Mexico Nicaragua Free Trade Agreement

The Mexico Nicaragua Free Trade Agreement: An Overview

The Mexico Nicaragua Free Trade Agreement (MNFTA) is a treaty governing trade and commerce between the two countries. Signed in 1998, the agreement aimed to eliminate trade barriers and promote economic growth by increasing bilateral trade and investment.

The MNFTA provides for the gradual phasing out of tariffs on goods and services traded between Mexico and Nicaragua. It also includes provisions on intellectual property protection, investment, and dispute settlement mechanisms, among others.

Benefits of the MNFTA

The MNFTA has brought significant benefits to both countries. For Nicaragua, the agreement has provided a boost to its economy, particularly in the agricultural sector. The elimination of tariffs on crops like beans, rice, and sugar has allowed Nicaraguan farmers to export their products to Mexico competitively. This has led to increased farming activity and job creation in the country.

Mexico, on the other hand, has gained access to Nicaragua`s markets, particularly in the areas of manufacturing and services. Mexican businesses have expanded their operations in Nicaragua, taking advantage of the country`s skilled labor force and low production costs. The MNFTA has also made it easier for Mexican firms to secure contracts and investments in Nicaragua.

Aside from economic benefits, the MNFTA has also strengthened the diplomatic relationship between Mexico and Nicaragua. The two countries share a long history of cultural and historical ties, and the agreement has further solidified their partnership.

Challenges and Criticisms of the MNFTA

Despite its many benefits, the MNFTA has faced some challenges and criticisms. Some sectors in Nicaragua have opposed the agreement, claiming that it has led to unfair competition from Mexican businesses. In particular, the country`s small to medium-sized enterprises have argued that they are unable to compete with larger Mexican firms.

There have also been concerns about environmental and labor standards in both countries. Critics have pointed out that the MNFTA has led to relaxed regulations and increased exploitation of workers and resources in the name of economic growth.


The Mexico Nicaragua Free Trade Agreement has had a significant impact on the economies of both countries. Despite some challenges and criticisms, the agreement has promoted economic growth, expanded trade and investment, and strengthened the diplomatic relationship between Mexico and Nicaragua. As the two countries continue to reap the benefits of the MNFTA, it remains a symbol of the power of free-trade agreements to promote international cooperation and prosperity.