The EU's institutional relations with Nicaragua and the other countries of Central America – Costa Rica, El Salvador, Guatemala, Honduras and Panama - were originally based on the San José Dialogue. Launched in 1984, this sought to resolve armed conflicts in the region through dialogue and negotiation; it now provides a basis for strengthening cooperation, economic links and regional integration. Central America-EU relations are governed by the 2003 Political Dialogue and Cooperation Agreement .
The ambitious, wide-ranging EU-Central America Association Agreement signed in June 2012 in Tegucigalpa (Honduras) is based on political dialogue, cooperation and a free trade area. Only the section relating to trade is currently in force, and this will remain the case until the EU countries complete ratification.
The agreement's political dialogue mechanism enables the 2 sides to share views on issues including
The trade section, which establishes an EU-Central America free trade area, will boost trade and investment flows between the 2 regions. It takes account of their disparity in terms of economic development. as does the wide-ranging cooperation section: see Regional Strategy Paper 2007-2013 and the Mid-Term Review of the 2007-2013 Regional Strategy Paper for Central America .
The EU is the main donor of official development aid to Nicaragua. The priorities for the latest cooperation programme are set out in:
A new 2014-2020 cooperation programme was approved in August 2014.
At the invitation of the Nicaraguan Government, the EU sent an Election Observation Mission to the 2011 elections; see EU EOM Nicaragua 2011 .
The EU also supports various initiatives by NGOs and other groups in the areas of human rights (through the EIDHR instrument), local development and the environment.