Nicaragua

On August 5, 2004, the United States signed the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR or Agreement) with five Central American countries (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua) and the Dominican Republic (the Parties). Under the Agreement, the Parties are significantly liberalizing trade in goods and services.

The CAFTA-DR also includes important disciplines relating to: customs administration and trade facilitation, technical barriers to trade, government procurement, investment, telecommunications, electronic commerce, intellectual property rights, transparency, and labor and environmental protection.

The Agreement entered into force for the United States, El Salvador, Guatemala, Honduras, and Nicaragua in 2006. The CAFTA-DR entered into force for the Dominican Republic on March 1, 2007, and for Costa Rica on January 1, 2009.

In 2008, the Parties implemented amendments to several textile-related provisions of the CAFTA-DR, including, in particular, changing the rules of origin to require the use of U.S. or regional pocket bag fabric in originating apparel. The Parties also implemented a reciprocal textile inputs sourcing rule with Mexico.

Under this rule, Mexico provides duty-free treatment on certain apparel goods produced in a Central American country or the Dominican Republic with U.S. inputs, and the United States provides reciprocal duty-free treatment under the CAFTA-DR on certain apparel goods produced in a Central American country or the Dominican Republic with Mexican inputs.

These changes will further strengthen and integrate regional textile and apparel manufacturing and create new economic opportunities in the United States and the region.

U.S.-Nicaragua Trade Facts

Nicaragua is currently our 75th largest goods trading partner with $2.8 billion in total (two way) goods trade during 2008. Goods exports totaled $1.1 billion; Goods imports totaled $1.7 billion. The U.S. goods trade deficit with Nicaragua was $609 million in 2008.

Exports

Nicaragua was the United States' 73rd largest goods export market in 2008.

U.S. goods exports to Nicaragua in 2008 were $1.1 billion, up 22.9% ($204 million) from 2007, and up 489% from 1994 (the year prior to Uruguay Round). U.S. exports to Nicaragua are up 74.9% from 2005 (Pre-FTA).

The top export categories (2-digit HS) in 2008 were: Special Other (articles donated for relief) ($250 million), Machinery ($140 million), Cereals (rice, wheat, and corn) ($134 million), Electrical Machinery ($76 million), and Mineral Fuel (oil) ($75 million).

U.S. exports of agricultural products to Nicaragua totaled $233 million in 2008. Leading categories include: rice ($67 million), wheat ($35 million), coarse grains ($26 million) and soybean oil ($26 million).

Imports

Nicaragua was the United States= 71st largest supplier of goods imports in 2008.

U.S. goods imports from Nicaragua totaled $1.7 billion in 2008, a 6.2% increase ($100 million) from 2007, and up 921% over the last 14 years. U.S. imports from Nicaragua are up 44.3% from 2005 (Pre-FTA).

The five largest import categories in 2008 were: Knit Apparel ($598 million), Woven Apparel ($336 million), Electrical Machinery ($190 million), Spices, Coffee, and Tea (coffee) ($141 million), and Meat (beef) ($102 million)

U.S. imports of agricultural products from Nicaragua totaled $341 million in 2008. Leading categories include: coffee (unroasted) ($140 million), and red meats, fresh/chilled/frozen ($102 million).

Trade Balance

The U.S. goods trade deficit with Nicaragua was $609 million in 2008, a 14.6% increase ($104 million) over 2007.

Investment

U.S. foreign direct investment (FDI) in Nicaragua (stock) was $203 million in 2007 (latest data available), a 40 percent increase from 2006.