Mr. Chairman, I would first like to welcome the Delegation of Paraguay, led by Ms Patricia Frutos Ruíz, Vice-Minister of Economic Relations and Integration and Ambassador Raúl Cano Ricciardi and his team in Geneva. I also thank Ambassador H.E. Mr Erwin Bollinger (Switzerland) for his insightful remarks as the Discussant.

Since the last review in 2017, Paraguay has shown resilience in the face of multiple challenges while maintaining political stability through peaceful elections and orderly transitions. Solid economic growth of 4.5% in 2023, after contracting as a result of the COVID-19 pandemic, and reduction in poverty from 26.4% to 24.7% are noteworthy achievements, although inequality still persists. However, the trade structure remains highly concentrated, with agricultural products accounting for 73% of total exports in 2023. While reforms to facilitate trade and investment, such as the elimination of consular fees and modernization of customs procedures, are welcome, trade costs remain about 1.5 times higher than major economies, notwithstanding the country’s geographical and economic conditions, as a landlocked developing country.

The EU and Paraguay have important and longstanding trade and economic ties. In 2023, our bilateral trade reached 1.4 billion euros, with the EU remaining one of Paraguay's key trading partners. While Paraguay's exports to the EU remain concentrated in agricultural products, notably soy and meat, we see considerable potential for further diversification. We particularly welcome Paraguay's efforts to participate more actively in global value chains by promoting innovation and services exports.

The EU commends Paraguay's concrete achievements in several key areas. The attainment of 100% renewable electricity production is exemplary and could provide Paraguay with an important comparative advantage for the low-carbon products. We also recognize Paraguay's efforts to strengthen enforcement mechanisms through its Anti-Smuggling Strategy, and encourage intensified implementation of the strategy, particularly given its importance for protecting legitimate trade flows and intellectual property rights

The EU very much commends Paraguay's active role in the WTO and its constructive engagement in various initiatives. We appreciate Paraguay's participation in Joint Statement Initiatives on Investment Facilitation for Development, E-commerce, MSMEs, and Services Domestic Regulation. We invite Paraguay to join the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) and strengthen this important initiative, as well as ratify the phase 1 of the Fisheries Subsidies Agreement for the agreement to enter into force as soon as possible.

We particularly commend Paraguay for achieving a 97.5% implementation rate of the WTO Trade Facilitation Agreement - a remarkable achievement that could be further enhanced by reviewing and streamlining the framework for non-automatic import licenses. The elimination of the Consular Visa Requirement represents a major step forward in reducing administrative burdens and trade costs for economic operators.

Regarding public procurement, while we welcome the new law of 2022, we must express our concern regarding the 40% national preference margin and its impact on market access. Furthermore, the fragmentation of infrastructure projects into smaller portions, while intended to promote local participation, may limit competition and efficiency. We encourage Paraguay to consider measures to allow greater participation of international suppliers and to consider joining the WTO Government Procurement Agreement, to which Paraguay is an observer.

The progress made on traceability systems, especially in the beef and leather sectors through SITRAP, deserves particular recognition. These improvements align well with EU due diligence requirements and represent an important step toward promoting sustainable trade. We encourage the extension of such systems to other sectors. We also commend Paraguay for establishing its Register of Geographical Indications - becoming the first among Mercosur countries to do so -, which demonstrates real leadership in intellectual property protection.

However, some areas of concern still require attention. The current Law 194/93 on Commercial Representation would benefit from review to better protect trademark owners and provide more balanced conditions for commercial relationships. Furthermore, intellectual property rights’ enforcement remains challenging, with piracy and counterfeiting continuing to present significant problems that require sustained attention.

The EU-Mercosur Agreement remains a crucial opportunity for deepening our trade relationship. This is not just another trade agreement, but a strategic partnership that would create significant opportunities for both parties and go well beyond traditional market access. We encourage Paraguay's continued commitment to concluding this agreement and emphasize its potential to promote sustainable development, economic modernization and diversification of exports.

Noting the importance of the agricultural sector for the Paraguayan economy and the impact of climate change on production, the EU is committed to engage with Paraguay to support its current efforts to increase sustainability and resilience of its agricultural supply chains.

Mr. Chairman, we fully support Paraguay's efforts to diversify its economy and develop national production, emphasizing that this should be consistent with WTO rules. We much appreciate Paraguay's responses to our questions in due time and look forward to further clarification on these matters. The EU remains committed to working with Paraguay to address these challenges and to further strengthen our trade and economic relationship.

On behalf of the EU, I wish Paraguay a successful 5^th Trade Policy Review.

Thank you, Mr. Chairman