Paraguay open to trade agreements with China through Mercosur

Photo: Wikimedia Commons.

Paraguay’s President Santiago Peña on Wednesday expressed his willingness to negotiate trade agreements with China through the regional trading bloc Mercosur, despite his country’s historic diplomatic ties with Taiwan. 

Peña said he was “fully open” to the bloc negotiating with Beijing, a stance that has been a source of controversy as Paraguay is the only country in South America that maintains formal diplomatic relations with Taiwan, a nation that the People’s Republic of China claims as part of its territory. 

This diplomatic relationship has affected Paraguay’s grain exports to China, as the Chinese government does not accept countries that recognise Taiwan’s sovereignty over that of the People’s Republic of China.

Mercosur, a trade bloc that includes Argentina, Brazil, Paraguay, and Uruguay, is still in negotiations to conclude a trade agreement with the European Union. However, it has also been exploring the possibility of a trade agreement with China.

Chinese Foreign Ministry spokesman Mao Ning called on Paraguay to align itself “on the right side of history” and reiterated China’s interest in strengthening economic and trade cooperation with Mercosur nations and other Latin American countries. 

Meanwhile, Taiwan’s Foreign Ministry noted that Peña has publicly reaffirmed his support for Paraguay-Taiwan ties, and expressed that Mercosur countries should carefully evaluate their economic and trade relations with China.

Talks between Mercosur members and their Chinese counterparts intensified on 12 August in the Uruguayan capital of Montevideo. Peña noted that while Brazil has been cautious about an agreement with China, Uruguay has led the effort to initiate a collective dialogue within Mercosur to explore new trade opportunities with the People’s Republic of China.

Main source:

Paraguay está abierto a acuerdos comerciales con China, pese a sus vínculos con Taiwán – Ámbito.