Ortega regime agrees with China on zero tariffs on various products

Meeting between Laureano Ortega and Denis Moncada with Cai Wei, director for Latin America and the Caribbean of the Ministry of Foreign Affairs of the People’s Republic of China. Photo: Official media.

In recent days, the Chinese media, and especially the Nicaraguan government supporters, have echoed the meetings between Cai Weidirector for Latin America and the Caribbean of the Ministry of Foreign Affairs of the People’s Republic of China, and senior representatives of the Sandinista regime, led by the son of the presidential couple, Laureano Ortega Murillo, and Foreign Minister Denis Moncada Colindres.

This Monday both delegations held a meeting in Nicaragua as part of an “intense cooperation agenda” originated after the signing of the “Early Harvest Agreement” in July 2022, and which is considered a possible prelude to the establishment of a bilateral Treaty. of Free Trade (FTA).

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China interested in meat, seafood and textiles

“This morning I read on the news that the early harvest between the 2 countries has been officially announced and this early harvest is going to officially take effect on the first day of May. More than 60 types of products are included in the early harvest, I am convinced that my friends and family back in China will be able to try typical products such as Nicaraguan beef and perhaps they will be able to wear the t-shirts produced in Nicaragua ”, expressed Cai Wei to the official media.

With these new agreements, it is expected that Nicaragua will be able to export beef, seafood and textiles to China without tariff charges as of May 1, according to the EFE news agency, this Tuesday, April 25.

In exchange for this, China will be able to export insecticides, herbicides, plastics, and raw materials for the production of textiles and toys to Nicaragua, under the same conditions of zero tariffs.

China still does not mean much in the Nicaraguan economy

During these more than 16 years of government, the Ortega regime has tried at all costs to hide the extensive dependence that Nicaragua has on exports and imports to and from the United States, under an anti-imperialist discourse that the dictator himself brings out in every one of his public appearances, contrary to this, he has tried to formalize alliances with Iran, China and Russia, adversaries of “yankee imperialism”.

After the rupture of diplomatic relations with Taiwan in December 2021, the Ortega-Murillo regime established a new one with China and contrary to having expected a boost in economic issues, what has been seen, at least in the numbers of 2022, is a stagnation in exports and a very poor increase in imports if the data is compared with that of 2020 when there were still no diplomatic ties.

Las statistics from the Central Bank of Nicaragua (BCN) show that exports to China went from 11 million dollars in 2020 to $12 million in 2021, a number that remained unchanged in 2022. Until the end of February of this 2023, 2.6 million dollars accumulate.

The figure is 71.5% below what the Center for Export Procedures (CETREX) reported on the products that were shipped to Taiwan in the same period ($4.2 million)despite the fact that they no longer have diplomatic relations with the latter.

China is far from competing with the US.

If the number of exports to China are compared with those of the United States, Nicaragua’s largest trading partner, the difference is abysmal. Towards the “Yanque empire”, in 2020 $1,405.9 million were exported, the figure increased to $1,754.3 million in 2021, $1,804.4 million at the end of 2022 and so far in 2023 the sum amounts to $337.8 million, according to data from the same BCN.

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Where an increase is observed is in imports, China is filling Nicaragua with its products, but this trend is not due to the establishment of diplomatic relations, since the growth curve shows it since before 2020 and vice versa, between 2021 and 2022 the increase was not as significant as that of the previous period.

Imports from China:

• 2020: $634.5 million.
• 2021: $908.2 million.
• 2022: $1,073.5 million.
• 2023: $177.2 million until the end of February.

Unfortunately, we cannot compare these data with those of imports from Taiwan, since the Central Bank of Nicaragua no longer reflects it in its statistics as it did when there were diplomatic relations, with whom it can be compared is with the United States and, like exports, the differences are abysmal.

Agreements between Nicaragua and Iran are “hats to shield and show off”

Imports from the United States:

• 2020: 1,049.8 million.
• 2021: $1,763.3 million.
• 2022: $2,191.4 million.
• 2023: $298.5 million through February.

China could become an important trading partner for Nicaragua in the coming years, perhaps it could occupy the position that little by little Taiwan could leave; However, trying to catch up with and surpass the United States seems like an unattainable dream for the Ortega regime, which hides behind the Asian giant, Russia and Iran to “display and show off”.

By far the United States has a vast advantage over China in terms of trade relations with Nicaragua, although the Ortega regime does not want to admit it, the DR-CAFTA free trade agreement signed during the government of Enrique Bolaños, a distance less than 3 thousand kilometers and a connection of 180 monthly air flightswill set the standard against the Asian giant with which there are no direct air flights and an immense geographical distance of more than 14 thousand km.