LatinNews Daily - 10 November 2022

In brief: El Salvador and China announce trade talks

*El Salvador’s President Nayib Bukele and China’s ambassador to El Salvador Ou Jianhong, have announced the start of negotiations between the two countries regarding a free trade agreement (FTA). The announcement came as President Bukele revealed that El Salvador was receiving a donation of 1,450 tonnes (t) of fertilizer and 930t of wheat flour from China which he said would “mitigate the impact of the global economic crisis.” El Salvador established ties with China in 2018 under the previous Frente Farabundo Martí para la Liberación Nacional (FMLN) government led by former president Salvador Sánchez Cerén (2014-2019) after severing ties with Taiwan. On 7 November El Salvador’s Vice President Félix Ulloa told Bloomberg that China had offered to help El Salvador refinance its foreign debt. However, he said El Salvador still needs to tread carefully: “We are not going to sell to the first bidder, we need to see the conditions.” A spokesperson for China’s foreign ministry said he was not aware of the matter, according to Bloomberg. In September international credit ratings agency Fitch downgraded El Salvador’s Long-Term Foreign Currency Issuer Default Rating (IDR) to ‘CC’ from ‘CCC’ warning that a “default of some sort [was] probable”.

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