Exportadores de Centroamérica, Contenedores, Nicaragua sale del cafta

Why the United States is Ortega’s best trading partner

In his diatribes against imperialism and the United States, the Nicaraguan dictator Daniel Ortega hides an important detail: that country has been, during his 15 years in office, the main destination for Nicaraguan exports.

When Ortega returned to power, in 2007, Nicaragua exported some 366.1 million dollars to the United States, a figure that —until last September— had almost quadrupled: 1,421.5 million dollars, according to data from the Center for Export Procedures (Cetrex).

These data do not include exports under the free zone regime, which enjoy greater tax and customs incentives by the Free Trade Agreement between the United States, Central America and the Dominican Republic (DR-Cafta).

In 2007, sales to the United States represented 29.6% of total Nicaraguan exports; Until last September, they reached 45.41%. No other country exceeds a double-digit percentage. Only El Salvador is close to 10%, with 9.5%.

Until September 30, 2022, Nicaragua’s total exports reached 3130.1 million dollars, according to official statistics.

Countries like Venezuela, Russia or China — political allies of the Ortega and Rosario Murillo regime — are not among the top ten destinations for Nicaraguan exports. None of the three exceeds 1% of total exports until last September, according to Cetrex data.

About 20.5 million dollars have been exported to Venezuela, mainly pharmaceutical products and vaccines; China has bought some 11.2 million, mostly mineral products; and goods worth 1.9 million dollars, essentially coffee, have been sent to Russia.

The United States remembers its “weight”

The Government of the United States has reminded the Ortega dictatorship of the importance of the bilateral relationship between the two countries. At the beginning of February, the US embassy in Nicaragua began a series of publications, on its social networks, related to the economic contribution of that country.

“The United States continues to be Nicaragua’s largest trading partner, with almost USD 5 billion in bilateral trade between January and July 2022 alone. The US represents more than 60% of Nicaragua’s exports (when including the free zone) and 35% of its imports”, detailed a tweet published in mid-October.

Another publication highlighted that “USA. The US is the main market for Nicaraguan beef.” Nicaraguan exports of this product to the United States, according to the embassy publication, “reached a record amount of 361 million dollars in 2021, supporting the sustainability of 650,000 jobs and more than 100,000 ranchers.”

They specified that, in 2021, Nicaragua was the world’s sixth supplier of meat to the United States. The national meat industry surpassed countries such as Uruguay, Argentina, Japan and Costa Rica, and was only below: Canada, Mexico, Australia, New Zealand and Brazil, according to a publication from last April.

The US embassy has stressed that Nicaragua imports 68% of the oil and derivatives it consumes from the United States, which “constitutes an indispensable source of energy to boost the local economy and sustain millions of jobs.”

More than 127% in free zone textile purchases

In a June publication, the American embassy pointed out that “the United States imports more than 90% of all the textiles produced in Nicaragua. These textiles, made in the free zones, represent the largest export item in terms of value (more than USD 2,000 million) and generate 75,000 jobs.”

The information was accompanied by two graphs, one of which indicated that, in 2006, Nicaragua exported some 879 million dollars in textile products to the US, an item that in 2021 reached some 1,996 million dollars in sales.

According to these figures, during the fifteen years of Ortega’s government, textile exports increased 127%.

The other graph detailed that Nicaraguan textile exports were distributed: 1996 million dollars to the United States, 60 million to Mexico and 53 million dollars to Canada.

The US statistics do not coincide with “preliminary” data from the Central Bank of Nicaragua (BCN) that indicates that in 2021 some 1,814.6 million dollars in free zone textile products were exported, although they maintain the United States as the main destination, with more than 80%.

Why the United States is Ortega's best trading partner

According to official figures, in 2021 some 3,378 million dollars in free zone products were exported, mainly textiles and harnesses.

Ovidio Reyes, president of the BCN, has commented that free zone exports will reach 3.5 billion dollars in 2022.

Blanca Callejas, president of the Association of Producers and Exporters of Nicaragua (Apen), said in an activity that, “between the traditional sector and the production of free zone exports”, Nicaragua will exceed this 2022, for the first time, the 7000 million dollars in exports.

The rise of Nicaraguan gold

The growth of free zone textile exports is only comparable to the vertiginous increase in gold sales to the United States, which until last August reached 620.2 million dollars.

“The United States imports about 80% of the gold produced in Nicaragua. Gold is one of the main export products in terms of value —totaling USD 942 million in 2021— and revenue from its export has grown more than 150% since 2017”, according to a publication from the US Embassy in Nicaragua, in May. past.

According to official statistics, in 2007, 61.4 million dollars in gold were exported, and last September the amount for that item was 708.7 million dollars. This represents an increase of 1000% in 15 years.

The amount up to September represents an increase of 8.6% compared to the same period in 2021, so if that proportion is maintained, the sector will close the year with revenues of 955.9 million, very close to the 1 billion dollars with which the industry planned to close 2023.

This week, the president of the United States, Joe Biden, modified an executive order and authorized a sanction to the General Directorate of Mines (DGM), attached to the Ministry of Energy and Mines (MEM), with which it is intended to “complicate ” Nicaraguan gold exports to the United States, according to Ricardo Zúñiga, deputy secretary of the Department of State for Latin America.

“We are talking about gold today, but this new authorization of the executive order allows us to analyze other sectors of the Nicaraguan economy,” Zúñiga warned.

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