Paraguayan President Santiago Peña expressed his willingness on Wednesday to pursue trade agreements with China through the South American trade bloc Mercosur, despite Paraguay’s longstanding diplomatic ties with Taiwan. This move comes as Mercosur continues negotiations on a significant trade deal with the European Union, while also exploring possibilities with China.
Paraguay is the only South American nation that maintains formal diplomatic relations with Taiwan, a stance that has historically complicated its agricultural trade, particularly in grain exports, with China. The Asian giant, which claims sovereignty over Taiwan, has been reluctant to engage in trade with countries that officially recognize the island.
In an interview with Reuters, President Peña underscored Paraguay’s openness to advancing trade agreements within the framework of Mercosur, which includes Brazil, Argentina, Uruguay, and Paraguay. “Our position with China is one of total openness,” Peña stated, noting that the main obstacle lies with China’s refusal to acknowledge Paraguay’s recognition of Taiwan.
The Mercosur bloc has been actively engaged in discussions with China, with a significant dialogue session taking place on August 12 in Montevideo, Uruguay’s capital. President Peña acknowledged the complexities involved, highlighting Brazil’s cautious stance but affirming his support for the negotiations. “I see prudence on Brazil’s side,” he said, adding that Uruguay appears to be the most eager to advance talks with China. “We accompany this effort to have a conversation as a bloc.”
The potential trade agreement with China could be a pivotal development for Mercosur, which has long sought to expand its trade partnerships beyond the European Union. However, Paraguay’s unique diplomatic position with Taiwan remains a critical factor in how these discussions will unfold.
As of now, there has been no immediate response from China’s foreign ministry or its embassy in Uruguay regarding Paraguay’s openness to these trade talks. The situation continues to develop as Mercosur navigates the complex dynamics of international trade and diplomacy.
