The Biden administration has initiated an inquiry into labor and human rights violations occurring in Nicaragua, a situation that could affect relations with a nation that the U.S. has a free trade agreement with, as concerns escalate regarding the increasingly authoritarian regime of President Daniel Ortega.
Defined under section 301 of the Trade Act of 1974, this investigation by the U.S. Trade Representative must be concluded within a year.
In a statement, U.S. Trade Representative Katherine Tai noted that there are multiple reports indicating that the Nicaraguan government is engaged in oppressive actions that not only endanger the welfare of its workers but also disrupt fair competition and contribute to regional instability.
The investigation will examine allegations of abuse and their impact on U.S. commercial relations. Following this evaluation, any potential retaliatory measures will be decided.
Tai highlighted that credible information from various watchdog organizations points to politically motivated arrests, instances of forced labor, human trafficking, and the repression of the rights to assemble and negotiate collectively under Ortega’s administration.
These developments were framed as contributing to increased worker exploitation and obstructing economic growth and trade potential. The decision to launch the investigation forms part of a broader series of actions taken Tuesday in observance of International Human Rights Day.
Nicaragua’s Vice President and government spokesperson, Rosario Murillo, did not respond right away to a request for comment sent via email.
In May, the U.S. implemented Section 301 tariffs on various goods imported from China, including electric vehicles, advanced battery technologies, solar panels, steel, and aluminum. This move was largely based on the assessment that China was unfairly subsidizing these industries.
President Biden remarked on these tariffs, stating, “For years, the Chinese government has poured state money into Chinese companies. It’s not competition, it’s cheating.”
In the case of Nicaragua, enacting retaliatory measures could be complicated by its involvement in the Central America Free Trade Agreement, which encompasses five member nations. Among these, Nicaragua is one of only two countries to maintain a trade surplus with the U.S., amounting to around $3 billion in 2022, which constitutes nearly 20% of its GDP.
Recently, Ortega proposed a constitutional amendment that would formally designate him and his wife, Murillo, as “co-presidents” of Nicaragua while extending the presidential term from five to six years.
This proposal arises amid a sustained crackdown by Ortega’s government, which has led to the mass imprisonment and forced exile of political opponents, including journalists and religious leaders. Since 2018, the regime has closed upwards of 5,000 organizations, primarily those connected to religious activities, and compelled many individuals to leave the country.