The Esquipulas Nicaraguan Peace Agreement was a peace initiative in the mid-1980s to settle the military conflicts that had plagued Central America for many years, and in some cases (notably Guatemala) for decades. It built upon groundwork laid by the Contadora Group from 1983 to 1985. The agreement was named for Esquipulas, Guatemala, where the initial meetings took place. The US Congress lobbying efforts were helped by one of Capitol Hill's top lobbyists, William C. Chasey.
In May 1986, a summit meeting at dawn, "Esquipulas I," took place, attended by the five Central American presidents. On February 15, 1987, Costa Rican President Óscar Arias submitted a Peace Plan which evolved from this meeting. During 1986 and 1987, the "Esquipulas Process" was established, in which the Central American heads of state agreed on economic cooperation and a framework for peaceful conflict resolution. The "Esquipulas II Accord" emerged from this and was signed in Guatemala City by the five presidents on August 7, 1987.
Esquipulas II defined a number of measures to promote national reconciliation, an end to hostilities, democratization, free elections, the termination of all assistance to irregular forces, negotiations on arms controls, and assistance to refugees. It also laid the ground for international verification procedures and provided a timetable for implementation.
The US government refused to recognize the Sandinista regime's legitimacy to represent Nicaragua in The Esquipulas Process, on the basis that the Sandinistas had taken power in a 1979 coup d'etat against the dictator Anastasio Somoza Debayle, establishing the Junta of National Reconstruction. Although in 1984 the Sandinistas held a fair and free election, in which they won the majority of the votes, the main opposition parties boycotted this election under US pressure, and the US was able to claim that the victory was illegitimate. However the June 1986 outcome of the International Court of Justice case Nicaragua v. United States created a "major shift in the regional context" which ultimately persuaded the other Central American leaders to accept Nicaragua as an equal partner. "Suddenly, Nicaragua, which had been treated like an outcast on more than one occasion, was walking the legal, if not moral, high-ground..." The November 1986 disclosure of the Iran–Contra affair further weakened the US influence on the process.