Ten years of CAFTA-DR in Nicaragua

U.S. Ambassador to Nicaragua Laura F. Dogu recently delivered remarks on the 10-year anniversary of the free trade agreement between the US and Central American and the Dominican Republic (CAFTA-DR: Challenges and Opportunities after 10 Years of Success).

Ambassador Dogu hyped the benefits that have accrued to both Nicaragua and the United States in the treaty's first ten years. There has been a phased implementation of CAFTA-DR so not all of its conditions have yet to be implemented.

Here is the ambassador discussing the strengths and weaknesses when it comes to foreigners choosing whether to invest in Nicaragua.

Nicaragua’s physical security, low labor costs, and government-private sector dialogue are frequently cited as reasons to invest in Nicaragua.  

On the other hand, U.S. firms which are thinking of investing in Nicaragua but have chosen not do so have said the poor rule of law due to weak institutions, unpredictable customs practices, and limited protection of property rights were the reasons they chose not to invest in Nicaragua.  

We encourage Nicaragua to address these challenges in order to create a better climate for investment and business which in the end will create more economic opportunities for the Nicaraguan people.

I can't say that "progress" on the transoceanic canal has strengthened the rule of law. Shady legislation and repression of individuals and groups affected by the canal's planned path tend not to do that.

And it is really not clear that President Ortega's all but certain victory in November's election is going to improve the rule of law. Recent polls give Ortega a commanding lead seven months out from the elections. I can't imagine that the US government is going to speak up too strongly against Ortega, given the challenges that the rest of the region confronts. All bets are off, however, if the Republicans win.

Might as well support the happy Nicaraguans and not rock the boat.