Economy, Foreign Trade
Association of Caribbean States, Central American Common Market, CACM, Union of Soviet Socialist Republics, economic integration
Nicaragua’s economy depends heavily on agricultural exports and imports of consumer goods and petroleum. The long civil war of the 1980s wiped out much of Nicaragua’s foreign trade. Business with the United States largely disappeared under an embargo imposed by the Reagan administration, while fighting in border areas undermined trade with neighboring Central American states. However, trade with the United States recovered rapidly in the 1990s, after the embargo was lifted and after the Union of Soviet Socialist Republics (USSR) collapsed and stopped providing aid.
Although exports were recovering in the mid-1990s, Nicaragua continues to run a huge trade deficit. Imports in 2000, totaling $1,748 million, outpaced the $625 million in exports. The United States, Germany, El Salvador, Spain, Belgium, Costa Rica, The Netherlands, and Honduras are the major markets for exports. Coffee is the most important export, followed by cotton, sugar, seafood, meat, gold, sesame, and bananas. Imports come largely from the United States, Venezuela (petroleum), Costa Rica, Guatemala, Panama, and Japan. Most important are consumer goods, machinery and equipment, and petroleum products.
Nicaragua is a founding member of the Central American Common Market (CACM), an organization founded in 1960 to promote economic integration and free trade. It is also a member of the World Trade Organization (WTO) and the Association of Caribbean States (ACS), a trade association of nations bordering on or within the Caribbean.
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