WASHINGTON — The Biden administration is opening an investigation into labor and human rights abuses in Nicaragua, a U.S. official said Tuesday, impacting relations with a country the U.S. has a free trade deal with amid growing concerns over President Daniel Ortega’s increasingly authoritarian rule.
The investigation being opened by the U.S. Trade Representative must be completed within a year, according to the official and another person familiar with the probe who spoke on the condition of anonymity to discuss the probe before it was announced.
The White House was expected to announce the decision later Tuesday, the two people said.
The investigation, authorized under section 301 of the Trade Act of 1974, will look into not only allegations of abuse but also the extent to which they affect commerce with the U.S. Only after that determination is made will retaliatory actions, if any, be taken.
Nicaragua Vice President and government spokeswoman Rosario Murillo did not immediately respond to an emailed request seeking comment.
In May, the U.S. government imposed Section 301 tariffs on an array of Chinese goods, including electric vehicles, advanced batteries, solar cells, steel and aluminum. Those tariffs largely reflected the government’s conclusion that China was unfairly subsidizing those industries.
“For years, the Chinese government has poured state money into Chinese companies,” President Joe Biden said about those tariffs. “It’s not competition, it’s cheating.”
In Nicaragua’s case, any retaliatory action would be complicated by its membership in a regional free trade pact, the Central America Free Trade Agreement.
Of the five members of the trade pact, Nicaragua is one of only two to run a trade surplus with the U.S., about $3 billion in 2022, or almost 20% of its gross domestic product.
Ortega last month proposed a constitutional reform that would officially make him and his wife, current Vice President Rosario Murillo, “copresidents” of the Central American nation and extend the presidential term to six years from five.
The proposals come amid an ongoing crackdown by the Ortega government that has resulted in the mass imprisonment and forced exile of adversaries including religious leaders and journalists. Since 2018, th government has shuttered more than 5,000 organizations, largely religious, and forced thousands to flee the country.
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