RELATIONS WITH THE EU
The European Union and Paraguay
Since the 1990s, the EU and Paraguay have gradually strengthened their political, economic and social ties. The EU bases its relationship with Paraguay on our shared values: democracy, human rights, rule of law.
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Voters mark the index finger of the right hand in indelible ink before depositing their ballot papers at the polls.
Copyright: Nathalia Aguilar (MOE en Paraguay).
Political relations
Promoting democracy and human rights
In 1992 the European Union (EU) and Paraguay signed the Framework Cooperation Agreement to promote bilateral relations.
Political dialogue has played an essential role in the defence and promotion of democracy and the defence of human rights. Paraguay and the EU share concepts of freedom, democracy, human rights, rule of law, social justice and regional integration, principles that have become the foundations for cooperation and dialogue.
The regular meetings of the Joint Committee (composed of senior civil servants from Paraguay and the EU), are an opportunity to advance in relations between the EU and Paraguay.
Economic and trade relations
Working towards economic prosperity
The EU's economic relations with Paraguay have been long and fruitful. The EU is not only one of Paraguay’s main trade partners, but also the largest foreign investor, accounting for 28% of the FDI in the country and investment stock of approximately €1 billion (2019).
In 2020, EU was Paraguay’s third largest trade partner with 6% of the Paraguay’s total trade, after Mercosur (49%) and China (20%). EU imports from Paraguay (€418m) were mainly agricultural products (86%), in particular soy and meat. EU exports to Paraguay (€593m) were dominated by manufactured products (80%), in particular machinery and transport equipment (17%), beverages (15%), motor vehicles (10%), pharmaceuticals (6%), optical instruments (5%) and chemicals (3%).
Trade in services between the EU and Paraguay stood at €360m in 2019, with a growing trend and an important EU surplus (€114m).
Within the context of regional integration, the EU and Mercosur began to prepare an inter-regional association agreement in 1999. As of 2019, the trade part of this agreement has been agreed to in principle. The EU-Mercosur Association Agreement is expected to strengthen political dialogue and cooperation, significantly expand economic, and trade relations between the regions to their mutual benefit.
The EU is Mercosur's number one trade and investment partner. The EU is the biggest foreign investor in Mercosur. While the relationship is very substantial both exporters and potential investors face barriers in Mercosur markets.
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The EU flag flies alongside that of Mercosur.
Copyright: Shutterstock.
GLOBAL GATEWAY
The Global Gateway Investment Agenda is the EU strategy aimed at creating smart, sustainable, and secure connections in the digital, climate change, renewable energy, transport, health, education, and research sectors. The Global Gateway Investment Agenda for Paraguay includes the following main initiatives:
- Lambaré Basin Water and Sanitation Project, which will improve access to sanitary sewer services and water service quality for the areas of Asunción, Fernando de la Mora, and Villa Elisa.
- Forestry and Pulp Initiative: Support for the creation of quality jobs, professional training, energy generation, and more.
- Support for the National Electricity Administration (ANDE) in renewable energy generation or transmission.
For more information about Global Gateway in Paraguay, visit this page.
Technical, Financial Cooperation and Global Gateway
With Paraguay, for a better tomorrow
The 1992 Framework Cooperation Agreement is the basis for bilateral cooperation between Paraguay and the European Union. Priorities of technical and financial cooperation are established in multiannual indicative programmes, which run for seven years. The design of the current 2014-2020 Multiannual Indicative Programme is based on priorities established in the Sustainable Development Goals of the United Nations, the EU Agenda for Change, the European Consensus on Development, national priorities and the division of work defined within the context of the joint programme between the European Union and its member states. The programme has allocated a total budget of €168 million as non-repayable cooperation funds to Paraguay. The Government of Paraguay and the EU have together decided to focus this joint work on the following four priority sectors, in line with the 2015-2030 National Development Plan.
The European Union in Paraguay works by joining efforts with the government, the private sector, civil society, and other international organizations to promote sustainable development and improve people’s quality of life, leaving no one behind. Our cooperation prioritizes key sectors for the country’s development, such as education, sustainable growth, social protection, and democracy and participation.
The Global Gateway Investment Agenda is the EU strategy aimed at creating smart, sustainable, and secure connections in the digital, climate change, renewable energy, transport, health, education, and research sectors. The Global Gateway Investment Agenda for Paraguay includes the following main initiatives:
- Lambaré Basin Water and Sanitation Project, which will improve access to sanitary sewer services and water service quality for the areas of Asunción, Fernando de la Mora, and Villa Elisa.
- Forestry and Pulp Initiative: Support for the creation of quality jobs, professional training, energy generation, and more.
- Support for the National Electricity Administration (ANDE) in renewable energy generation or transmission.
For more information about Global Gateway in Paraguay, visit this page.
Multilateral relations
Promoting regional integration
The EU carries out political dialogue with Paraguay within the framework of European Union - Mercosur relations. In this context, negotiations for an EU-Mercosur Association Agreement are underway, in order to strengthen relations between the regions politically, economically and in terms of cooperation. The agreement includes the creation of a free trade area. Once this agreement is finalised, it will help further consolidate the already good relations between the EU and Paraguay (EU-Mercosur).
On a bi-regional level, the EU has developed close ties with Latin America. The European Union is strengthening its political partnership with Latin America and the Caribbean by focusing it on four priorities - prosperity, democracy, resilience and effective global governance - for a common future.
The vision for a stronger and modernised bi-regional partnership focused on trade, investment and sectoral cooperation is set out in a new joint communication presented by the European Commission and the High Representative. This new partnership aims at working together in changing global and regional realities that require joint efforts to address common challenges and opportunities.