24 and 26 July 2006

Concluding remarks by the Chairperson

See also:
> Press release: Recent economic progress could be sustained by more multilateral liberalization

1. This second Trade Policy Review of Nicaragua has been both thorough and informative; it has allowed us a better understanding of Nicaragua's trade policies and practices, of their evolution since 1999, and of their outlook. The reports by Nicaragua and the Secretariat, and the responses of the delegation of Nicaragua to the questions by Members, have served as a valuable resource and have made a significant contribution to transparency. We owe the high quality of this review to the participation of the Nicaraguan delegation, led by H.E. Mr. Alejandro Argüello, Minister of Development, Industry and Trade, and to the active involvement of Members. Our thanks are also due to our discussant, H.E. Mr. Juan Antonio March, for his insightful contribution to our meeting.

2. Members welcomed Nicaragua's positive overall economic performance over the last few years, with moderate GDP growth, and improvements in the fiscal and current account deficits. They noticed that the ongoing reforms are contributing to the establishment of a competitive market economy, and encouraged Nicaragua to continue its structural reforms, so as to reduce widespread poverty and achieve social progress. The reforms, together with increased investment in infrastructure and in human capital, would help to further stabilize the economy.

3. Members appreciated Nicaragua's firm commitment to the multilateral trading system, including the Doha Development Agenda. They noted, however, that an increasing part of its trade was taking place under preferential regimes. While Members congratulated Nicaragua for the steps taken to further liberalize its trade and investment regimes, they encouraged it to reverse the increase in its applied MFN tariff of the last few years, partly as a result of Nicaragua's commitments under its regional trade arrangements. Members also encouraged Nicaragua to reduce the gap between applied and bound tariff rates. One Member raised a concern regarding a tax imposed by Nicaragua on goods and services coming from or originating in that Member.

4. On sectoral issues, Members noted Nicaragua's high dependence on exports of agricultural and agricultural-processed products. They also commended Nicaragua for the steps being taken to address inefficiencies, particularly in mining, energy, and manufacturing, including through the enactment of new laws. Members noted that further liberalization of services may improve the efficiency of Nicaragua's economy and the competitiveness of its exports, especially by reducing costs related to financial services, telecommunications and transport.

5. Members sought clarification on a number of issues, notably: customs procedures and valuation; internal taxation; import and export licensing; contingency trade remedies; standards and SPS measures; free zones; public enterprises and privatization; government procurement; and protection of intellectual property rights.

6. Members expressed their appreciation for the comprehensive responses to their questions as provided by the Nicaraguan delegation.

7. In conclusion, Members value Nicaragua's efforts to improve its economic environment. As a small economy that is highly dependent on foreign trade, Nicaragua has a lot to gain from a free and open trade environment. I encourage Nicaragua to continue improving its multilateral commitments, both on goods and services, with a view to further improving its transparency and predictability. I urge Members to support Nicaragua's reforms by providing greater market access to its goods and services.