign markets when regional shortages occur and still preserve the origin of their products at the time of export.
According to Dean García, Executive Director of the Nicaraguan Association of the Textiles and Apparel Industry (ANITEC, for its acronym in Spanish), commented that “this will allow us to purchase fabric in Honduras and thread in Costa Rica, and benefit from exemptions, something that could not be done in the past because the country had a bilateral trade agreement with the Mexican nation and not a unified regional FTA”, commented Mr. García.
He also commented that other benefits include an increase in investments, specifying that there is already a new Mexican free zone installed in Estelí, Nicaragua, which has invested approximately US$5 million.
In 2011, Mexican investments in Nicaragua reached US$115.1 million, a 30 percent increase compared to the US$88.7 million in 2010. This same year, exports to Mexico reached US$82.7 million, a 60 percent increase vs. 2010.
Nicaragua is also part of the Central American Common Market (MCCA, for its acronym in Spanish) and has established free trade agreements with Dominican Republic, the United States, Panama, Chile, the European Union and Taiwan. The country also benefits from the Generalized System of Preferences (GSP) with countries such as Canada, Norway, Korea, Russia, Switzerland and Japan and has signed bilateral investment treaties with a series of countries to promote and protect invest investments. In total, Nicaragua has access to an estimated 1.5 billion people in countries across the globe.