WORLD TRADE  
ORGANIZATION   
WT/TPR/M/274 
28 March 2013 
 (13-1686) 
Trade Policy Review Body 
4 and 6 December 2012  
 
 
 
TRADE POLICY REVIEW 
 
NICARAGUA 
 
Record of the Meeting 
 
Chairperson: H.E. Mr Eduardo Muñoz Gómez (Colombia) 
 
 
Page 
 
I. INTRODUCTORY REMARKS BY THE CHAI RPERS ON ................................................................... 3 
II. OPENING STATEMENT BY THE REPRESENTATIVE OF NICARAGUA ....................................... 6 
III. STATEMENT BY THE DISCUSSANT .............................................................................................. .... 8 
IV. STATEMENTS BY MEMB ERS ..................................................................................................... ....... 12 
V. REPLIES BY THE REPRESENTATIVE OF NICARAGUA AND ADDITIONAL 
COMMENTS ...................................................................................................................... .................... 35 
VI. CONCLUDING REMARKS BY  THE CHAIRPERSON ...................................................................... 41 
Note: Advance written questions by WTO Me mbers and the replies provided by the 
Government of Nicaragua are reproduced in  document WT/TPR/M/274/Add.1 and will be 
available online at http://www.wto.org/ english/tratop_e/tpr_e/tp_rep_e.htm. WT/TPR/M/274 
 Page 3 
 
 
  I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The third Trade Policy Review of Nicara gua was held on 4 and 6 December 2012. 
Chairperson H.E. Mr Eduardo Muñoz Gómez (Col ombia) welcomed the delegation of Nicaragua, 
headed by H.E. Mr Orlando Solórzano, Minister of Development, Industry and Trade; H.E. Mr Carlos Robelo Raffone, Ambassador, Permanent Representative of Nicaragua to the WTO; 
and the discussant, H.E. Mr Mario Matus (Chile). 
2. The Chairperson recalled the purpose of Trad e Policy Reviews and the main elements 
of the procedures for the meeting. The repor t by Nicaragua was contained in document 
WT/TPR/G/274, and that of the WTO Secretariat in document WT/TPR/S/274. 
3. Questions by the following delegations had b een submitted in writing at least two weeks 
in advance and had been transmitted to the delega tion of Nicaragua: Korea, Canada, Colombia, the 
United States, Brazil, Costa Rica, Japan, and Chinese Taipei. The following delegations had 
submitted written questions after the two-week dead line: El Salvador, the European Union, Chile, 
Mexico, India, the Dominican Republic, Panama and Ecuador. 
4. Both the report prepared by Nicaragua for this Review and the report by the Secretariat 
revealed that Nicaragua had an open trade and i nvestment regime with few border restrictions 
and limited use of non-tariff measures. The gene ral objective of Nicaragua's trade policy was 
to promote access to foreign markets and fu rther integration in the world economy through 
the negotiation and administration of international agre ements. It also sought to foster a stable legal 
framework for attracting foreign investment. Acco rdingly, Nicaragua had continued to implement 
policies and carry out structural reforms in line w ith the recommendations made during its previous 
Trade Policy Review in 2006. 
5. Nicaragua participated actively in the WTO and had shown a particular interest in improving 
market access for agricultural products. It had also  sought liberalization at regional level. In this 
context, the country participated in the Centra l American economic integration process, which had 
been consolidated in recent year s through the adoption of a Central American Uniform Customs Code 
and the standardization of most of the tariff,  and through the adoption of Central American 
regulations in a number of areas of the trade policy spectrum. Nicaragua was also party to the 
Free Trade Agreement (FTA) with the United States (CAFTA-DR) and had agreements with Mexico, 
the Dominican Republic, Chinese Taipei, Pa nama, Chile and the European Union. 
6. The Nicaraguan economy had successfully overcome the effects of the world financial crisis 
and other adverse external shocks  to which it had been exposed in recent years. In 2010 and 2011, 
GDP growth rates had reached 4.5% and 4.7% respectively, underpinned by a strong domestic 
demand trend and exports. Nicaragua needed to rema in on this path of growth to continue reducing 
poverty and the disparities between urban and ru ral areas. Export dynamism had to continue 
generating increased private domestic demand, which would help to enhance economic growth. In this 
respect, it was important to bolster production infr astructure and strengthen the current strategy for 
opening up to the international market and ensuring  legal stability, in order to promote an increase in 
the flow of goods, services and investment. 
7. On the external front, despite good export pe rformance, Nicaragua faced the challenge 
of diversifying not only its products, but the destin ations of its international sales. Such action would 
help it to avoid excessive vulne rability to external shocks. 
8. Nicaragua's third Trade Policy Review provided an opportunity to exchange views on matters 
of interest to all Members, including the following: WT/TPR/M/274 
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   Foreign investment regime: a number of Members had requested information on the 
application of national treatment and the limitations laid down in the Constitution, 
as well as on the foreign investment incentive scheme and the opportunities for 
foreign investors to participate in Na tional Human Development Plan projects. 
Enquiries were also made about the signing of bilateral investment agreements and 
investment protection mechanisms, including  land ownership. Nicaragua was urged 
to review its requirements regarding the recr uitment of local staff and its restrictions 
on foreign investment in civil aviation. 
 Customs procedures: Members had submitted questions on the measures envisaged 
to facilitate trade and streamline customs fo rmalities. Information had been requested 
on the draft Customs Law and the implementation of the electronic customs form. 
 Rules of origin: enquiries had been made regarding cross cumulation in the 
CAFTA-DR. 
 Tariffs and other import duties: questions had been asked about the slight increase 
in the average MFN tariff as compared to that reported during the previous Review; 
it had also been suggested to Nicaragua th at it introduce a system for notifying tariff 
reductions to the exporters concerne d and enquiries had been made about 
the implementation of the import service fee. 
 Import licences and prohibitions: Nicaragua ha d been urged to submit its outstanding 
notifications in this area. 
 Technical regulations and standards: Memb ers had asked questions about conformity 
assessment procedures, mutual recognition ag reements, a plan for drafting standards, 
and the appropriateness of certain food labelling requirements. 
 Sanitary and phytosanitary measures: information had been requested on the 
procedures for importing plant products and inspecting them at border points, the basis for GMO registration, and registration requirements for pharmaceuticals. 
 Free zones: Members had submitted questions regarding free zones and their 
relationship with certain regional agreements, such as the CAFTA-DR; they had also 
enquired about plans to increase the number of free zones and expand the covered 
sectors, and the counterpart contributions required from investors in free zones and the monitoring mechanisms to ensure compliance with them. 
 Measures affecting production and trade: Members had enquired about the reforms 
introduced via new legislation on government procurement and plans to join the ACP; support programmes for SMEs; measur es taken since the creation of the new 
competition body and plans to boos t competition; the activities of 
Petróleos de Nicaragua and the opportunen ess of their notification to the WTO; and 
the possibility of suspending imports/exports in the event of intellectual property 
right infringements. 
 Electricity: questions had been asked regarding State involvement in the sector, 
action and plans to achieve the renewable ener gy target, and provisions or restrictions 
on foreigners as regards the building of electric power stations. WT/TPR/M/274 
 Page 5 
 
 
   Services: Members had asked questions on liberalization plans and plans to submit 
an improved offer to the WTO; regardi ng telecommunications, questions had been 
asked about the procedure for granting con cessions and the existence of a reservation 
for essential public services; as regards fina ncial services, enquiries had been made 
about State involvement in the bank, State guarantees for the sector, and the 
assessment of the economic need for new banks ; on the subject of maritime transport, 
questions had been asked about the project regarding the possible construction of an 
inter-oceanic canal. WT/TPR/M/274 
Page 6  
 
  II. OPENING STATEMENT BY THE RE PRESENTATIVE OF NICARAGUA 
9. It is an honour for me to lead the delegation of Nicaragua in presenting the country's third 
Trade Policy Review. Nicaragua considers the regular review of Members' trade policies to be a valuable exercise, as it improves understa nding of how national policies affect the world 
trading system and helps each country to identify its achievements and the challenges with a view 
to furthering its growth, development, and inte gration into the world economy for the benefit 
of its people. 
10. Since Nicaragua presented its second report in  2006, the country has made significant 
economic and social progress, thanks to the so und leadership of the Government of National 
Reconciliation and Unity, led by Commander Dani el Ortega Saavedra. Nicaragua welcomes 
the opportunity to explain, before this importa nt international trade rule and discipline-setting 
organization, what it has achieved through its trad e policies and practices, which, despite the impact 
of the international financial crisis, adverse climat ic factors and the increase in international prices 
of raw materials and oil, have successfully mainta ined steady economic growth and helped to reduce 
inequality and poverty levels within the Nicaraguan population. 
11. It should be noted that this year the Presi dents of the Central American republics have 
commemorated the 25
th anniversary of the Esquipulas Agreem ents, which successfully established 
firm and lasting peace in the region. 
12. In Nicaragua's case, our Government has been  characterized by its ability to engage 
in dialogue and seek consensus, which has enable d us not only to focus on internal aspects and 
strengthen communication between, and the work ca rried out by, public and private institutions, 
but to build strategic alliances between the pub lic sector, the private sector and workers. 
Such alliances enable us to promote realistic econom ic and trade policies that are consistent with 
multilateral rules. 
13. Nicaragua is a country with a high level of op enness to internal and external trade. It has 
made progress in liberalizing markets by signing and bringing into effect bilateral, multilateral 
and interregional trade agreements with the Eur opean Union, and regional integration agreements 
with Central America and Latin American countries (L AIA, ALBA-TCP). We are also very interested 
in deepening our trade relations with the countries of South-East Asia. 
14. At the same time, Nicaragua is seeking to e nhance trade facilitation in a number of ways, 
including via the Law on Streamlining Formalities and Services within Government Bodies; the Interinstitutional Committee on Trade Facilitation (C IFCO), which brings together public sector 
institutions and private sector organizations; a nd the Presidential Delegation for Investment 
Promotion and Foreign Trade Facilitation (PRONICARAGUA). 
15. Nicaragua provides significant national and foreign investment opportunities on a 
discrimination-free basis. There is great potential for the development of investment in renewable 
energy, general infrastructure, agribusiness, mining, fisheries, and tourism. Having met its 
macroeconomic stability objectives and been publica lly recognized as macroeconomically stable 
by the international financial organizations, th e country is progressing towards sectoral, productive 
and commercial transformation. 
16. The average annual investment growth rate for the period 2006-2011 was 28%; in 2011, 
investment grew by 90.75%, and 13.3% as a percentage of GDP - the highest rates in the Central American region. Such investment has been encouraged by an appropriate legal and 
promotional framework, macroeconomic, social a nd political stability, free currency convertibility, 
and the high level of public safety, one of the highest in the continent. WT/TPR/M/274 
 Page 7 
 
 
  17. As regards energy, we have gone from eight  to twelve hours of power cuts in 2006 
to no power cuts at all at present, although power st ations are being used to deal with the current 
crisis. We are now transforming the energy matr ix, and have gone from producing 20% of energy 
from renewable sources in 2007, to 45% in 2011, and plan to increase this figure to 80% by 2017. 
18. In the social sphere, priority areas are food security and sovereignty; access to decent 
housing, education and healthcare; drinking wate r and sanitation; and social security and labour 
policy. Policies and programmes include: the Produc tion Voucher Programme, which, by distributing 
farm animals, provides capital for the small-scal e production of food for home consumption and local 
markets; policies to support small-scale agricultural production in terms of or ganization and technical 
and financial assistance; domestic market organi zation and the Zero Usury programme, which 
facilitates access to credit for sm all-scale producers; and the Roof Plan and Houses for the People 
projects. All these programmes are covered by Articl es 4 and 5 of the Constituti on of the Republic of 
Nicaragua and the Human Development Plan, which focus on human development and the standard of 
living and well-being of the population. 
19. Nicaragua is committed to the negotiations within the multilateral trading system and, 
as we have said before, has attached great impor tance to this system since the start of the 
General Agreement on Tariffs and Trade (GATT) , to which it became a contracting party 
in May 1950. 
20. Since then, we have taken care to abide by each of the commitments relating to the rules 
and disciplines of the multilateral system. Being a sm all and rural country, we have shown particular 
interest in the negotiations concerning agriculture, trade facilitation, special and differential treatment 
and trade's contribution to development. We have  been patient, and while fulfilling our obligations 
have encouraged the inclusion of issues that are of prime importance to small developing countries. 
21. Nicaragua hopes that the beginning of this century will see a fairer multilateral trading 
system, one which supports the economic and social  transformation programmes of small developing 
countries in such a way as to turn the principle of "trade equals development" principle into reality, 
and which helps to improve people's quality of life. WT/TPR/M/274 
Page 8  
 
  III. STATEMENT BY THE DISCUSSANT (H.E. MR MARIO MATUS (CHILE)) 
22. By way of introduction, I would like to point out that there is a lot which unites Nicaragua 
and Chile. First of all, literature. It is a well- known fact that Rubén Darío produced a significant 
amount of his work while living in Chile. One book I would highly recommend is "Azul", an extremely aesthetic work combing prose and poetry, which was published in Valparaíso, the 
trading capital of the Pacific for much of the 19
th century. 
23. I also have my own personal memories. My uni versity classmate was the famous Nicaraguan 
singer Hernaldo Zúñiga. He would always cheer us  up when the laws, decrees, legal principles 
and deadlines became tedious and boring. 
24. Nicaragua's recent history has taught us much about good sense and reasonableness. After 
years of harrowing civil war and upheaval in the 1980s, Nicaragua has successfully rediscovered 
a route to peace and political and social unity, while managing to stimulate economic growth and open trade. 
25. I prepared this statement with three qualitative categories in mind: outstanding, in need 
of attention, and worrying; or, using the famous cl assification system of film director Sergio Leone: 
the good, the bad and the ugly. 
26. Since its last Trade Policy Review in 2006, th e Nicaraguan economy has dealt with at least 
three adverse situations in a satisfactory manner: Hurricane Felix, the rise in food prices, and the international financial crisis. Despite these even ts, its economy grew by  4.5% in 2010 and 4.7% 
in 2011, which led to an improvement in its soci al indicators, most notably a decrease in poverty 
and illiteracy rates. During the review period, and with a view to minimizing economic distortion, 
Nicaragua maintained the free convertibility of its  national currency, the córdoba, under a crawling 
peg system. 
27. In spite of all this, I feel there are still certain  bottlenecks that need to  be addressed. In this 
respect, a number of questions have arisen regarding the following areas: 
 External accounts. Between 2006 and 2011, Nicaragua's balance-of-payments current 
account posted a deficit that fluctuated be tween 16% and 23.7% of GDP. This, added 
to the fact that the Nicaraguan economy rema ins vulnerable to external shocks, means 
that the country is in a high-risk situation. This is in large part due to its electricity 
subsectors' reliance on oil imports, and public debt. I am sure that Members would be 
interested to hear about Nicaragua's contingency plans to deal with this 
complex situation. 
 Inflation. It is estimated that the rise in the cost of living will reach almost 10% this 
year. As we all know, inflation is a scourge  that has the greatest impact on the poorest 
sectors of the population, namely those living on salaries that do not increase. Simply put, at the end of year, the wages and salaries of Nicaraguans will be reduced by the aforementioned 10%. Although it recognizes this, the Government of Nicaragua 
believes that by 2016 the inflation rate will be 7%. What strategy will Nicaragua follow to meet this objective? WT/TPR/M/274 
 Page 9 
 
 
   Energy. Statistics show that Nicaragua is hi ghly energy dependent. Given this, how is 
the country planning to reduce its dependen ce on imported oil? In other words, what 
action is being taken and what plans are there to promote alternative or 
renewable energy? 
 Public debt. Today Nicaragua's public debt still accounts for 72% of GDP, a level that 
many developed countries can only dream of. Although it has been steadily reduced 
over time – in 2005 it was 139% of GDP – th e current figure (72%) is still too high 
for an economy at the level of development of Nicaragua's. How does Nicaragua plan to deal with its high debt problem? 
 Remittances. Workers' remittances from abroad account currently account for 12% 
of GDP. However, with the generational ch ange of Nicaraguans outside the country 
and high unemployment rates in the countries where they are living, everything indicates that these remittances will decreas e over time. Has Nicaragua considered 
alternative sources of financing to alleviate the current account deficit, a large part of 
which is presently funded  by these remittances? 
 Internal taxes. In addition to the customs tariff, Nicaragua applies an import services 
tax (TSIM). I stress that "in theory" this is charged for services provided during the importation process. In this respect, two questions arise: What is the rationale of charging this tax per gross metric tonne? How is it possible to reconcile the real cost 
of the services provided by customs if there is no ceiling on the amount of TSIM that 
traders have to pay? 
 Poverty. While the poverty level has decreased and is therefore moving in the right 
direction, it is still too high. It continues to exceed 40%, with large disparities between urban and rural areas. It would be interesting to know how Nicaragua plans 
to address this unfortunate situation. 
28. Back in 2006, Nicaragua declared that the count ry's growth strategy was to be implemented 
"through trade liberalization, export promotion,  and a stable legal fr amework for attracting 
investment, both domestic and foreign" and added that it "includes an autonomous liberalization 
process, participation and strengthe ning of multilateral and bilatera l trade relations and expansion 
of the Central American integration process". 
29. Nicaragua has remained faithful to this decl aration. Today, 100% of its customs tariff 
is WTO-bound, the average applied MFN tariff is 6.2% , all tariffs are ad valorem and 46.4% of tariffs 
lines are set at zero. Nicaragua has not applied special trade measures and in 2007 it began implementing the Central American Regulations on Unfair Business Practices. Moreover, it grants 
national treatment to public sector purchases of goods and services, and, during the period under 
review, improved and updated most  legislation and regulations relating to services. In the same 
period, Nicaragua also implemented new legisla tion on safeguard measures, which has not been 
applied to third countries. Lastly, regarding intell ectual property, it should be noted that since its 
last Review, Nicaragua has acceded to the Lisbon Ag reement, the Budapest Treaty and the Trademark 
Law Treaty. WT/TPR/M/274 
Page 10  
 
  30. Areas of concern: 
 Licensing. Nicaragua is known to have an import licensing regime that has not been 
fully notified to the WTO. When will this notification be made? 
 Tariffs. The Secretariat notes that the aver age applied MFN tariff rose from 5.8% in 
the last Review to the current level of 6.2%. Why has it risen? The tariff peaks that 
exist for certain products, such as chicken thighs (164%), milled rice, and milk (60%) 
also require further explanation. 
 Maritime transport. Nicaragua restricts domestic traffic and cabotage 
to Nicaraguan-registered ships operated by Nicaraguan ship-owners. Moreover, 
cabotage passenger and freight services may only be provided by Nicaraguan natural or legal persons. Although this practice is not infrequent among WTO partners, it 
clearly restricts trade and foreign invest ment. We must therefore enquire as to 
whether Nicaragua has any plans to lib eralize the sector and if so, when? 
31. As regards subsidies, Nicaragua did not grant any subsidy within the meaning of the 
Agreement on Subsidies during the period under review ; nor did it grant any export subsidies within 
the meaning of the Agreement on Agriculture. Furtherm ore, it grants national treatment for free zones, 
not only for companies but for goods and services supplied under this system. Judging by their performance, free zones have had a positive impact. In fact, by December 2011, 161 companies were 
operating with free-zone status in Nicaragua, ge nerating close to 100,000 jobs and exporting more 
than US$2 billion worth of goods and services. 
32. The way in which Nicaragua has successfu lly promoted access to foreign markets 
and become better integrated in the interna tional economy by negotiating and administering 
international agreements on trade and investment is positive. In fact, the country already participates 
actively in the Central American regional integra tion process and has free trade agreements (FTAs) 
with Chile, the United States (CAFTA-DR), Mexico, the Dominican Republic, Panama, 
Chinese Taipei, and the European Union (Asso ciation Agreement with Central America). 
33. Areas of concern: 
 Multilateralism versus bilateralism. We know that bilateral or regional trade 
agreements – an exception to multilateralis m - are "in fashion". Nobody is free of 
blame. Does Nicaragua envisage - in the medium term at least - the multilateralizing 
of such agreements? 
34. Nicaragua has included trade facilitation in the mandate of the Nicaraguan investment 
promotion agency PRONicaragua. Worthy of note is the implementation of the Central American 
Computerized Tariff (AIC) System, which covers a ll of the taxes and tariff reductions applicable 
to products entering the Central American Co mmon Market (CACM) under the FTA framework, 
as well as the non-tariff measures, technical regulati ons, sanitary and phytosanitary measures, quotas 
and safeguards currently in force. It should be added that, with a view to facilitating trade, 
the temporary admission procedure allows both the en try of goods into Nicaraguan customs territory 
and the local purchase of goods or raw materials free from any duty or tax, provided the goods are re-exported after undergoing pr ocessing, repair or alteration. 
 Customs inspections. While some progress has b een made in this area to ensure trade 
flows more smoothly, it is not enough. What  steps are being taken or planned to 
further the trade facilitation process, in partic ular in terms of reducing inspections and 
streamlining procedures? WT/TPR/M/274 
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  35. Nicaragua pursues a policy of openness to foreign investment. To that end, it has strengthened 
the institutions responsible for promoting investme nt. Foreign investors enjoy the same or greater 
rights as Nicaraguan investors; greater rights, as foreigners may opt to take recourse to the 
International Centre for Settlement of Investment  Disputes (ICSID). Nicaragua has signed bilateral 
investment agreements with 21 countries and the el ectricity sector has been open to foreign private 
investment since 1997. Today, electricity generation is mainly in the hands of the private sector, 
which generated 78.5% of electricity in 2011. 
 Attracting foreign capital. The Nicaraguan government recognizes the importance of 
foreign investment. Does Nicaragua therefor e plan to implement any new measures to 
attract more foreign investment, a bove all with greater value added? 
36. The truth is that if this Review had been  conducted in a school environment and was 
receiving end-of-year marks, Nicaragua would pass with good marks and go up to the next class. 
It would however receive the following comment  from the headmaster: "very good performance 
throughout the period in ques tion, but needs to improve its 'soft sk ills', which unfortunately are not yet 
taught at the WTO school". 
37. Nicaragua's school building has sound foundations a nd is made of well-textured solid bricks, 
all approved by the WTO. The problem is that very  little mortar has been used in the walls, which 
makes the building unstable and unsafe. In fact, Transparency International ranks Nicaragua 127th 
out of 178 countries, the World Bank 119th out of 185 as a place to do business, and the Human 
Development Index, 129th. 
38. I am sure that Nicaragua will not stray from the co rrect path that the reports before us suggest 
it is taking and that it will continue steadily dow n the route towards development and prosperity. 
As the singer-songwriter Silvio Rodríguez quite righ tly said, "Nicaragua will continue on its way in 
glory, because wise blood formed its history". WT/TPR/M/274 
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  IV. STATEMENTS BY MEMBERS 
KOREA 
39. We are pleased to note that Nicaragua and Korea have maintained a close cooperative 
economic relationship. Based on the stable growth  of the Nicaraguan economy, our two countries 
have been in the process of expanding bilateral trad e and investment. In particular, 33 Korean textiles 
and clothing companies are investing some US$150 m illion in the free zones in Nicaragua, employing 
roughly 30,000 people there and accounting for more than 50% of the Nicaraguan textiles exports. 
This year, our two countries celebrate the 50
th anniversary of the establishment of diplomatic ties. We 
very much hope and expect that our cooperative re lations, particularly in the areas of trade and 
investment, will continue to be strengthened in the future as well. 
40. Turning to Nicaragua's overall economic perform ance, we are very pleased to note that 
Nicaragua has successfully weathered a series of adverse shocks, such as those which were related to the global financial crisis a nd the damage caused by hurricane Felix, primarily as a result of its 
sound fiscal policies combined with strong domes tic demand as well as exports particularly 
of agricultural products. We would like to encourage Ni caragua to continue to make efforts to reform 
its economy, thereby further reduci ng its vulnerability to external shocks and public debt. We also 
hope that the government of Nicaragua will step up it s efforts to address such social challenges as the 
relatively high poverty rate and the disparity between  urban and rural areas, with the aim of putting 
the economy on a more sustainable and equitable track. 
41. As far as Nicaragua's trade policies and prac tices are concerned, we would first like 
to highlight a positive note that it has maintained a generally open trade and investment regime. 
Nicaragua's average MFN tariff is relatively low and the use of non-tariff measures and trade 
remedies is limited and restrained, as the Secretaria t report indicates. Nicaragua has also made serious 
efforts during the period under review to improve its customs procedures and investment climate. 
42. At the same time, we would also like to encour age Nicaragua to continue to further liberalize 
its trade and improve its business environment in order to enhance the overall competitiveness of its 
economy and better integrate with the global economy. In this regard, we would kindly ask Nicaragua 
to elaborate on its plans to further open its servic es sector, noting that it made commitments under the 
GATS in just five of the 12 sectors despite the fact  that services are the most important sector in 
Nicaragua in terms of their cont ributions to GDP and employment. 
43. We submitted several advance written questions to  Nicaragua, including those related to what 
we have just mentioned, and thank Nicar agua for providing answers which Seoul is 
reviewing carefully. 
CANADA 
44. The reports from the Nicaraguan government, WTO Secretariat, and discussant have 
furnished a mixed picture of developments in Ni caraguan's trade and investment regime since the 
last review. 
45. On the positive side, Canada was pleased to note in the Secretariat report that foreign direct 
investment to Nicaragua more than tripled during the review period. The increase is no doubt due in part to Nicaragua's prudent fiscal management a nd ongoing reforms to attract investment and more 
deeply integrate into the world economy. Canadi an companies, entrepreneurs, and investors 
in particular have demonstrated their interest  in the Nicaraguan market as Canada represented 
the largest single source of foreign direct investment to Nicaragua in 2011. WT/TPR/M/274 
 Page 13 
 
 
  46. On the other hand, Canada believes that re forms to improve transparency, democratic 
governance and the rule of law are necessary to achieve a more stable business environment. 
For example, the lack of a valid system to regist er property has led to confusion, court battles, and 
confiscations of land and property. In addition, Ca nada has expressed concerns regarding the conduct 
of Nicaragua's 2008 municipal elections, 2011 nationa l elections, and the 2009 decision to eliminate 
the ban on consecutive re-election. 
47. Canada is also concerned that Nicaragua's gl obal ranking in the World Bank Report has fallen 
from 72 to 119 over the review period. Canada en courages Nicaragua to continue with needed 
reforms to promote a positive business environment,  including in the areas of securing construction 
permits, accessing electricity, and protecting investments. 
48. Regarding bilateral trade, the review of Nicar agua again paints a mixed picture. On the 
positive side, Canada was pleased to note, with th e exception of a downturn in 2009, steady growth 
from nearly US$87 million in 2006 to a high of US $371 million in 2011, which includes increases 
in Canadian imports from Nicaragua by 55% in 2011  over the previous year. Canada would also like 
to thank Nicaragua for its willingness to reach an agreement to provide access for all Canadian beef 
and pork. Canada appreciates Nicaragua's cooperati on, and science-based approach, in reaching this 
agreement. 
49. On the other hand, Canada is concerned to no te a 7% decrease in Canadian exports in 2011 
over the previous year, and believes that im provements to streamline Nicaragua's customs 
formalities by reducing the number of physical in spections, cutting clearance times, and undertaking 
needed reforms to its import licensing regimes would assist Canadian exporters in accessing 
the Nicaraguan market. 
50. Canada reaffirms its commitment to helping Nicaragua address some of the current 
challenges that prevent it from meeting its devel opment objectives. For example, with a view to 
improving trading conditions, Canada has recen tly established a Canadian Business Advisory 
Council, which has proved to be a useful foru m for sharing information with the Nicaraguan 
government. Canada also continues to be a significan t donor of bilateral aid and provided Nicaragua 
with more than 20 million in official development assistance in the fiscal year 2010-2011. Lastly, with a view to helping improve democratic governance,  Canada supported the Organization of American 
States Electoral Observation Mission for the presidential elections in November 2011 and the municipal elections held on 4 November 2012. 
51. In closing, Canada looks forward to the di scussion of Nicaragua's trade and investment 
policies, and appreciates Nicaragua's answers to our  written questions. Given th e mixed nature of the 
trade policy review, Canada hopes that the fort hcoming dialogue, questions, and recommendations 
contribute to an increased sense of confiden ce among Members that the unfinished business 
highlighted in the review is being addre ssed and needed reforms are well in train. 
COLOMBIA 
52. Nicaragua successfully withstood the world financ ial crisis and other external shocks and 
situations thanks to prudent macr oeconomic management based on a fi scal policy aimed at containing 
the budgetary deficit. This enabled the country to  achieve positive growth ra tes throughout the period 
under review, except in 2009. The effects have been very positive, including for social indicators such 
as the poverty rate, which fell by 5.8% between 2005 and 2009. Nicaragua's poverty rate nevertheless 
remains fairly high. 
53. Regional integration has become a pillar of Ni caragua's trading and investment system and 
promotes an open policy with a view to concluding  agreements that not only provide legal stability WT/TPR/M/274 
Page 14  
 
  but diversify the country's export products and destinations so as to ensure that it does not rely 
exclusively on products such as coffee and sugar. Pa rt of Nicaragua's intention is to develop a more 
solid industrial base geared towa rds exports through the use of fre e zones, which has led to an 
increase in the industrial sector's share in GDP. 
54. However, there continue to be a number of in ternal factors that could decimate Nicaragua's 
potential to achieve sustained economic growth . These include the country's heavy reliance 
on petroleum products, which makes it vulnerable to  external circumstances; the under-utilization 
of its own energy sources; and electricity supply s hortages. Budgetary and trade imbalances may also 
continue in the medium term. 
55. With regard to trade policy developments in Nicaragua, we would like to highlight a number 
of the significant steps forward mentioned in the Secretariat's report: 
 The enactment of the Law on the Promotion of Competition, which has, amongst 
other things, created a favourable envi ronment for investment. Nevertheless, 
investment levels remain low in relation to the country's potential. 
 The private sector's active participation in the trade policy formulation process, with a 
view to making the most of the benef its deriving from the agreements signed. 
 The computerization of customs procedures, which constitutes a significant step 
forward in terms of trade facilitation. The private sector, however, feels that further 
improvements could be made to streamli ne formalities and reduce clearance time. 
 The entry into force of the Law on Govern ment Procurement, which allows for open 
competition between agents interested in participating in tenders. 
 The modernization of regulations in certain services sectors, so as to ensure 
consistency with internati onal standards. While telecommunications have expanded 
significantly, in terms of both coverage and the services provided, the sector faces limited competition, as reflected in the small number of service suppliers. 
56. Lastly, we wish to highlight the guiding objec tive of Nicaragua's trade policy, as established 
in the country's National Human Development Plan: " to regulate Nicaragua's trade relations with 
the rest of the world by way of fair, competiti ve trade, meaning genuine recognition of imbalances 
between countries' economies, and correction of the distortions in world markets ". This objective 
reminds us that development must remain an im portant component of the WTO's work, so that 
progress in international trade ultimately leads to the improved well-being of our citizens. 
UNITED STATES 
57. The United States and Nicaragua enjoy a stro ng trade and economic relationship. Trade 
and economic integration between the United States a nd Nicaragua are key elements of our bilateral 
relations and generate import ant benefits for both of our countries and for the region. 
58. For many years, our trade relationship with Nicaragua was driven by the unilateral trade 
preferences that the United States provides through the Caribbean Basin Initiative trade preferences 
program. This program contributed to economic grow th and development in Nicaragua. Our bilateral 
relationship changed from one based on unilateral trade preferences to one based on reciprocal free 
trade through implementation of the Dominican Republic – Central America – United States Free Trade Agreement (CAFTA-DR), a regional free trade agreement between the WT/TPR/M/274 
 Page 15 
 
 
  Dominican Republic, the United States, and five Cent ral American partners: Costa Rica, El Salvador, 
Guatemala, Honduras, and Nicaragua. 
59. The CAFTA-DR represents a key trade-liber alizing step taken by Nicaragua during 
the review period. The CAFTA-DR was signed in A ugust 2004 and entered into force for Nicaragua 
on 1 April 2006. Under the agreement, the Parties ag reed to remove tariff and non-tariff barriers to 
trade and investment, which has strengthene d regional trade and economic integration. 
The CAFTA-DR also includes important disciplines  relating to: customs administration and trade 
facilitation, technical barriers to trade, governme nt procurement, investment, cross-border trade 
in services, financial services, telecommunications, electronic commerce, intellectual property rights, transparency, and labour and environmental protection. 
60. The impact of CAFTA-DR on our bilateral trad e flows is evident and has remained strong 
despite the impact of the global financial cris is in 2008 and 2009. Be tween 2005 (pre-CAFTA-DR) 
and 2011, U.S. and Nicaragua total two-wa y trade in goods more than doubled, from 
over US$1.8 billion to nearly US$3.7 billion. The United States imported a total of $2.6 billion from 
Nicaragua in 2011, an increase of 29.7% from 2010. U.S. goods export to Nicaragua 
totalled $1.1 billion, an increase of 7.8% from 2010. Our CAFTA-DR partner countries combined 
would currently be our 13
th largest goods trading partner with  US$59 billion in total two-way goods 
trade in 2011. 
61. Much has happened since Nicaragua's last re view in 2006, as the government has continued 
to promote access to foreign markets and has sought  to enhance Nicaragua's integration into the 
global economy. The United States commends Nicaragua  on the direction of its trade liberalization 
strategy, as Nicaragua continues to pursue great er integration in the global economy by opening 
markets, stimulating domestic production and promoting national efficiency, diversification, 
and competitiveness. 
62. Both the Secretariat and the Government re ports note Nicaragua's commitment to uphold 
free trade, a strategy that Nicaragua has pursued at the multilateral, regiona l, and bilateral levels. 
On the multilateral front, Nicaragua has been an  active Member of the WTO, as noted by the 
Secretariat's report. At the regiona l and bilateral levels, economic integration a nd preferential trade 
agreements have been increasingly important elements of Nicaraguan trade liberalization, as Nicaragua has sought to further liberalize trade through preferential agreements with a number of 
countries. Significantly, in addition to the CA FTA-DR, Nicaragua and other members of the 
Central American Common Market continue to ta ke steps to deepen Central American economic 
integration, including actions to strengthen ins titutions, to harmonize regulations, and to facilitate 
trade. Nicaragua also has trade agreements w ith Mexico, the Dominican Republic, Chinese Taipei, 
Panama, and has concluded trade negotiations wi th Chile. Nicaragua and its Central American 
partners have completed negotiations of an Asso ciation Agreement with the European Union, and 
Nicaragua is intensifying its trade relations  with a number of other countries through the 
"Bolivarian Alliance for the Peoples of Our America" (ALBA). 
63. As indicated by the Secretariat and Government's reports, the period of review was also 
an active time for trade policy reform within Nicaragua. Nicaragua implemented a number of significant modifications to its domestic tr ade regime, amending its institutional and legal 
framework to reinforce the trade liberalization pro cess. During the review period, Nicaragua enacted a 
number of new laws and regulations , both domestically and at the re gional Central American level. 
Many of these changes were prompted by commitments that Nicaragua undertook 
in the CAFTA-DR. We further commend Nicaragua for the progress it has made in the customs area 
by implanting a risk assessment system and reducin g customs clearance times over the review period. WT/TPR/M/274 
Page 16  
 
  64. While the United States applauds these positive e fforts, there are, nonetheless, specific areas 
of Nicaragua's policy regime where further acti on could lead to improved trade and investment 
opportunities and flows. We encourage Nicaragua to  continue along the path toward free market 
policies and greater integration into the global economy, including by addressing governance issues, 
such as strengthening the rule of law and predicta ble, transparent and non-discriminatory application 
of measures. While we note the improvement in custom clearance times, we agree with 
the Secretariat's assessment that further improvements could be made to streamline customs formalities, for example, by reducing the number of  physical inspections and cutting clearance times 
further. We submitted advance written questions, many of which touched upon these areas where 
further improvements could potentially be made, and we greatly appreciate Nicaragua's efforts 
to provide responses. 
65. In closing, I would like to emphasize that we  continue to value our close work with 
the Government of Nicaragua – both bilaterally a nd in the WTO. We remain committed to working 
with Nicaragua and our other WTO partners to  strengthen and build on the WTO's rules-based 
foundation. We thank the delegation of Nicaragua for its participation in this important process, 
and welcome the opportunity to engage with Ni caragua and other delegations in a discussion 
of Nicaragua's trade policy regime. 
BRAZIL 
66. Brazil is glad to note that Nicaragua's economy h as been able to grow steadily, at an average 
rate of 4% yearly, since the last review in 2006 of its trade policy. Like most countries, Nicaragua's GDP contracted in 2009, at the peak of the world economic crisis, by 4%. 
67. But it has managed to recover well since then, largely as a result, as the Secretariat's report 
has highlighted, of prudent management of m acro-economic policy. Nicar agua's economy expanded 
by 4.5% in 2010 and by an additional 4.7% in 20 11, within the context of relatively open trade 
and investment regimes. 
68. Social indicators have improve d overall and poverty levels have  been reduced as the economy 
expanded. To be sure, there is still plenty of r oom for improvement in the living conditions of the 
people of Nicaragua. A significant percentage of  Nicaraguans remains below the poverty line. 
69. However, one should not underestimate the gains of the past few years, in light of two factors: 
(i) the internal reconciliation process that has been a long road for Nicaragua; and (ii) the external 
shocks the Nicaraguan economy has been faced w ith during the period under review, including 
the world economic crisis, heavy damage provoked by hurricane Felix and an increase in food and 
oil prices. 
70. Brazil sees with great satisfaction the steady grow th in its trade with Nicaragua. Since the last 
review, bilateral trade flows have more than doubled, reaching 120 million dollars last year. 
The volume is still relatively modest, but potential for growth is high. Moreover, industrial goods prevail in bilateral trade. In 2011, industrialized  products accounted for almost three quarters of all 
goods in the Brazilian exports list. In the importin g side, Brazilian purchases from Nicaragua have 
increased three-fold over the past five years, and today 84% of these imports are of manufactured items. 
71. In the services sector, relations between Brazil and Nicaragua have also been expanded. 
Noteworthy in this respect is the number of projects in which Brazil participates either with technical 
and material support or in cooperation with Nicaragua n authorities. This partnership is particularly 
gratifying in cases in which Brazilians have been able to support the efforts of 
Nicaragua's government to increase the share of renewable sources in the country's energy mix, WT/TPR/M/274 
 Page 17 
 
 
  objective to which Brazil is also fully committed. In the construction of the Tumarín Hydroelectric 
Power Plant, for example, Brazil has contributed  both in the financing and in construction of 
the project. 
72. Still in the context to improve Nicaragua's ener gy generation and distri bution, other relevant 
initiatives that I can mention here are (1) the Brazilian sharing of technical knowledge for the 
production of biomass fuel and (2) the coopera tion to improve Nicaragua's infra-structure 
so as to deliver electric power in rural areas. Once th ese projects start bearing fruit, they will certainly 
contribute to enhancing the quality of life locally  as well as to creating conditions for the attraction 
of more foreign investment into the country. 
73. Finally, Brazil attaches high importance to Nicaragua's accession to the Latin American 
Integration Association. My country has always supp orted the initiative by Nicaragua in this regard 
and hopes that it can soon join its Latin Am erican partners in that Organization. 
COSTA RICA 
74. While we maintain close historical and cultural ties with our Nicaraguan neighbours, 
our trade relationship is also strong and based on th e General Treaty on Central American Integration, 
which gave rise to the Central American Comm on Market. Nicaragua has traditionally been one 
of our main partners in the region and in the last four years has become the main destination for Costa Rican exports to Central America (30.8% in 2011). 
75. At the WTO, we have also been able to work closely with Nicaragua in a number of areas, 
including the Tropical Products Group, and are satisfi ed with the work we have carried out jointly 
with the Mission of Nicaragua in seeking not only to improve market access for products of interest 
to us, but to materialize the "offensive" aspect of special and differential treatment through the 
creation of new trade opportunities. 
76. On this occasion, my delegation wishes to highlig ht certain areas of the Secretariat's report 
which seem particularly relevant. First, like others, we are pleased to note the solid growth of the 
Nicaraguan economy in recent years thanks to st rong internal demand and exports, which has led 
to improvements in social indicators, such as the reduction of poverty and illiteracy levels. 
77. We would also like to emphasize Nicaragua's po licy of openness to foreign investment, which 
is reflected in national treatment for foreign inv estors in the majority of cases and the bilateral 
agreements for investment promotion and protection th at the country has signed. This regime has been 
supplemented by the Law on the Promotion of Comp etition and the creation of the National Institute 
for the Promotion of Competition, which have helped  to make it more stable and solid. This legal 
framework was key to the outstanding growth of FDI in the 2006-2011 period. As noted in both the 
Secretariat's report and the Nicaraguan Government's report, such investment grew at an average annual rate of 28% and by more than 90% in 20 11, which has resulted in increased capacity for 
electricity generation, oil refining and telecomm unications (mobile telephony). Investment in the 
manufacturing sector, together with the entry into  force of trade agreements like the CAFTA, 
has enabled this sector to gain  relative weight in the GDP. 
78. We are also pleased to note what the Nicaraguan government's report says about 
the promotion of trade facilitation programmes and th e importance given to this matter. Activities in 
this area have included the computerization of th e majority of customs procedures and the creation 
of the External Trade Facilitation Office and th e Interinstitutional Commission on Trade Facilitation. 
79. On the occasion of this Review, we have posed a number of questions. In particular, we have 
requested details about the administration of t echnical measures and sanitary and phytosanitary WT/TPR/M/274 
Page 18  
 
  requirements, conformity assessment procedures, changes made to the Law on Public Sector 
Administrative Procurement, intellectual property ri ght protection, the financ ial and banking system, 
foreign direct investment, and services. We thank Nicaragua for its replies, which we have sent 
to our authorities. 
JAPAN 
80. As shown in the report by the Secretariat, Jap an recognizes that Nicaragua is relatively open 
both in trade and investment, and also has quite a diversified economy. Moreover, Japan appreciates that, during the review period, even under seriously limiting factors such as the damage due to Hurricane Felix in 2007, and the global fina ncial crisis in 2008, Nicaragua has successfully 
overcome these difficulties and has steadily achieved ec onomic growth. This is demonstrated by the 
fact that Nicaragua experienced 4.5% GDP growth in 2010 and 4.7% in 2011, despite 
a 1.5% economic contraction in 2009, which s hould be noted as a quite fine accomplishment. 
81. Also, according to the Secretariat report, the Nicaraguan government implemented a variety 
of actions in its tax policies in 2009, including an expansion of the tax base and improvement of 
tax administration, and thus increasingly gained revenue which enabled the Nicaraguan government 
to succeed in building up its macro-economic conditi ons by reducing the public debt and reinforcing 
the international reserves of the Central Bank. Japan appreciates these efforts in macro-economic 
policies in that these measures as well as flourishing domestic demand and export of mainly agricultural products have played a crucia l role in the steady economic improvement. 
82. With respect to trade liberalization, Nicara gua regards the DDA as important. In addition, 
it has established regional trade agreements with the United States, Mexico, the Dominican Republic, 
Panama, and Chinese Taipei, and has concluded an RTA with Chile, and the Association Agreement 
between Central America and the EU. Japan takes note of these efforts by Nicaragua. 
83. Japan recognizes Nicaragua's variety of strenuous  efforts to promote foreign investment. 
However, we are also informed of a case of expr opriation of land in Nicaragua, and that the legal 
safety net to guarantee foreign investors' property is not sufficient. Japan would like to request 
Nicaragua to take further steps in this regard. 
84. Finally, Nicaragua has declared various steps for improving electric power, such 
as the promotion of use of renewable energy sour ces to generate electricity. However, since the 
unstable power supply with frequent power out ages continues to undermine the economic 
environment and obstruct foreign investment, such  as from Japan, we request further measures 
to enhance the stability of the power conditions. 
SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU 
85. Nicaragua's economy has performed well during the period under review. We can see there 
have been significant political, social and economic changes, and continued promotion 
of development and economic grow th. Its exports have increased considerably over the period, 
the battle to combat poverty is successful, and Ni caragua has made infrastructure improvements in 
key areas, such as renewable energy production. We were  pleased to note, for example, that in 2011 
the growth rate of Foreign Direct Investment in Nicaragua was the highest of all in the Central American region. The fact, also, that Nicara gua is the country with the highest level of public 
safety in the region is definitely a contributing factor in helping to attract FDI. 
86. We enjoy a close trading relationship with Ni caragua. Since the entry into force of our 
Free Trade Agreement in 2008, trade between us ha s positively flourished. The value of Nicaragua's 
exports to us has risen from US$10.1 million in 20 07 to US$38.4 million in 2011, reaching an annual WT/TPR/M/274 
 Page 19 
 
 
  growth rate over the period of just under 40%. Ov er the same period, our FDI to Nicaragua has 
totalled some US$8.5 million and has accumulated to US$134 million. 
87. Within the WTO as well, we have always enjoyed a very good working relationship with 
the Mission of Nicaragua, under the very capable lead ership of Ambassador Carlos Robelo Raffone. 
We look forward to continuing the partnership, an d working hand-in-hand to help provide a more 
stable, secure, transparent, predictable and fair trading environment around the world. 
88. In our written questions submitted in advance we expressed a particular interest in the 
incentive measures being taken by Nicaragua to boost and attract foreign investment, as well 
to promote the generation of renewable electrici ty, and we have already received comprehensive 
responses to our questions. We particularly appreciate the Nicaraguan government's policy 
of encouraging foreign investment through its est ablishment of a safe environment for the public, 
social and macroeconomic stability and a sound regu latory framework under the principle of respect 
for private property. At the same time, it has created a legal framework that seeks to improve 
transparency and provide greater legal certainty for foreign investors. 
EL SALVADOR 
89. In relation to our current exercise, we wish to emphasize Nicaragua's excellent 
macroeconomic performance since its last Trade Po licy Review, which clearly played a large part 
in offsetting the impact of negative external shoc ks during the period under review. Being a small and 
open economy, it managed to maintain  significant growth during most of the period, recording growth 
of 4.5% and 4.7% in 2010 and 2011 respectively. As a result, in July  2012, the International Monetary 
Fund (IMF) referred to Nicaragua's "robust" economic  recovery and its "fa vourable macroeconomic 
performance on the back of sound policies, high e xport prices, and large investment inflows". 
The Fund noted that even the fiscal out-turn "surpassed expectations". 
90. It is also important to note that last November, the Nicaraguan government and the 
World Bank agreed to implement the new "2013-2 017 strategy to promote social well-being and 
greater productivity", which seeks to improve the social well-being of the most vulnerable sectors 
of the population and increase the country's pr oductivity and competitiveness. According to the 
Nicaraguan Government, this strategy supports  priorities established in the National Human 
Development Plan, with a view to providing the most vulnerable sectors of the population with better access to social services such as education and health, improving infrastructure, and encouraging 
private investment. It should be noted that the relati ve contribution of 5.5% to growth in GDP by the 
transport and communications sector was a result of the flow of foreign direct investment (FDI) 
in communications. Private investme nt was also influenced by the growth of FDI, which in 2010 
amounted to 63% of private investment and 13.7% of GDP, the highest level for 40 years. 
91. The Secretariat's report points out, however, that in spite of these positive results, 
the Nicaraguan economy remains vulnerable to exte rnal shocks, largely due to the dependence 
of its electricity and transport subsectors on oil im ports and the magnitude of its public debt, which 
in 2011 amounted to 71.8% of GDP. 
92. In recent years, Nicaragua has made substantial progress in terms of its social indicators. 
The general poverty level, for example, fell from 48. 3% of the population in 2005 to 42.5% in 2009, 
while the percentage of the population living in  extreme poverty fell from 17.2% of the total 
population in 2005 to 14.6% in 2009. In the last two years, there has also been a significant improvement in the distribution of consumption: the Gini consumption coefficient fell from 0.41 in 
2005 to 0.37 in 2009. WT/TPR/M/274 
Page 20  
 
  93. Despite Nicaragua's progress in the social a nd sustainable development spheres, poverty 
levels remain significant, as do the disparities betw een urban and rural areas. In 2011, Nicaragua was 
ranked 129
th in the Human Development Index and came second-to-last in Central America's human 
development ranking. 
94. With regard to trade and investment, it should be noted that Nicaragua has a relatively open 
trade and investment regime. Like El Salvador, Nicaragua's trade policy seeks primarily to promote 
access to external markets and improve integr ation in the interna tional economy through 
the negotiation and administration of interna tional agreements that address economic and 
social needs. 
95. As regards investment, the Nicaraguan gove rnment has strengthened the institutions 
responsible for promoting investment, and h as included trade facilitation in the mandate 
of the Nicaraguan investment promotion ag ency PRONicaragua, which operates under the 
Office of the President. Worthy of note is the adoption of the Law on the Promotion of Competition and its regulations, which entered into force in June 2007 and govern an ti-competitive agreements, 
abuse of dominant position and concentr ations (mergers and acquisitions). 
96. The Nicaraguan customs regime, like that of El Salvador, is based on the Central American 
Uniform Customs Code (CAUCA) and its impl ementing regulations (RECAUCA). Regarding 
customs and trade facilitation, Nicaragua made considerable progress during the review period, 
including by computerizing most customs proce dures; it has also implemented a risk assessment 
system based on fixed rules as well as probabilis tic and random models to reduce the number 
of inspections. Nevertheless, there is always room  for further improvement; as the Secretariat's report 
points out, it appears that reforms could be made  to streamline formalities and reduce clearance time. 
97. Regarding services, it should be noted that this sector is the most important in terms of its 
contribution to GDP (58.4% in 2010) and employme nt (55.8% in 2010). In the period under review, 
legislation and regulations governing services were updated. 
98. Turning to intellectual property rights, our de legation acknowledges the work that has been 
carried out and congratulates Nicaragua on the im provements made to its legal and regulatory 
framework, such as the adoption of the Law on Ancestral Traditional Medicine, which defines 
traditional knowledge and bio-piracy and establish es requirements for collective intellectual property 
right patents. 
99. We note the work carried out in respect of the ongoing construction of the Central American 
Customs Union, which focuses on integratio n through the coordination, harmonization 
and convergence of economic and othe r policies; we firmly believe that Nicaragua considers this 
a necessary and indispensable requirement for boosting the development of our region. The aim is to achieve equitable economic and social deve lopment in Central American countries and to see 
it reflected in the well-being of their people and the growth of all member countries. 
100. Trade relations between Nicaragua  and El Salvador have become  stronger in terms of exports, 
imports and investment and are fluid particularly in areas such as food and other agricultural products, 
trade, and hotels. This has fostered initiativ es such as the establishment of a new joint 
Chamber of Commerce and Industry, the "Salva doran-Nicaraguan Development Association" 
(SALNIC), which already covers some 25 Nicara guan and Salvadoran companies, bringing our 
presence in that market to no less that 50 Salvadoran  companies in various sectors such as trade, the 
automotive industry, hotels, restaurants and textile s. In 2011, for instance, Nicaraguan exports to 
El Salvador amounted to approximately 201 million dollars, without including the large amounts of 
foreign investment. WT/TPR/M/274 
 Page 21 
 
 
  101. In the multilateral framework, we note the activ e and constructive role played by Nicaragua 
in both routine and non-routine WTO work. 
EUROPEAN UNION 
102. The Secretariat report acknowledges the Nicara guan achievements in opening its economy 
since 2006. Nicaragua has successfully implem ented several important political and economic 
reforms since the last review. With an average economic growth of 4.7%, the country has managed 
to improve the living conditions of the population d espite the financial crisis. Nicaragua is pursuing 
a policy aimed at attracting foreign investment and, to that end, has among other measures, strengthened the institutions respons ible for the promotion of investment. In addition, Nicaragua has 
made good progress on trade facilitation, for instance, by computerizing most custom procedures, 
by implementing a risk assessment system and by organizing regular meeting of the 
Interinstitutional Committee on Trade Facilitation (CIFCO), which is a precious vehicle of 
cooperation between the public and private sectors. 
103. During the period under review, Nicaragua has also attached considerable importance 
to anchor its economy more deeply into the region and to widen its range of partners. With reference 
to the bilateral level, according to the EU statistics, we were the 2
nd major destination of Nicaraguan 
exports in 2010 accounting for 7.4% of  their total exports; besides, th e EU accounted for 3.9% of total 
Nicaraguan imports, ranking 8th among the other partners. According to PRONicaragua statistics on 
FDI flows, the EU was the 2nd largest source of FDI in 2011, am ounting to US$174 million. In fact 
FDI flows originating from the EU increased 260% in  2011 compared to the level of 2010, due to 
significant investment from Spain in particular. 
104. Moreover, Nicaragua benefits of the GSP+ schem e of the EU. Another crucial element in our 
relationship is the EU-Central America Association Agreement that Nicaragua ratified recently, being 
the first of the Central American partners to fina lize the necessary procedures. This Agreement is not 
only a trade agreement but it is funded on two ot her pillars: political dialogue and cooperation. 
The three different parts of the Agreement comple ment each other providing the most important 
added value of this instrument. Th is Agreement is expected to ente r provisionally into force in the 
second quarter of 2013. Its coverage is not limited to  trade in goods and services, but it is extended to 
issues such as investments, intellectual property rights, sanitary and phytosanitary measures, public 
procurement, technical barriers to  trade and regional cooperation. As a consequence, the Agreement is 
expected to contribute to increasing bilateral trad e and investment flows. Furthermore, another 
element to take into consideration in the bilatera l context in general is that the EU has committed 
a foreseen aid contribution of €58.15 million for trade and economic related assistance for the 
period 2007-2013. Furthermore, during the same pe riod the EU has earmarked €67.5 million to 
support regional economic integr ation in Central America. 
105. In spite of the fact that Nicaragua has c ontinued to promote greater openness and reduced 
obstacles to trade, some concerns remain. We have addressed a number of these in detail in our 
advance written questions and I would thus  hereby refer only to few such issues. 
106. Firstly, the EU welcomes the modernization efforts carried out by Nicaragua in the area of 
custom and trade facilitation and encourages Nicara gua to continue in this direction in order 
to streamline custom formalities and reducing clearan ce time in the next years. Moreover, the EU, 
in its advanced questions, asked for further info rmation on the Government intentions to review 
the Custom Law and on the implementation of the mechanisms for electronic exchange with reference 
to the Central American Single Customs Form (FAUCA). WT/TPR/M/274 
Page 22  
 
  107. Secondly, regarding mutual recognition of technical  standards, the EU is interested to better 
understand the interaction between the Nicaragua n registration procedure and Central America 
regional framework context. In particular, the EU wo uld like to get confirmation that, in case of goods 
of foreign origin already registered in a Central American country, there is no need to duplicate the 
procedure in Nicaragua. 
108. In conclusion, the EU acknowledges Nicaragua for the progress it has made since the last 
review on several fronts. The EU encourages Nicar agua to continue with its ongoing efforts 
to facilitate trade, increase investments, and grow its economy in a sustainable way. 
CHILE 
109. Nicaragua enjoys a privileged geographical location.  It is relatively close to Europe and just 
a step away from both North and South America. In other words, the goods and services it produces 
do not have to cover long distances to reach their ma in destinations, which is an objective advantage. 
110. However, it is no use having an advantage if you are unable to use it to your benefit. It is 
therefore interesting to review Nicaragua's trad e policy and verify whether the government reforms 
undertaken during the review period are aimed in that direction. 
111. In fact, Nicaragua has one of the most favourable regulatory frameworks for foreign 
investment that we have ever reviewed at the WTO. It does not apply shareholding restrictions 
and it adheres to the ICSID Convention. This incr eases the legal certainty and predictability of its 
business environment, which undoubtedly helps to attr act greater investment flows to the country. 
112. I would also like to highlight its tariff regime, which, generally speaking, is straightforward, 
transparent and efficient. Particularly noteworth y is the level of sophistication achieved through 
the Central American Tariff tool. This exampl e of regional economic in tegration represents a 
significant step forward for international trade facilitation. 
113. Nevertheless, Nicaragua still faces consid erable social and economic challenges. 
The reduction of the poverty rate (close to 40%), the high dollarization of its economy, and its 
relatively high level of debt are pending issues. In truth, however, Nicaragua has used market forces 
to address these challenges effectively. In other wo rds, it has made social progress through economic 
progress. 
MEXICO 
114. Like most Latin American countries, Nicara gua was affected by the 2009 world financial 
crisis. However, between 2006 and 2011, the Ni caraguan economy's real GDP enjoyed a highly 
respectable average growth rate of 4%. This good performance is the result of a significant increase in 
internal demand and in exports of agricultural prod ucts. Although this growth has helped to improve 
some social indicators, many ch allenges remain. Poverty still affects just over 40% of the population 
and Nicaragua continues to be one of the La tin American countries with the lowest human 
development index. 
115. Although Nicaragua resumed its growth in 2010,  it now faces a number of challenges that 
could slow down its future development: 
 It remains vulnerable to external shocks  due to its heavy dependence on energy from 
abroad and remittances, with the latter accounting for around 12% of GDP. WT/TPR/M/274 
 Page 23 
 
 
   Despite the launch of a number of initiativ es to reduce public debt, which amounts to 
72% of GDP, this debt continues to  place a significant burden on government 
finances. 
 Electricity supply, power cuts, and losses in  the distribution system still constitute a 
barrier to business development. Losses re present around 20.6% of net generation and 
electrification covers only 70% of the c ountry. Nevertheless, we applaud certain 
initiatives that encourage renewable energy  projects and solar energy incentives. 
 Also noteworthy are the high costs faced by importers when using Nicaraguan ports 
and airports, which are among the highest in the world according to the 2012 Global Competitiveness Index published by the World Bank. We would like to know what steps are being taken by the Nicaraguan government to deal with this problem. 
116. Despite the challenges faced by Nicaragua, we  must applaud the economic and commercial 
progress it has made since its last Review in 2006, most notably: 
 The tax reform undertaken in 2009 to broaden the tax base and strengthen tax 
administration. This reform, which elimin ated many of the exemptions in effect, 
enabled tax revenue to increase as a percentage of GDP in 2011. 
 The trade facilitation measures introduced in  2009, including the computerization of 
most customs procedures and the implementation of a risk assessment system based on fixed rules and probabilis tic and random models, have  reduced the number of 
inspections. All these measures have successfully reduced the number of days it takes 
to import a product, which fell from 37 in 2006 to 23 in 2012. 
 Regarding government procurement, the a doption, in 2007 and 2011, of legislation 
that does not contain discriminatory provi sions represents a major step forward in 
regulating and ensuring the transparency of this type of procurement. 
 In the area of property rights, we also appl aud the fact that Nicaragua has introduced 
new legislation and acceded to a number of international agreements in recent years. 
 Lastly, we commend Nicaragua on not increasing its levels of protection during the 
financial crisis or the period leading up to it. 
117. Mexico has maintained close political, cultural and commercial ties with Nicaragua. A deep 
integration Free Trade Agreement, covering goods , services and government procurement, entered 
into force in 1998. This Agreement has boosted trad e between the two nations and increased the value 
of total trade by an average annual rate  of 30%. Thanks to this Agreement, 
Mexico became Nicaragua's fourth largest supp lier in 2011 and was the most important investor 
during the period under review (2006-2012). With a view to enhancing and standardizing the rules 
governing our trade relations with the Central Amer ican region, a Single Agreement between Mexico 
and various Central American countries, including Nicaragua, entered into force in November 2010. 
These new trade rules will undoubtedly further facilitate trade between the two countries. WT/TPR/M/274 
Page 24  
 
  INDIA 
118.  India congratulates Nicaragua on its impressive growth and notable recovery from the global 
financial crisis. Prudent macroec onomic policies have helped Nicara gua cope with many external 
shocks, including the damage caused by hurrican e Felix, the increase in food and oil prices, 
and the international financial crisis. Although GDP contracted by 1.5% in 2009, the economy 
has bounced back to achieve growth rates of 4.5% in 2010 and 4.7% in 2011, driven primarily 
by a strong domestic demand and exports of agricultural products. 
119. We are encouraged to note that this growth h as translated into an improvement in social 
indicators, particularly, in a decrease in the poverty and illiteracy rates. We commend 
the government's National Human Development Pl an with economic growth and poverty reduction 
as its main objectives. However, poverty still remains a challenge, as does the disparity between urban 
and rural areas and the need to create more jobs. Nicaragua also remains vulnerable to external 
shocks, owing to the dependence of its electricity and transport sectors on oil imports. High inflation 
rates are another area receiving government atten tion. As a developing country we understand these 
challenges and wish the government of Nicara gua success in its endeavours to address them. 
120. We welcome Nicaragua's relatively open trade and investment regime, designed to foster 
its integration into the world economy and prom ote an export oriented industrial base through 
establishment of free trade zones. With an averag e MFN tariff of 6.2% and limited use of non-tariff 
measures, Nicaragua's trade in goods increased si gnificantly during 2006 an d 2011, with imports 
and exports growing by 168 and 223%, respectively. 
121. Several factors uphold Nicaragua's potentia l for achieving steady economic growth, 
including its favourable geographic location and it s abundant natural resources. In addition, the 
country's fast growing working age population pr ovides an opportunity for its future economic 
development. We hope Nicaragua will be able to take advantage of these opportunities to continue 
its socio-economic development. 
122. In the WTO, we share Nicaragua's interest in the successful conclusion of the 
Doha Development Agenda. 
123. On the bilateral front, trade between Indi a and Nicaragua has grown from US$30 million 
in 2010-2011 to US$46.73 milli on in 2011-2012 reflecting a growth of 51%. India's main exports 
to Nicaragua comprise pharmaceuticals, cotton, au tomobiles and accessories, iron and steel, rubber 
and rubber products etc., whereas, India's main im ports from Nicaragua include raw hides, skin and 
leather, wood and wooden articles etc. 
124. India set up an IT training centre in Managua in 2008 under an MoU between the two 
governments. After running successfully for three years, the centre was handed over to the Nicaraguan authorities in June 2011.  Both sides recognize the potential to expand 
bilateral cooperation. 
DOMINICAN REPUBLIC 
125. The Dominican Republic not only enjoys close historical ties and bonds of friendship 
with Nicaragua; we are also close trading partne rs thanks to free trade agreements with the 
Central American countries and the CAFTA-DR with these countries and the United States. 
126. On the occasion of this third review of Nicar agua's trade policy, we wish to congratulate 
the Nicaraguan government. As explained in th e WTO Secretariat's report, through prudent 
macroeconomic management this small and vulnerable economy manage d to offset, at a high cost, WT/TPR/M/274 
 Page 25 
 
 
  the impact of negative external shocks dur ing the period under review, thereby addressing 
the international financial crisis  in a very satisfactory manner. 
127. Between the last Trade Policy Review in 2006 and 2011, the economy grew by an average 
annual rate of 4%, with growth rates reaching 4.5% and 4.7% in 2010 and 2011, respectively. 
Inflation rates remained in single digits, except in 2007 and 2008 when the rise in international prices 
of imported food products and fuel  had a strong impact on domestic prices. Economic growth and the 
high percentage of family remittances from abroad, which amount to 12% of GDP  and help to finance 
low-income group consumption, lowered the pove rty rate, although it s till exceeds 40%. Challenges 
also remain in terms of narrowing the differences between urban and rural areas. The Nicaraguan Government's commitment to macroe conomic stability and fiscal balance is reflected 
in the 50% reduction of total government debt in  relation to GDP during the period in question, 
although this debt remains high at 71.8% and will require new rescheduling so that the government 
can free up resources for poverty reduction and physi cal infrastructure improvement programmes that 
will increase the productivity and competitiveness of the country's economy given its low level of 
income per inhabitant (per capita). Nicaragua's ta x burden amounts to 20% of GDP, which is close to 
the Latin American average. 
128. We are pleased to see that while thermal power generation currently represents 
63% of Nicaragua's energy matrix – 50% above th e Central American average – 78% of the matrix 
will rely on domestic renewable energy generation by 2017, which will vastly reduce the country's 
vulnerability to external shocks and improve the st ability of the electricity system, thus eliminating 
one of the main obstacles hindering productive investment. 
129. The reduction of the debt-service burden, a gradual decrease in external sources of 
energy generation, sound policies for promoting expor ts – which have increased at a higher rate than 
imports – and foreign investment policies woul d progressively reduce the balance-of-payments 
current account deficit, enhance the capital acc ount contribution and strengthen external reserves, 
which would in turn give the exchange and monetary  systems greater stability due to the high level of 
dollarization with which the Nica raguan economy functions. This stab ility is important in order to 
achieve a growing flow of low interest rate credit beneficial to the productive sectors. 
130.  Nicaragua has open trade and investment regimes.  No restrictions or conditions are applied to 
foreign investment. In 2011, foreign direct inv estment flows amounting to US$968 million entered 
Nicaragua from 41 countries, almost double the nu mber of countries in 2007. Enormous potential 
remains to be exploited in sectors such as t ourism, agribusiness, mining and renewable energy. 
131. Nicaragua forms part of the Central American Common Market and is therefore close 
to a good demanding market, although its share of total exports to this market fell from 
34.6% to 19.6% during the period under review. Ta riff harmonization between the five members of 
this market already covers 95.7% of tariff lines. The tariff applied by Nicaragua is also relatively low, 
46.4% of tariff lines are duty free, and the average applied MFN tariff is 6.2%, in line with 
WTO-bound tariffs. 
132. We also see that Nicaragua has made progress in the area of trade facilitation 
by computerizing most of its customs procedures and implementing a risk assessment system based on fixed rules. In this light, we urge it to con tinue making the necessary improvements to streamline 
formalities and reduce clearance times. Nicaragua di d not apply any special trade measures during the 
period under review. 
133. During the review period, Nicaragua approved new legislation in the areas of competition 
policy and government procurement, whic h will ensure greater legal certainty. WT/TPR/M/274 
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  134. We note with interest that the services sector  is the most important, with a contribution 
to GDP of 58.4% and a contribution to employment of 55.8% in 2010. The Secretariat's report states that during the period under revi ew, performance in most services activities improved and the relevant 
legislation and regulations were updated. Nicara gua's financial services sector weathered the 2008 
financial crisis well thanks to tight er financial supervision; the insu rance sector is open, and in the 
area of telecommunications, rapid expansion has b een recorded. All this progress has contributed 
enormously to Nicaragua's economic development. 
135. The Dominican Republic asked Nicaragua a num ber of questions concerning the measures 
taken to counteract unfair competition in the inform al sector, the mechanisms applied to streamline 
import clearance formalities, the telecommunications market, and other areas, and are grateful for 
the replies received, which we will study carefully. We can only urge Nicaragua to continue along the 
path of progress and improve its levels of transparency for business and competitiveness and wish 
it much success in this third Trad e Policy Review and in the future. 
PANAMA 
136. Due to our geographical proximity and free trad e agreement, Panama and Nicaragua maintain 
a close trading relationship which continues to grow and evolve. 
137. Our country recognises the progress made by Nicaragua since its last Review in 2006 
and urges it to continue working to make improve ments as regards its commitment levels in certain 
areas of this Organization and its attention to the issues that have been highlighted as of concern 
to the country during this Review. 
138. We would also like to acknowledge the excellent  job done by the delegation in replying 
promptly, efficiently and fully to the question posed  by Panama. The reply has been sent to our capital 
for analysis. 
139. We remain attentive to the development of  the discussion during this Review and wish 
Nicaragua every success in this exercise. 
ECUADOR 
140. The third Trade Policy Review of Nicaragua begins by highlighting the prudent 
macroeconomic management that enabled the country to deal with the impact  of negative external 
shocks between 2006 and 2011 and, on the economic front, address the international financial crisis 
in an acceptable manner. In fact, according to in formation from the WTO Secretariat, Nicaragua 
successfully maintained positive GDP growth rates in four out of the five years leading up to this 
Review, with average growth rates of 4%. Such econom ic factors enabled this sister country to narrow 
the gap between poverty and wealth, reduce illiteracy and improve its population' s standard of living. 
141. Also noteworthy is Nicaragua's active and perm anent participation in regional integration 
processes both at Central American level and within  the framework of the Bolivarian Alliance for the 
Peoples of Our America - Peoples' Trade Treaty (ALBA - TCP), a trade agreement for development signed by Nicaragua, Ecuador, Bolivia, Cuba, Domini ca, Saint Vincent and the Grenadines, Antigua 
and Barbuda, and Venezuela. This  trade agreement differs from fr ee trade agreements in that 
it emphasizes the principle of solidarity as the basis for its implementation and seeks 
complementarity, justice and cooperation betw een its parties in the area of trade. 
142. It should be noted that on 28 November 2012,  Nicaragua ratified the Treaty Establishing 
the Unified Regional Compensation System (SU CRE). This mechanism is used to channel 
international payments resulting from recipr ocal trade operations between its member WT/TPR/M/274 
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  countries: Bolivia, Cuba, Ecuador, Nicaragua and Venezuela. The System is based on the use 
of a virtual currency, "sucre", for transactions so lely between central banks, while local settlements 
(payments to exporters and charges for importers ) are made in the respective local currencies 
of the member countries. This will enable Nicara gua to access a market of 68 million inhabitants 
on fair terms and promote complementarity. 
143. As for the development of its production, the predominance of the agricultural sector 
and monocropping is clear. In fact, this one sect or generates 19% of GDP and accounts for three 
quarters of the goods exports of this sister country. The manufacturing sector, however, also played a significant role in the Nicaraguan economy, amounting to 20% of total GDP, and reflects the development of the value-added food industry. 
144. In the multilateral trading environment, Nicara gua promotes a successful development-based 
conclusion to the Doha Devel opment Agenda negotiations and has supported negotiating proposals 
on agriculture, NAMA and special and differential treatment, some in conjunction with Ecuador. 
We thank Nicaragua for its support. 
145. Nicaragua is nevertheless a small and vulne rable economy that may be severely affected 
by future external shocks, in particular due to  its energy dependence, considerable public debt, 
and dependence on uncertain remittances from workers abroad. 
VENEZUELA 
146. During the period under review, the Nicaraguan econom y was affected by external events that 
limited its potential for growth and brought about various food and energy crises: Hurricane Felix 
in October 2007, continuous extreme weather events , and above all the economic  and financial crisis 
that erupted in 2008. 
147. However, despite these adverse circumstances, we  recognise that Nicaragua made significant 
economic progress during the period under review. This is clear from its record investment figures, an increase in exports, and the progress made in transforming its energy matrix. 
148. We would also like to acknowledge the effo rts made by the Government of National 
Reconciliation and Unity in its tireless quest to erad icate poverty and build a fairer and more unified 
society. The economic growth of recent years has led to a significant improvement in social indicators, notably in the form of reduced poverty and illiteracy rates, in lin e with the United Nations 
Millennium Goals commitment. 
149. During the period under review, the percentage of the population living below the poverty 
line and the extreme poverty line fell substantially in both urban and rural areas. We note in particular 
that labour participation has increased, which ha s favoured the improved distribution of income 
and the growth of consumption. The reports by Nicaragua and the WTO Secretariat contain 
encouraging figures that predict a brighter future for this Central American country. 
150. We wish to emphasize that during this pe riod, Nicaragua and Venezuela exponentially 
strengthened their economic, social and political uni on in a bilateral manner through the signature, 
at the level of Heads of State and Government , of numerous strategic cooperation agreements 
encompassing trade. Our union has also b een strengthened through regional forums 
in a complementary relationship that extends to different areas and benefits both countries. 
151. It should be noted that with a view to overcomi ng the energy crisis that affected every country 
in the world during the period under review, in 2007 both Governments signed an extensive 
cooperation agreement under which Venezuela invest ed 430 million dollars, distributed over various WT/TPR/M/274 
Page 28  
 
  economic and social areas. Of this amount, 340 m illion dollars were assigned to the energy sector and 
channelled through the supply of Venezuelan oil to Nicaragua and the provision of electricity plants 
that produce the 120 megawatts needed to cover th e energy deficit. The agreement also provides 
for the supply of fertilizers and agricultural machiner y. In return, Nicaragua sells black beans, beef 
and cattle to Venezuela. 
152. On the commercial front, trade between the tw o countries is governed by a Partial Scope 
Agreement based on the Montevideo Treaty, unde r which Venezuela unilaterally grants tariff 
preferences to more than 300 products of Nicaraguan origin. 
153. Moreover, Nicaragua and Venezuela are full members of the Peoples' Trade Treaty (TCP) 
within the framework of the Bolivarian Allia nce for the Peoples of Our America (ALBA), 
an economic integration agreement involving the productive and commercial complementarity 
of ALBA member countries. The TCP provides for trade in goods, a payment compensation mechanism, productive and commercia l complementarity, production strategies, and the coordination 
of production policies. 
154. Thanks to this existing framework, foreign di rect investment from Venezuela to Nicaragua 
amounted to US$45 million in 2011, making Venezuela the second largest investor in Nicaragua from 
the Latin American and Caribbean region. 
155. Trade between the two countries has increased exponentially. By way of example 
and according to the Secretariat's report, in 2006 Nicaraguan exports to Venezuela amounted to only 
2 million dollars, while in 201l their value exceeded 300 million dollars. Venezuelan exports 
to Nicaragua amounted to 200 million dollars in 200 6, but exceeded 1,140 million dollars five years 
later. 
156. The Bolivarian Republic of Venezuela shares the vision enshrined in the National Human 
Development Plan implemented by the Governme nt of Nicaragua which emphasizes the need 
to incorporate the concept of "fai r trade" into the world market, recognize the real imbalances between 
countries' economies, and correct the distortions in world markets. 
157. Lastly, we acknowledge Nicaragua's commitment to the multilateral trading system, which it 
has shown by promoting a predictable, stable a nd ever more equitable multilateral trading system 
in which trade flows can increase in an environment that is free of unnecessary barriers, particularly non-tariff barriers, and the Nicaraguan people can atta in greater well-being. Within the framework of 
the Doha Round, and in view of our similarities in the domestic agricultural sector, particularly 
as regards food security and rural development, Nica ragua and Venezuela have worked together in 
the G-33. 
HONDURAS 
158. In the Secretariat's report, we are pleased to note that despite the damage caused by natural 
phenomena, fluctuations in food and oil pri ces and the world financial crisis, Nicaragua 
has maintained a steady growth rate. Prudent macr oeconomic management, thanks to a fiscal policy 
designed to contain the budget deficit, made it possible to achieve positive GDP growth rates. 
159. The Nicaraguan economy's strong performance  during the review period is extremely 
satisfying. According to the Government's report, Nicaragua has made notable economic progress, as shown by record investment figures, the increase in exports, and the progress made in transforming 
the energy generation process. In addition, fore ign direct investment rose to 13.7% of GDP, 
the highest level for 40 years. WT/TPR/M/274 
 Page 29 
 
 
  160. Last year's remittances from the 6 million Nicaraguans living abroad amounted to 
902 million dollars, more than 12% of GDP. According to information gathered by the central banks 
of the Central American isthmus, Nicaraguan remittances have risen by 13.6% this year and are the highest in the region. While remittances are impor tant to our countries, one of our governments' 
greatest challenges is to ensure that they are put to better use for savings and investment purposes. 
161. We agree with Nicaragua that trade among nations  is a key tool in sustainable development 
and makes a vital contribution to alleviating pove rty. We congratulate the Nicaraguan government 
on the measures adopted within the fra mework of its trade policy, which, far from being protectionist, 
have sought to establish a model that makes it po ssible to turn export performance and the benefits 
of international trade into catalysts for e fforts to increase and diversify national output. 
162. Like Nicaragua, Honduras is a firm believer in Central American integration and agrees that 
the further development of the region can only be achieved by working together. Honduras, Nicaragua 
and the other Central American countries have been  part of the Central American Common Market 
since 1961; we have also jointly negotiated a num ber of important free trade agreements. Despite 
economic constraints, interesting initiatives have been introduced to boost and modernize regional 
trade. Key achievements include the entry into fo rce in August 2008 of the Central American Uniform 
Customs Code (CAUCA IV) and its implementing regulations (RECAUCA IV); the amendment of 
the Central American Treaty on Investment and Tr ade in Services; and the Agreement on Mutual 
Assistance and Technical Cooperation between Tax and Customs Administrations. 
163. In February this year, President Lobo trave lled to Managua for a meeting with President 
Ortega with a view to strengthening relations between the two nations. Since the signing of the 
Cartagena de India's Agreement in May last year , joint actions have been promoted to improve 
not only trade but social programmes aimed at reducing poverty. 
MOROCCO 
164. Morocco is pleased to hear about the Nicara guan economy's resistance to natural disasters 
and external shocks, most notably Hurricane Felix , which hit Central America in November 2011 
and cost Nicaragua 6.8% of its GDP in losses and damages. 
165. Nicaragua also managed to resume its growth path following the recession prompted 
by the 2008 international economic  crisis, thanks to continued foreign exchange inflows linked 
to exports, foreign direct investment (FDI) and remittances from migrant workers. 
166. In fact, Nicaragua's foreign trade in goods has risen to US$10.5 billion from US$8.2 billion 
in 2010, an increase of 27.5%, Exports have increased by 28.5%, and imports by 27%. In 2011, this 
type of trade amounted to 144% of GDP. 
167. In 2011, FDI grew by 90.55% and reached 13.3% of GDP, the highest rate in 
Central America. 
168. This investment was aimed at the energy, telecommunications and industrial sectors. 
The latter, which contributed most to economic growth, amounted to 17.4% of GDP in 2011. 
169. Companies in the industrial sector are those which attract most FDI; in 2011, 
226.4 million dollars were invested in such companies. 
170. Remittances from migrant workers amount to 13% of GDP and were valued at 
823 million dollars in 2011. WT/TPR/M/274 
Page 30  
 
  171. Nicaragua has also embarked upon fiscal reform designed to broaden the tax base 
and strengthen tax administration. This has led to  an increase in tax revenues and their percentage 
share of GDP. 
172. Although Nicaragua has undoubtedly made re markable progress, poverty and extreme 
poverty rates remain high (46% and 16% of the popul ation, respectively, in 2011, UNDP). In 2011, 
per capita GDP stood at US$1,239 on the basis of GDP of US$7,200 million. 
173. We therefore encourage Nicaragua to implemen t and deepen the social reforms that seek 
to steadily reduce poverty, promote job creation, and ensure greater fairness by improving poor people's access to the benefits of growth. 
174. My delegation wishes to highlight Nicaragua's  active participation in bilateral trade 
agreements with various countries and in region al agreements within the framework of the 
Central American Integration System (SICA) and the Association of Caribbean States (ACS). 
175. The Nicaraguan government has also adopted a trade diversification policy, as reflected 
by the recent signature, on 29 June 2012 in Tegucig alpa, of the Association Agreement between the 
European Union and Central America. 
176. Nicaragua is also firmly committed to the multila teral trading system and trade liberalization 
within the WTO framework. 
177. By strengthening its trade relations and di versifying its partners, Nicaragua seeks 
to participate in a way that promotes the multilateral trading system. 
CUBA 
178. We consider this to be an excellent mome nt for Nicaragua's third Trade Policy Review. 
Just a year after the ruling party (FSLN) won th e presidential elections in November 2011, this 
political power has taken over the majority of munici palities, in clear response to the social, political 
and economic policies of that government. 
179. Nicaragua's current government reports a strong economic performance. All this despite being 
a poor nation, a victim of the legacy of erroneous neo-liberal policies that forced the country down a 
difficult economic, political and social path for more than 17 years. Cuba has witnessed 
the implementation of programmes and policies that resurrect a number of very important values benefiting public health, education and welfare.  In this respect, I would like to highlight 
the following: 
 The new economic development model, wh ich has allowed for a steady increase in 
exports, the reduction of pove rty and inequality levels, and a significant improvement 
in the country's social indicators. 
 The further development of productive and services sectors such as tourism and 
investment. 
 Public safety and legal certa inty for conducting business. 
 New government-backed infrastructure projects in various sectors. 
 A fiscal policy designed to contain the budgetary deficit. WT/TPR/M/274 
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  180. Nicaragua is also a standard-bearer in th e fight against drugs and international drug 
trafficking. Due to its geographical location, the c ountry is a gateway to the world's largest consumer 
market. With few resources, it has achieved the best results in Central America in terms of safety, a 
fact acknowledged by neighbouring countries, despite  the limited financial support that is necessary 
for such a difficult undertaking. 
181. It is important to remember that the current  government inherited a dark city, one with 
frequent power cuts that not only prevented its development, but made life impossible given the 
climatic reality of a volcanic country where temp eratures exceed 40 degrees. The policies applied in 
the 2006-2011 period reflect the execution of major works and projects relating to the installation of new capacities for electricity genera tion which seek to remedy the prev ious situation. Nicaragua has 
also launched ambitious programmes involving the use of wind power to produce electricity. 
182. We should not overlook the fact that Nicaragua has been hard hit by floods and other weather 
events that have delayed its development plans,  causing economic losses and the loss of human lives. 
183. Recent reports, however, confirm that the Nicaraguan economy has addressed 
the international financial crisis in a relatively satisfactory manner, maintaining positive GDP growth 
rates. This is largely due to prudent macroeconom ic management that has enabled it to offset 
the impact of negative external shocks. 
184. Agriculture has also grown in recent y ears, providing a livelihood for almost 43% 
of the population. Climatic conditions, however , are still key determinants which often have 
a negative impact on the sector's performance. 
185. Several factors sustain Nicaragua's poten tial for achieving steady economic growth. 
The country enjoys a favourable geographical lo cation and abundant natu ral resources, and its 
population dynamics mean it has a fast-growing working-age population. 
186. In 2011, the current Government of Nicaragua finalized the country's accession to the 
Latin American Integration Association (LAIA). The requisite study of the country's economic 
performance showed positive results  that supported its accession to this regional integration body. 
187. Like Cuba, Nicaragua is a member of the Bo livarian Alliance for the Peoples of Our America 
(ALBA). This is an integration project based on complementarity and cooperation, the members 
of which promote the negotiation and signing of the People's Trade Agreement (ALBA-TCP). 
188. Nicaragua can continue to re ly on Cuba's support and solidarity as it addresses inherited 
structural difficulties and moves towards sust ainable development and a better future for 
its population. 
ARGENTINA 
189. We are pleased to hear that the Nicaraguan ec onomy is back on the path to growth after the 
international financial crisis, the effects of which were most strongly felt in 2009, achieving growth 
rates of 4.5% and 4.7% in 2010 and 2011, respec tively, which are even hi gher than those in the 
pre-crisis period. Our attention was also drawn by the notable increase in foreign direct investment 
in 2011, which rose to 13.3% of the country's GDP . These are all signs that things are being done 
well; even poverty and illiteracy rates have fallen. 
190. Nevertheless, as indicated in the Secretaria t's report, some significant challenges still 
lie ahead. The poverty rate still exceeds 40% and di sparities between urban and rural areas continue 
to be significant. WT/TPR/M/274 
Page 32  
 
  191. As with most developing and least-developed countries, good agricultural development is one 
of the fundamental pillars for successf ully meeting all these challenges. 
192. It is clear from the Secretariat's report that th e agricultural sector has been largely responsible 
for Nicaragua's economic growth in recent years and is of key importance to the Nicaraguan economy 
as it helps to generate close to 19% of GDP, am ounts to almost 77% of goods exports, employs one 
third of the labour force and provides a livelihood for almost 43% of the population. 
193. Creating an environment conducive to the furthe r development of this sector, which implies 
the greater use of technology, more training, dive rsification, greater value added and, of course, 
the further opening up of intern ational markets, would therefor e seem the best route to follow 
to ensure greater economic growth and further reduce poverty. 
194. We therefore encourage Nicaragua to continue its efforts to deepen the integration process 
within the framework of the Central American  Common Market and we join it in calling for 
a successful conclusion to the Doha Round. As th e Nicaraguan Government itself mentions in its 
report, such a conclusion should mean the further op ening up of international markets to agricultural 
trade, the elimination of non-tariff barriers and al l forms of export subsidies, and a substantial 
reduction in trade-distorting domestic support in the agricultural sector. 
195. Trade policies such as those mentioned have been the main disin centives to agricultural 
investment and development in vast areas, i nhibiting development and condemning the most 
vulnerable populations to poverty and hunger. 
196. In other words, according to the Governme nt's report, a successful conclusion to 
the Doha Round that is consistent with the Round' s mandate would make it more feasible for this 
country to meet one of its main objectives - one undoubtedly shared by the majority of developing 
countries - which is that trade relations "are c onducted within the framework of fair, competitive 
trade". In this way, it would be much easier to gr ow at an increased rate, thereby reducing the high 
poverty rate even further. 
GUATEMALA 
197. Nicaragua, our Central American brother, is one of our most important partners, not only 
in terms of trade, but from a fraternal, soci al, cultural, political and economic viewpoint. 
Our countries are united by hundreds of years of history and every day we make a joint effort to firmly consolidate the Central American integra tion process with a view to ensuring economic and 
social development that will improve the quality of life of our people. 
198. We are therefore pleased to see that Nicaragua made notable economic progress during 
the review period, as reflected in record investme nt figures, the increase in exports, and the progress 
made in transforming the energy generation process. 
199. Nicaragua is a nation of fighters. This is clear  from the fact that it achieved economic growth 
rates of 4.5% in 2010 and 4.7% in 2011 despite the effects of the world economic crisis and various natural disasters such as Hurricane Felix. Of course, reducing the poverty rate (which in Nicaragua's 
case is still above 40%) remains an important challenge, as it does in many of our countries. 
200. We are also pleased to see that the public sector  deficit as a percentage of GDP fell by half 
from 3.8% of GDP in 2006 to 1.7% in 2011. This was partly due to an increase in tax revenue, despite 
the reduction of import tariffs and VAT on commodities to deal with inflation. WT/TPR/M/274 
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  201. We note, however, that in 2012, Nicaragua no tified the WTO that it had not granted any 
subsidy within the meaning of the Agreement on Subsidies and Countervailing Measures and that 
neither had it granted any export subsidies with in the meaning of the Agreement on Agriculture. 
We also note, in particular, the existence of free zones and the temporary admission for inward 
processing and export facilitation regimes, under whic h Nicaragua grants various customs duty and 
tax reductions and exemptions. 
202. Generally speaking, although Nicaragua faces significant challenges in terms of improving 
transparency, facilitating trade and reducing poverty, etc., we recognize its efforts and the significant 
progress made in areas such as attracting and protecting foreign and private investment; the increase in telecommunications coverage and services; the expansion of financial services; and the 
modernization of the energy matrix. We hope th at these efforts progressively achieve the desired 
objectives and that we will continue to see Ni caragua improving day by day, as we do now. 
BARBADOS 
203. Barbados commends the Government of Nicara gua on its stable economic performance since 
its second trade policy review. Nicaragua emerged fro m the global financial crisis, effects of the 
increase in oil and food prices and the impact of a category 5 hurricane, relatively well. Its strong, 
prudent macroeconomic management  over the period of review has contributed to positive and 
steady GDP growth except in 2009 wh en the GDP growth rate it declined by 1.5%. It is projected that 
the upward trend in GDP growth will slow slightly going into 2012 and 2013 with growth of 3.7% 
and 4% respectively. 
204. Like many other countries, Nicaragua has s ought to weather the economic crisis through 
fiscal and macroeconomic reforms. Nicaragua re duced import taxes and Value Added Taxes (VAT) 
on a number of products so as to reduce the infla tionary pressures and enhance its tax base. These 
reforms have had relative success. As a result, the country has experienced increasing amounts in tax 
revenues which have in turn assisted in fuellin g domestic consumption,  reducing the dependence 
on remittances and reduc ing poverty rates. 
205. Since its last review, Nicaragua has increased  its exports by 223% and imports by 168%. 
Though exports continued to grow at a faster rate  than imports, the value of imports far exceeded 
exports throughout the review period. The in crease in exports in excess of 200% should 
be commended. 
206. My delegation notes with interest Nicaragua 's emphasis on attracting both domestic and 
foreign direct investment through the promotion of  and liberal investment provisions and a stable 
legal framework. They have made concerted effo rts to improve telecommunications, electricity 
generation and oil refining. They ha ve also taken concrete steps to streamline investor procedures for 
business start-up and e-regulations. We also note the surge in the number of countries investing in Nicaragua. Over the review period, FDI inflows increased from 22 countries in 2007 to 41 countries in 2011. However, Nicaragua realizes th at despite the increases in investment flows they 
have not reached their full potentia l. Barbados encourages Nicaragua to develop the proposed national 
investment attraction policy as it seeks to further expand FDI, promote job-creation and transfer technology. 
207. It has been recognized that developing countri es are still to be fully integrated into the 
multilateral trading system. This was one of the key motivators in the launch of the "Doha Development Round" in 2001. Further, Ministers at the 8
th Ministerial conference in 2011 
reiterated the need to identify trade-related issues fo r the fuller integration of small economies into the 
multilateral trading system. To this end, small ec onomies have continued to engage in the various 
aspects of the WTO with the aim to assist in th is regard. As a, a small vulnerable economy like WT/TPR/M/274 
Page 34  
 
  Nicaragua, Barbados can therefore relate that country 's trade policy goal of further integrating into the 
multilateral trading system. 
208. Nicaragua has negotiated a number of regiona l trade agreements and bilateral trade 
agreements as it seeks to expand the market share for its exports. Together  with its sub-regional 
counterparts in Central America, Nicaragua has em barked on achieving a high level of integration, 
harmonisation and interdependence through th e Central American Common Market (CACM). 
209. In a world of vast networks of regional trad e agreements, bilateral trade agreements and 
bilateral investment treaties, benefits derived by the average developing country are below the 
desirable level. However, Nicaragua has inv ested US$10 million to implement the four year 
Foreign Trade Management Strengthening and Ex ploitation Programme which among other things 
seeks to help take advantage of the trade and i nvestment opportunities arising from new and existing 
trade agreements signed by the country. 
210. At the multilateral level, Nicaragua has enhanced  its negotiation leverage through formulating 
negotiating positions with like-minded groups of  countries for example SVEs and G-33, and has 
submitted a number of proposals in agriculture and NAMA, rules and intellectual property. 
This, amongst other things, demonstrates Nicaragua 's commitment and dedication to the multilateral 
trading system. 
211. Despite these positive advances, there is still more work to be done, in particular in the areas 
of further reductions of poverty, decreasing the disparity between urban and rural communities and 
expanding investment in the country. Continued diligence in socio-economic planning and management is therefore required. The formula tion of trade policies and national development 
policies in accordance with its de velopmental needs should aim at the successful pursuit of economic 
reform and developmental objec tives. Nicaragua's National Human Development Plan 2009-2011 
is pivotal to realizing its economic growth a nd poverty reduction objectives. In this regard, 
my delegation wishes the Government of Nicara gua well in its updated iteration of its Plan 
through 2012- 2016. WT/TPR/M/274 
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  V. REPLIES BY THE REPRESENTATIVE OF NICARAGUA AND ADDITIONAL 
COMMENTS 
212. Today, Nicaragua's main challenge is to overcome underdevelopment, which is expressed 
in poverty and hunger. Our government's policies an d projects are devised for this purpose and their 
results are plain to see in the indicators that  show economic stability, increased exports, and 
a reduction in poverty and extreme poverty levels. 
213. The debt and current account deficit are speci fic characteristics of underdevelopment which 
can only be overcome in the medium and long term . In the meantime, this deficit is covered 
by official and private capital movements. 
214. Our way of meeting this challenge is not to restrict economic activity or establish control 
mechanisms, but to expand this activity and ad opt policies to transform the productive sectors and 
trade and increase social participation. 
215. With a small domestic market, Nicaragua cannot develop in isolation, but through improved 
participation in world trade, with ever fairer ru les that support the efforts of small developing 
economies. 
216. We have improved access to new markets fo r our products through a network of trade 
and economic agreements and are now making effo rts to benefit fully from these agreements and 
increase and diversify production. 
217. In response to the questions concerning trade policy, we wish to mention the following: 
218. With regard to notification commitments concer ning the licences required in certain sectors, 
Nicaragua will catch up on outstanding notifications  and continue to comply with WTO procedures. 
219. As regards trade facilitation, the Government, aware of the need to improve foreign trade 
procedures, is promoting modernization and simp lification work, in conjunction with the private 
sector, to improve procedures and reduce unnecessar y formalities and requirements, with a view 
to facilitating foreign trade operations. 
220. Nicaragua is setting up a Single Foreign Trade Window, which will reduce the time and costs 
involved in processing permits and licences require d for the importation, exportation or transit 
of goods, through the efficient use of informat ion technologies, interoperability with existing 
institutional systems, the simplification of procedur es, and the integration of requirements and data. 
221. Nicaragua is making progress in establishing best customs practices, with a view to, 
inter alia , enhancing risk management, promoting the programmes of authorized economic operators, 
promoting systems for the electronic processing of documents, customs and tax interconnection, and 
using non-intrusive and non-invasive mon itoring and inspection equipment in goods 
clearance procedures. 
222. The goods import services tax (TSIM) aims to cover the costs incurred by customs for 
providing its services to importing economic operators . It is currently being reviewed and may 
be discontinued. It should be noted that provisions  for its elimination have been introduced into 
existing trade agreements between Nicaragua and its trading partners and that around 
80% of Nicaragua's total imports are exempt from this tax. 
223. Mutual recognition of technical standards takes place under the general standards and 
principles of equivalence established in internationa l trade rules. In the specific case of recognition WT/TPR/M/274 
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  of registration in Central America, certain agreem ents allow for the recognition of such registration 
for food products and medicines for human and ve terinary use. This means that if a product 
is registered in a country in the region, that re gistration is automatically recognized in the other 
countries, thus reducing costs and formalities for eco nomic operators. Some existing trade agreements 
contain similar provisions that enable us to gran t comparable treatment in accordance with certain 
parameters, such as harmonized import re quirements and compliance with respective 
internal procedures. 
224. The tariff policy applied by Nicaragua is admi nistered in accordance with the Convention on 
the Central American Tariff and Customs Regime, Re solutions issued by its bodies, and multilateral 
tariff commitments. Adjustments are being made wi thin the framework of the updating and adoption 
of the Harmonized Commodity Description and C oding System (Harmonized System), which has 
resulted in tariff lines increasing from 6,528 in 2005 to 7,359 in 2012. In accordance with the tariff 
policy applicable in Central America, in some  cases import duties have also been modified, 
generating a slight increase in the average MFN tariff. 
225. In order to enhance the competitiveness of re gional production, Central America is currently 
revising a list of goods with a view to rationalizi ng the tariff. Following this exercise, the average 
MFN tariff level may be lower than that  recorded for the period under review. 
226. With regard to property, legal certainty in Ni caragua is provided for under Article 44 of the 
Constitution, which clearly establishes that: "The  right of private ownership of movable and 
immovable property and of the instruments and means of production is guaranteed". 
227. Since 2007, our Government has been strengthe ning legislation on property registration and 
the legal framework; it also provides information and advice to investors, thus facilitating access 
to various legal and dispute settlement mechanisms. 
228. Regarding services, Nicaragua has participat ed actively in the multilateral negotiating 
process. In 2005, it presented an improved offer, wh ich extends the bindings made in the previous 
Round. Consultations are currently being held with  the sectors on possible changes and inclusions 
with a view to the further improvement of our offe r, however, it will be necessary to take into account 
the progress made and state of play in the Doha Roun d negotiations. It should be noted that at bilateral 
level we have achieved significan t openings thanks to the CAFTA- DR and other agreements, under 
which we have also received similar and recipro cal openings, both for investment and the supply 
of services. 
229. 80% of Nicaragua's total trade is subject to tariff preferences, negotiated under existing trade 
agreements. We hope to increase this percentage in  the next few years by negotiating new agreements 
with trading partners in South America, the Caribb ean, South East Asia and Eastern Europe. We also 
hope to conclude the negotiation of th e free trade agreement with Canada. 
230. We are open to the multilateralization of existi ng bilateral trade agreements. We are aware 
that our regional obligations oblige us to take this  route together with our Central American trading 
partners. A multilateral concession is granted on the basis of obtaining reciprocity and within the 
framework of negotiations in the appropriate forum. 
231. Regarding international maritime transport and pursuant to our relevant legislation, 
international traffic is open to all ship-owners a nd all merchant vessels regardless of their nationality 
and flag, without any conditions and restrictions ot her than those established in that legislation and 
without prejudice to compliance with rules on public order, maritime safety and prevention 
of pollution of the marine environment. WT/TPR/M/274 
 Page 37 
 
 
  232. The operation and exploitation of merchant domestic  traffic and cabotage vessels is restricted 
to Nicaraguan-registered ships operated by Ni caraguan shipowners. Ho wever, under conditions 
of reciprocity, Nicaraguan shipowners may use vessels flagged to any other Central American country. 
233. The Directorate-General of Water Transport (DGTA) at the Ministry of Transport and 
Infrastructure may permit Nicaraguan shipowne rs to use foreign vessels for this service 
on a temporary basis if no Nicaraguan or Central Ameri can vessel is available or able to provide this 
service, in accordance with the technical conditions or time required therefor. Where no Nicaraguan shipowners are interested, the DGTA may grant pe rmits to foreign shipping companies to provide 
this service. 
234. The aim of Nicaragua's economic policy will cont inue to be to advance economic and social 
development by preserving a stable macroeconomic framework that stimulates national and foreign private investment, public investment, an entreprene urial spirit, and production and productivity with 
a view to generating further economic growth, with  greater social benefits for the poorest sectors 
of the population, and reducing inequalities, su ch as the existing disparity between urban and 
rural areas. 
235. The macroeconomic policy will remain structured  in such a way as to  ensure the stability 
of the goods and services and financial markets and the lowest possible inflation rate, with a view 
to eradicating poverty. 
236. The government's social policy prioritizes seven areas to reduce poverty and support 
economic growth: food security, education, health, drinking water and sanitation, social housing, 
social security, and labour policy. 
237. Nicaragua's trade policy includes a number of instruments to control inflation: 
238. In the short term, preannounced currency depreciation as a nominal anchor for price 
formation in the economy. 
239. To deal with hydrocarbon price pressures, el ectricity tariff subsidies have been used 
for families consuming up to 125 kilowatt-hours per month. 
240. Subsidies are also granted for public trans port in the city of Managua with a view 
to safeguarding the population's purchasing power. 
241. To deal with the pressures of the rise in  food prices, Nicaragua has applied the policy 
of reducing basic basket duties and taxes. 
242. In the longer term, the policy on credit for sma ll and medium-sized agricultural producers and 
the provision of improved seeds, fertilizers and technical assistance are ensuring productivity in the 
agricultural sector and compliance with f ood security and sove reignty objectives. 
243. Regarding government debt, Nicaragua is a me mber of the Heavily Indebted Poor Countries 
Initiative (HIPC) which establishes that debt as a percentage of GDP will gradually diminish. 
This commitment, which has been very strictly honoured, forms part of our agreements with the 
International Monetary Fund. In 2006, the debt amounted to 112% of GDP and in 2011, 71.8%. 
244. The General Law on Government Debt, Law No. 477  of 2003, regulates the government debt 
process, controls debt levels and establishes that new loans may be taken out  only to fund expenses 
the payment of which is provided for in the General Budget Law of the year corresponding to that WT/TPR/M/274 
Page 38  
 
  in which the loans are taken out, in the short term; or centrally approved by the Ministry of Finance 
and Public Credit, in the medium and long term. 
245. One of the objectives established in the govern ment's plan is to ensure the prudent 
management of the public deficit within a framewo rk of medium and long-term fiscal sustainability, 
in accordance with macroeconomic stability. There should be guaranteed financing for increases in 
expenditure and permanent financ ing for recurrent expenditure. 
246. Nicaragua has seen a steady increase in remitta nces from abroad. In 2011 they amounted 
to US$ 905.1 million, an increase of 29.8% in rela tion to 2006 when they stood at US$ 697.5 million. 
We are aware of the risks and are gradually substituti ng remittances with more stable income, through 
increased production, exports, tourism receipts and employment generation. 
247. In 2011, the oil import bill amounted to 24% of CIF imports. As already explained, Nicaragua 
is currently promoting a shift in the energy matrix  towards renewable sources. In 2007, 20% of energy 
was derived from renewable resources; by 2013, 50 % of energy generated will be renewable; by 
2017, 80% of our energy will be renewable, whic h will substantially reduce our reliance on oil. 
248. As regards increasing and diversifying exports in  order to take advantage of trade openings, 
the country is set on enhancing its productive capaci ty by optimizing the resources of each territory. 
In various municipalities, the central governme nt, in conjunction with local governments, 
is promoting the creation of new companies linked to  the existence of raw materials and local human 
resource capacities. 
249. Programmes to support the production and e xport efforts of small and medium-sized 
enterprises are promoted in agreement with the private sector, in particular SME organizations. 
250. Nicaragua, with support from every sector, has also pursued a foreign investment promotion 
policy on the basis of its climate of peace, public saf ety, and macroeconomic and social stability, with 
a sound regulatory framework consistent with multilate ral disciplines, which constitutes a platform for 
developing trade. 
251. In recent years we have seen the results that  can be achieved through a nation's efforts 
to transform society. 
252. We have identified a number of important infrastructural projects that will enable us to move 
forward and profoundly transform the country. Key projects include the following: 
253. The start of the construction of the "Supremo Sueño de Bolívar" industrial complex, which 
will include a fuel storage and distribution plant,  a liquefied gas filling plant, an oil refinery, 
an inter-oceanic pipeline and a petrochemical industrial complex. 
254. Nicaragua's National Assembly has approve d Law No. 800, "Law establishing the legal 
regime for the Great Inter-oceanic Canal of Nicar agua and the Great Inter-Oceanic Canal Authority 
of Nicaragua", published in the Official Journal La Gaceta  of 9 July 2012. This Law establishes the 
legal regime for the Great Inter-Oceanic Canal of Nicaragua and the body named the 
Great Inter-Oceanic Canal Authority of Nicaragua. A feasibility study is cu rrently being conducted 
for the construction of the Great Canal, wh ich is the most strategic project for the 
country's development. 
255. In addition to these two large-scale projects, investments have been made with a view 
to modifying the energy matrix and lowering energy  costs, all of which will increase the country's 
competitiveness and even enable us to export renewable energy. WT/TPR/M/274 
 Page 39 
 
 
  256. Considerable investment is also being made in the tourism, telecommunications, agribusiness, 
mining, fisheries and aquaculture sectors, amongst others. 
257. We are satisfied with the depth and quality of each  of your questions and view them as a sign 
of interest and desire to contribute to  the efforts being made by Nicaragua. 
258. I wish to reiterate my personal commitment and the commitment of the 
Government of National Reconcilia tion and Unity to strengthening the multilateral trading system. 
We view this as a sine qua non -condition for increasing exports, strengthening small enterprises and 
achieving our overriding objectives which are to improve the standard of living of the Nicaraguan people, build a more cohesive and fairer  society, and eliminate poverty for the 44% of the 
population currently living in this situation. 
259. A unified country, meeting strategic objectives,  fills us with optimism and hope as a people. 
260. As Rubén Darío, our Nicaraguan and Latin American poet, said "we mustn't let our 
enthusiasm, a virtue as valuable as it is necessary, be dampened; always work, aspire, aim towards 
something higher". 
DISCUSSANT 
261. Almost all the delegations that spoke the day before yesterday praised Nicaragua's 
macroeconomic management during the review peri od and urged it to continue on the same path. 
Moreover, each and every one of their statements recognized that the country has an economy open to 
trade, with a high level of protection of foreign investment; that it has improved the rules facilitating 
the free flow of goods and services, including those that promote competition; that in practice it does 
not grant subsidies within the meaning of the agr eements covered by the WTO; and that it does not 
use trade defence measures. The general view held by Members is that Nicaragua is a partner that 
complies with the rules and disciplines of the WTO. 
262. There were a number of areas of concern. These can be grouped into two categories: (i) issues 
requiring attention; and (ii) more substantive or st ructural issues, which form the basis of sustained 
development in its broadest sense. 
Issues of special interest requiring improvement 
263. A number of countries felt that Nicaragua should improve its business environment and 
thereby enhance its competitiveness. In this respect , it should further liberalize services, optimize the 
customs management system in general, and reduce costs for the use of ports and airports. While Nicaragua welcomes foreign investment, it was felt th at the rules to protect ownership of investment 
already made were inadequate and should be im proved. Other weaknesses mentioned included the 
energy situation and budgetary imbalance. 
Structural issues 
264. These are issues where the virtues of good macroeconomic management and free trade are 
necessary but not sufficient. At least three of these issues should be noted: 
 Social issues. The country's levels of  poverty and extreme poverty were widely 
referred to by many delegates. All of them called for intensified efforts to reduce the 
current rates. Although I am sure the Govern ment of Nicaragua shares this concern, 
we know that this is something easier said than done. There was agreement that in 
this respect the country is making a serious effort and heading in the right direction. WT/TPR/M/274 
Page 40  
 
  One delegation noted that "Nicaragua has used market forces to meet these 
challenges"; in other words, it has made social progress through economic progress. 
 Integration. The Central American process was mentioned in a number of ways. 
To me it is clear that the Central American Common Market is one of the most successful integration processes in the worl d. Almost 100% of the customs tariff is 
unified under the Central American Uniform Customs Code (CAUCA), version 4 of 
which is currently in effect. It also has strong disciplines covering the entire range of 
trade and investment issues: rules of origin, common rules on transport, telecommunications, services, a sophisticated administration system, regulations concerning sanitary and phytosanitary measures, unfair practices, safeguards, a dispute settlement system, etc. In this r espect, comments were made on the possible 
duplication of procedures at regional and national levels. 
 Good governance. Transparency, the concep t of the rule of law, "accountability", 
private property protection and political predictability are, perhaps, the factors with the greatest impact on sustainable development processes. At least that is the view of the majority of historians and thinkers . To this, we must add the notion of 
State policies. We may have splendid short- term economic, trade and social policies, 
yet if they are not combined with the notion of State, which transcends a term of 
government, the truth is that they will cons titute nothing more than intentions or, as 
the song says, be like the wake left by a ship at sea. 
265. Lastly, I have to make a confession. Yesterday, I re-read the presentations made by Members 
last Tuesday. While doing so, I enjoyed one of my  favourite cigars, a "Jewel of Nicaragua" of the 
"Celebration" series. When I had finished reading, I concluded that the title of this Review could well 
be the name of that cigar, but the other way ro und. Instead of "Jewel of Nicaragua", it could 
be "Nicaragua is a Jewel", as this is what the count ry is in terms of WTO principles and rules. While 
it may not be a pure and unblemished diamond, it is much more valuable than many initially thought. WT/TPR/M/274 
 Page 41 
 
 
  VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
266. This third Trade Policy Review of Nicaragua has improved our understanding of the trade and 
investment policies and practices of Nicaragua, of how they have evolved since the previous Review 
in 2006 and of their outlook. Areas have been hi ghlighted where significant progress has been made, 
as well as those where there is room for improvement . We are grateful for the active participation 
of the Nicaraguan delegation, led by H.E. Mr Orlando Solórzano, Minister of Development, 
Industry and Trade. We also thank Ambassador Ca rlos Robelo Raffone, Permanent Representative 
of Nicaragua to the WTO, and the other members of the Nicaraguan delegation. Our discussions have 
been equally enriched by the insightful comment s of the discussant, Ambassador Mario Matus, and 
by the numerous statements of Members. The timely and detailed answers provided by the 
Nicaraguan authorities to the questions submitted in advance were appreciated by Members. 
267. Members congratulated Nicaragua on its sound  economic performance during most of the 
period under review, as reflected by annual GDP  growth averaging 4% between 2007 and 2011, 
despite the adverse external shocks to the Nicar aguan economy, such as the international financial 
crisis, Hurricane Felix and the increase in food a nd petroleum prices. Members also welcomed the 
fact that Nicaragua had refrained from using protec tionist measures to overcome the negative impact 
of these shocks. It was further emphasized that rapid economic growth had improved social indicators, particularly in terms of poverty reduction,  but that poverty levels remained high, calling for 
subsequent programmes to ensure their continuing decline. 
268. It was pointed out that the good performance of Nicaragua's economy was underpinned 
by effective implementation of macroeconomic polic ies, including a far reaching tax reform. There 
had also been a rapid increase in foreign trade a nd foreign investment flows. Nonetheless, excessive 
reliance on remittances from abroad to finance the de ficit in the balance of payments current account 
was also noted, as was the still high level of external debt. 
269. Members appreciated Nicaragua's active participation in the WTO and its commitment 
to strengthening the multilateral trading system. At the same time, they  recognized Nicaragua's 
endeavours to advance the process of Central Am erican regional integration and encouraged 
it to continue moving along that path. They also  acknowledged Nicaragua's efforts to implement its 
obligations under the free trade agreements to wh ich it was party, which involved major legal and 
institutional changes; in that connection, Member s noted the positive effects on trade flows that 
ensued from signing those agreemen ts, especially the CAFTA-DR. 
270. Members praised the openness of Nicaragua's tr ade and investment regime, as evidenced by 
the country's relatively low average tariff, lim ited use of non-tariff measures, and a favourable 
investment environment, which included the granti ng of national treatment to foreign investors. 
Members welcomed with satisfaction the legal and institutional reforms that Nicaragua had 
undertaken to support trade and investment and im prove its business climate. The reforms included 
the adoption of a new competition law, the progr ess made in modernizing customs and facilitating 
international trade, and the adoption of ne w government procurement legislation devoid 
of discriminatory provisions. 
271. At the same time, Members identified certain aspects of the Nicaraguan trade regime that 
might be amenable to improvement and urged Nicaragua to take further steps in that direction. These 
concerns relate chiefly to the following aspects, and I would stress that we have taken careful note 
of this morning's very detailed statement by Minister Solórzano. 
 With respect to the foreign investment regime, 
Members acknowledged that it was 
extremely open but expressed some concern about foreign investment registration and 
protection mechanisms. Nicaragua responded that the legal framework had remained WT/TPR/M/274 
Page 42  
 
  stable during the period under review and that investment and business environment 
guarantees were enshrined in the Constitution. 
 
 Regarding customs procedures , Members noted the progress made in the reforms 
implemented by Nicaragua since the previous Review in order to facilitate trade, 
including the adoption of a risk assessment system, the streamlining and automation 
of customs procedures, and the reduction in clearance time. However, they also noted 
that work remained to be done in that area, especially in order to cut down on inspections and clearance time, and they urge d Nicaragua to continue on the path to 
reform. Members asked questions concerni ng the measures envisaged to facilitate 
trade and streamline customs formalities. Nicaragua responded that plans had been 
drawn up with a view to modernization and joint work with the private sector, that the 
programme aimed at developing the singl e window for foreign trade would reduce 
the length and costs of customs procedures, and that the ongoing development of customs best practices would lead to more effective risk management. 
 
 On the subject of tariffs and other import duties, Members had questions 
regarding the slight increase in the averag e MFN tariff as compared to that reported 
during the previous Review and inquired about  the justification for the import service 
fee. Nicaragua replied that the increase did not concern tariff levels but the number of tariff lines due to the implementation of amendments to the Harmonized System. 
Nicaragua informed Members that the import service fee was currently under review. 
 
 Members urged Nicaragua to provide its outstanding notifications concerning import 
licences and prohibitions , and welcomed Minister Solórzano's announcement that 
morning that Nicaragua would bring its notifications up to date. 
 
 Regarding electricity and energy, Nicaragua was urged to continue to improve 
infrastructure and promote the use of renewable energy, as well as to reduce its dependency on oil. We are pleased to not e Minister Solórzano's comment that 
Nicaragua's plans include achieving 80% use of renewable energy by 2017.  
 
 As regards services  in general, Members urged Nicar agua to expand the coverage of 
its GATS offer. 
 272. This successfully concludes the third Review of Nicaragua. The numbe r and detailed nature 
of the questions put forward and the informed inte rventions of participants in the discussions are a 
reflection of Members' interest in Nicaragua's trade policies and practices. This is a country that takes 
a pragmatic and far-sighted approach as it implemen ts an open trade and investment regime that 
brings noticeable benefits. It therefore deserv es encouragement and support from WTO Members. 
Once again, I thank the delegation of Nicaragua fo r its timely and detailed responses, the discussant 
and Members for their significant contributions, the Secretariat for its invaluable support in preparing 
this Review, and, as is customary,  the interpreters for their work. 
__________