The Benefits of CAFTA for Nicaragua

Nicaragua now has a surplus of $1 billion and trade with the country has grown by 75% in six years, thanks to the DR-CAFTA, overtaking Guatemala and the rest of the region.

Friday, May 11, 2012

Six years after coming into force and following record levels of growth in trade and investment, Nicaragua has become the region’s unlikely poster child for DR-CAFTA.

Baltodano notes that Nicaragua’s exports to the United States have grown 75 percent in the past six years – more than twice the export growth rate of Guatemala, which is in second place in Central America with 32 percent, and more than four times the export growth of Costa Rica, which joined the party late. Nicaragua now boasts more than $1 billion in trade surplus with the U.S., thanks in large part to CAFTA.

Though Sandinista Front initially attempted to block the trade agreement, claiming it would be a “death certificate” for farmers and small producers, the ruling party has changed its tune once in office. The Sandinista government recognizes CAFTA’s role in attracting foreign investment, boosting exports and generating employment.

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A forum on the subject, hosted by FUSADES, produced interesting conclusions, which can be extrapolated to the rest of the Central American countries which signed the agreement.

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