Paraguay Open to Trade with China, Maintains Diplomatic Ties with Taiwan, Says Outgoing President

Paraguay Affirms Commitment to Taiwan Despite Trade Opportunities with China

Outgoing Paraguayan President Mario Abdo Benitez has stated that Paraguay is open to expanding trade relations with China while maintaining its longstanding diplomatic allegiance to Taiwan. Speaking at the Qatar Economic Forum, Benitez emphasized that the recently elected president, Santiago Pena, is committed to preserving Paraguay’s six-decade-old relations with Taiwan, despite China’s attempts to isolate the island nation.

Paraguay’s Unique Position in South America

Paraguay remains the sole South American nation to maintain diplomatic ties with Taiwan, as neighboring countries have progressively switched their allegiance to China. In recent years, countries such as Panama, El Salvador, the Dominican Republic, Nicaragua, and most recently Honduras, have shifted their recognition to Beijing. During the campaign for last month’s election, influential Paraguayan companies and the main opposition candidate advocated for a change in diplomatic relations, aiming to access China’s vast market.

Striking a Balance: Expanding Trade with Taiwan and Utilizing Mercosur

President Benitez highlighted that since assuming office in 2018, he had transformed Paraguay’s relationship with Taiwan from one of cooperation to a more comprehensive strategic alliance. This shift has resulted in a significant increase in trade between the two nations, with a growth rate of 500 percent during his term. The outgoing president believes that continued trade growth will provide compelling arguments to defend Paraguay’s strategic alliance with Taiwan. Furthermore, Benitez expressed optimism about the potential for increased Taiwanese investment in Paraguay under the incoming government.

However, Benitez also acknowledged the potential for Paraguay to benefit from any trade agreements that the Mercosur South American trade bloc may establish with China. Brazilian President Lula Inacio Lula da Silva has emphasized the importance of prioritizing such a deal. While Paraguay remains committed to maintaining its diplomatic relations with Taiwan, it is open to leveraging the Mercosur platform to engage in trade with any country worldwide, including China.