The economics ministry has announced that it will give Taiwanese importers a grace period before it cancels a trade agreement with Nicaragua.
Taiwan and Nicaragua signed a free trade agreement in 2008, at a time when the two sides maintained formal diplomatic relations. However, Nicaragua severed its ties with Taiwan in December and established relations with Beijing instead. At the same time, it unilaterally annulled its trade agreement with Taiwan, ignoring the requirement for one party to inform the other 180 days in advance of breaking off the agreement.
Taiwan plans to declare the agreement void, too. But the economics ministry says it will wait to do so in order to lessen any financial impact on businesses that have paid in advance for shipments of Nicaraguan goods.
Taiwan’s primary imports from Nicaragua are frozen shrimp and frozen beef products. But other imports include brown sugar, refined sugar, coffee beans, dried sea cucumbers, and scrap metal. The overall value of trade between Taiwan and Nicaragua last year was somewhat over US$166 million, a relatively small amount for Taiwan.
Though canceling the trade agreement with Nicaragua will only make a small dent on Taiwan’s overall trade, the government is still working to help businesses that will suffer as a result. It is encouraging importers to find alternative suppliers in countries that still have trade agreements with Taiwan, especially Belize in the case of coffee beans and Paraguay in the case of beef products.