Free Trade Agreement between China and nicaragua
(goods and services)

Note on the Meeting of 18 March 2025

Chairperson: H.E. Mr. Salomon Eheth (Cameroon)

1.1.  The 112^th Session of the Committee on Regional Trade Agreements (hereinafter "CRTA" or the "Committee") was convened in Airgram _WTO/AIR/RTA/38/Rev.1 dated 7 March 2025.

1.2.  Under Agenda Item 8.2, the CRTA considered the Free Trade Agreement between China and Nicaragua, goods and services (hereinafter "the Agreement"). The Chair stated that the Factual Presentation had been prepared by the Secretariat on its own responsibility in full consultation with the Parties, in accordance with paragraph 7(b) of the Transparency Mechanism for Regional Trade Agreements (document _WT/L/671).

1.3.  The Agreement had entered into force on 1 January 2024 and had been notified by the Parties on 2 February 2024 under Article XXIV:7(a) of the GATT 1994 and Article V:7(a) of the GATS as an agreement establishing a free trade area for trade in goods and services consistent with Article XXIV of GATT 1994 and Article V of GATS (documents _WT/REG478/N/1 and _S/C/N/1155, respectively). The text of the Agreement, as well as of the annexes, were available on the Parties' official websites and in the WTO RTA database. The Factual Presentation (document _WT/REG478/1), and the questions and replies (document _WT/REG478/2) had been distributed.

1.4.  The representative of China thanked the colleagues of Nicaragua for their collaboration, the Secretariat for drafting the Factual Presentation and the colleagues from Thailand for their questions. The Agreement had been signed in August 2023 and had officially come into effect on 1 January 2024. Its content fully reflected high standards, modernity and inclusiveness.

1.5.  China and Nicaragua had achieved a high level of openness on trade in goods, with zero-tariff products accounting for more than 95% of the total tariff lines on both sides. In addition, the two sides had also made high-level opening-up commitments on cross-border trade in services and investment in the form of a negative list. That was the first time that China had made commitments in the form of a negative list in its agreements.

1.6.  The text of the Agreement included not only traditional chapters such as customs procedures and trade facilitation, rules of origin, and sanitary and phytosanitary measures, but also "behind the border" topics such as digital economy, trade and environment, and competition policy. That reflected the direction of the Agreement's text compatibility with high-standard international economic and trade rules.

1.7.  The Agreement also included chapters on cooperation and small and medium-sized enterprises (SMEs), encouraging the two sides to carry out economic and technological cooperation in agriculture, textiles, logistics, tourism and other fields, helping the two countries better complement each other's advantages through project cooperation, industrial alignment and policy exchanges, and making full use of the preferential policies of the Agreement. The economies of China and Nicaragua were highly complementary and there was potential for trade and investment cooperation. The Agreement created a better business environment for enterprises of the two countries, further stimulated the potential of bilateral trade and investment cooperation, further upgraded the quality of China and Nicaragua economic and trade cooperation and continuously improved the well-being of the people and enterprises of the two countries. Taking trade as an example, according to statistics from General Administration of Customs of China, on the first year of the implementation of the Agreement - 2024 - the total bilateral trade between China and Nicaragua had reached USD 1.25 billion, an increase of 46.8% over the same period from the previous year. China's imports from Nicaragua had increased by 218.3%, and exports to Nicaragua had increased by 40.8%. The signing and implementation of the Agreement was a concrete measure to implement the "high-level opening up" proposed by the 20th National Congress of the Communist Party of China, and a vivid practice to expand the network of high-standard agreements facing the world under the framework of WTO rules. China was ready to explore free trade cooperation with more trading partners, promote trade and investment liberalization and facilitation, share development opportunities, and improve the well-being of people and enterprises.

1.8.  The representative of Nicaragua noted that for Nicaragua it was of the utmost importance that the principle of transparency, as a basic principle of the WTO, remained an essential element of the rules governing trade relations in the context of the multilateral trading system and in the evaluation of RTAs in force.

1.9.  On behalf of the Government of National Unity and Reconciliation, led by the Co-Presidents, Daniel Ortega and Rosario Murillo, he thanked the Government of the People's Republic of China for the frank, flexible and cooperative negotiations which had resulted in an Agreement that would yield mutual benefits for both countries. The Agreement was one of the great achievements arising from the resumption of diplomatic relations between the countries on 9 December 2021.

1.10.  Negotiations had been opened after that date for an Early Harvest Arrangement, covering a list of goods of interest to both Parties that had been granted a preferential zero tariff. That arrangement had entered into force on 1 May 2023 and had become an integral part of the Agreement which had entered into force for both countries on 1 January 2024.

1.11.  The Agreement was a modern and comprehensive trade policy instrument, consisting of 22 chapters and annexes regulating trade in goods, intellectual property, services and investment. It also covered aspects of the digital economy, the recognition of SMEs for economic growth, job creation and innovation, economic cooperation, as well as a framework for fraternal relations through good offices, conciliation, and mediation for dispute settlement.

1.12.  The main objective of the Agreement was to promote trade and investment between the peoples, and, for Nicaragua, it offered an opportunity to transform its structure of production, trade, and investment relations in the medium and long term through productive complementarity between the two countries.

1.13.  In the first year of application of the Agreement, trade between the two countries had showed an excellent rate of growth. In 2024, Nicaragua's total exports to China had reached 96,000 metric tonnes and USD 82 million, reflecting an increase of 548% in terms of volume and 71% in value compared to 2023. On the other hand, Chinese imports into Nicaragua had totalled USD 1,647 million, equivalent to a volume of 618,000 metric tonnes, with year-on-year growth in volume of 1.2% and in value of 19%. That was the result of the two countries' common goal of seeking new horizons for the expansion and diversification of trade, creating new employment opportunities for their citizens, enhancing labour cooperation and improving citizens' overall quality of life.

1.14.  He thanked the WTO Members for their important questions which had enriched this factual consideration, and the Chair for the opportunity to present that trade instrument, which was of major importance to both Parties.

1.15.  The representative of Thailand thanked China and Nicaragua for the constructive presentation. Thailand appreciated the Parties for providing the answers to their written questions, which had enriched their understanding of the Agreement. They wished for the successful implementation of the Agreement.

1.16.  The representative of European Union wished China and Nicaragua success in implementing the RTA and thanked them for their presentation.

1.17.  The representative of Canada thanked China and Nicaragua for presenting the Agreement and wished them every success in the implementation.

1.18.  The Chair noted the consideration of the goods and services aspects of the Free Trade Agreement between China and Nicaragua had allowed the Committee to clarify a number of questions and concluded oral discussion of the RTA in accordance with paragraph 11 of the Transparency Mechanism. Any delegations wishing to ask follow-up questions were invited to forward submissions in writing to the Secretariat by 25 March 2025 and Parties were asked to submit replies in writing by no later than 8 April 2025. In accordance with paragraph 13 of the Transparency Mechanism all written submissions, as well as minutes of the meeting, would be circulated promptly, in all WTO official languages, and made available in the WTO database on RTAs.

1.19.  The Committee took note of the comments made.

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