Taiwan, Nicaragua sign free trade agreement
Monday • June 19, 2006
Taiwan and Nicaragua have signed a free trade agreement (FTA) pledging to join forces to explore the North American market, the Board of Foreign Trade (BOFT) said.
"Taiwan will take advantage of Nicaragua’s close trade ties with the US to expand textile sales in the US market," BOFT deputy director James Wu said.
Managua and Washington have inked the Central America Free Trade Agreement which offer preferential tariffs to textile products exported from Nicaragua to the US, Wu said.
Through the FTA, Taiwanese textile manufacturers who invested in the Latin American country hiring some 30,000 employees are expected to benefit from the lower rates for their exports to North America, Wu added.
The US was Taiwan’s third largest buyer last year absorbing 15.1 percent of the island’s total exports.
"The FTA is expected to strengthen competitiveness of Taiwan and Nicaragua and create a win-win situation for both sides," he said.
The FTA is the third Taiwan has signed following that with Panama in 2003 and the one with Guatemala in 2005.
In 2005, two-way trade between Taiwan and Nicaragua totaled 46.27 million US dollars, accounting for 0.012 percent of Taiwan’s total foreign trade worth 371 billion dollars.
"The trade volume with Nicaragua is very small but it is just one of the factors Taiwan considers for free trade agreement negotiations. We want to emphasise the real benefits, like expanded visibility of Taiwan products in the US market," another BOFT official said.
The official added the FTA is expected to reinforce Taiwan’s diplomatic relationship with Nicaragua. The island is also under FTA negotiations with Honduras and Salvador, another two of its 25 diplomatic allies.
Washington, which recognises Beijing instead of Taipei, has turned down Taiwan’s proposal for a FTA saying it remained premature to discuss the issue.