Nicaragua Trade

Subchapters:

  • Business Relationships
  • Foreign direct investment
  • FTAs ​​and Treaties
  • Development Cooperation
  • Prospective fields of study (MOP)

Business relations

Trade relations with the EU

Nicaragua was the EU’s 128th trading partner in 2021. For 2021, goods worth 341 million euros were imported from Nicaragua to the EU, which is approximately the same as in previous years. Agricultural products (53.5%) and animals, respectively, are imported from Nicaragua to the EU. animal products (13.6%). Goods worth 214 million euros were exported from the EU to Nicaragua (142nd place in the ranking of exports from the EU), mainly machinery (23%) and chemicals (19%).

2017 2018 2019 2020 2021
Exports from the EU (million EUR) 236.4 184.4 186.4 168.8 214.5
Imports into the EU (million EUR) 309.8 334.6 344.8 312.8 341.4
Balance with the EU (million EUR) 73.4 150.2 158.4 144 126.9

Source: European Commission

Trade relations with the Czech Republic

Nicaragua is one of the countries that experienced a rapid decline in economic and trade relations with the Czech Republic after 1989. Their current level is negligible. The turnover of mutual trade since 2012 was the lowest of all Central American countries, in 2017 and 2018 it increased significantly compared to the previous years, but in 2019 there was a slight decrease in exports, apparently due to the reduced demand in the country (social protests). Exports are mainly focused on products with a higher added value, such as machinery for use in the construction industry, industrial consumer goods, electrical equipment, devices and appliances. After years of very low imports, the trend reversed in the period 2017-2019, it decreased in 2020 due to the Covid-19 pandemic, but in 2021 it almost returned to the original values. The import is mainly specialized in fruit (bananas, dried fruit, etc.),

2017 2018 2019 2020 2021
Exports from the Czech Republic (billion CZK) 0.1 0 0 0 ON
Imports to the Czech Republic (billion CZK) 0 0.1 0.2 0.1 ON
Balance with the Czech Republic (billion CZK) 0 0.1 0.1 0 ON

Source: businesscarriers.com

Trade relations with countries outside the EU

The trade balance is significantly in deficit, which is caused by the export of products with mainly low added value (especially clothes, coffee, etc.) and, conversely, by the import of consumer goods, technology and oil. However, EU countries do not export much to Nicaragua, probably for political reasons, which is why the balance with EU countries remains in positive numbers for a long time.

2017 2018 2019 2020 2021
Exports from countries outside the EU (million EUR) 1,938.8 1,955.1 2080.0 2,228.0 2,690.8
Imports to countries outside the EU (million EUR) 4,448.3 3,770.4 3,354.7 3,437.3 4,893.8
Balance with non-EU countries (million EUR) -2,509.5 -1,815.3 -1,274.8 -1,209.3 -2,203.0

Source: EIU, Eurostat

Foreign direct investment

The volume of foreign direct investment income in the first half of 2021 reached USD 63million, which is times the amount recorded in the same period of 2020. According to the published information, this increase was mainly due to new investments in the energy and mining sectors and higher reinvestment of profits to companies, among others, in the manufacturing industry, telecommunications and in the trade and services sector. Investments come mainly from the USA (37.1%), followed by Canada (17.5%), Mexico (13.2%) and Panama (13.9%). Among the other regions, Spain stood out (8.5%). Data for the second half of 2021 was not available at the time of processing.

There is no information about direct foreign investments of the Czech Republic in Nicaragua.

FTAs and treaties

Treaties with the EU

The most important FTA for Nicaragua is clearly with the USA (DR-CAFTA) and the EU (Association Agreement). The Association Agreement (AA – Association Agreement) with the EU creates a free trade zone in order to open up new and better export opportunities for Central American products and ensure more favorable trade and investment conditions for European companies. The trade dimension of the Association Agreement has been provisionally applied for Nicaragua since 1 August 2013. Since then, the agreement has been the legal reference framework for trade between Nicaragua and the European Union. With the entry into force of the agreement, the EU abolished 99% of tariffs on industrial products and fisheries. Conversely, Central America has pledged to provide duty-free access to all industrial products and fisheries by 2025.

Contracts with the Czech Republic

Two contractual documents can be cited as pivotal:

  • Agreement between the Czech Republic and the Republic of Nicaragua on the support and mutual protection of investments (Managua, 2 April 2002)
  • Agreement between the Czech Republic and the Republic of Nicaragua on the abolition of the visa requirement for holders of all types of passports (Managua, 6/5/2004)

Developmental cooperation

Nicaragua is a net recipient of development aid. One of the largest donors is the EU country, with programs in the amount of EUR 169 million implemented in Nicaragua for the period 2014-2020. Within the framework of the new integration instrument for development cooperation NDICI-GE (EU instrument for neighborhood and development and international cooperation), an additional EUR 82 million has been allocated for development programs in Nicaragua for the period 2021-2027. These programs are to be focused on two thematic areas: (1) Environment and climate change mitigation and adaptation and (2) Sustainable economic growth. A one-year action plan for the year 2021, “The Nicaraguan Cocoa Value Chain Recovery Program”, was also approved.
In past years, the Czech Republic also implemented several development projects in Nicaragua. Since 2006, there has been cooperation with the Moravian Church of Nicaragua, based in the Caribbean region of the country. Several grants and “Small Development Projects” were implemented: a monument to Master Jan Hus was built in the town of Puerto Cabezas, the roof of the Jan Amos Comenius Gymnasium was repaired, the computer classroom of the University of the Moravian Church was equipped, a social center was built and two wells in the Isnawas community were reconstructed.
The Czechia also tried to improve the situation in the field of respect for human rights in Nicaragua. From the funds of the Transformation Program of the Ministry of Foreign Affairs of the Czech Republic, in cooperation with the non-profit organization CPDH (Permanent Commission for Human Rights), a project was implemented in 2020 aimed at providing advisory services in the field of human rights with the help of a mobile human rights clinic for residents of municipalities where violent incidents occur ( assistance in the field of mental and physical health, documentation of human rights violations). In 2021, a project aimed at supporting the rights of young people in Nicaragua was carried out with the same organization.

Prospective fields of study (MOP)

Nicaragua is not included in the ILO.

Nicaragua Trade