Minister of Economic Affairs Mei-Hua Wang led a delegation on four-day visit to Paraguay on Aug. 18, 2023. During the trip, she met with new President Santiago Pena Palacios and also co-chaired the 22nd Paraguay-ROC Economic Cooperation Conference with Minister of Industry and Commerce Francisco Javier Gimenez. Taiwan expressed its determination to strengthen bilateral ties by agreeing to convene the Conference just two days after the new Paraguayan government took office.
During the meeting, the two sides discussed the implementation outcomes of their bilateral Agreement on Economic Cooperation. Since the ECA entered into force in 2018, it has brought benefits and growth in bilateral trade, which increased by 234% from US$75.73 million in 2017 to US$250 million in 2022. During that period, Paraguayan frozen beef exports to Taiwan increased from 6,917 tons to 36,000 tons, ranking Paraguay as Taiwan's second largest source of such imports. Moreover, Paraguay also became Taiwan's largest source of frozen beef offal imports in 2022.
The Paraguay side affirmed that Taiwan's imports of Paraguayan agricultural products has significantly benefitted the Paraguayan economy. However, its agriculture sector was severely impacted by high production in nearby countries during the pandemic. Hence, the Taiwan market has become more important, and Paraguay would like to expand its exports of agricultural products to Taiwan. The Taiwan side responded that two additional Paraguayan beef producing facilities have been granted approval this year to export to Taiwan, which will help to boost sales.
In addition, Taiwan and Paraguay signed a Memorandum of Understanding on Mutual Recognition of Organic Agricultural Production Systems this year. When certified Paraguayan organic products are exported to Taiwan, they will automatically be recognized as organic without need for reverification, which will help nearly 40,000 Paraguayan organic farmers expand their sales in the Taiwan market potentially as much as US$100 million in total. Taiwan has also assisted Paraguay in preventing African Swine Fever in order to protect its hog industry.
In 2022, Taiwan and Paraguay signed a Letter of Intent on Industrial Policy Cooperation, a five-year project under which Taiwan provides consulting on economic development policy for Paraguay. The general report written up by a Taiwan expert team in the first year outlines the conditions and advantages of Paraguay's industrial development as well as Taiwan's policies and experience-sharing regarding industrial park management and SME support mechanisms based on Paraguay's specific needs for developing an industrialized economy.
In addition, the Taiwan side has been encouraging Taiwanese enterprises to invest in Paraguay, with the textile, food processing and new energy industries listed as the priority sectors for industrial cooperation between the two countries. During the Conference, the Taiwan side listened to the new Paraguayan government's views regarding implementation of the LOI, and then both sides discussed future directions of cooperation under its framework and explored collaborative opportunities in individual sectors according to the Paraguayan economy's needs and Taiwanese companies' investment needs.
Taiwan has implemented the Project to Strengthen Capacity to Support Development of Micro, Small and Medium Enterprises (FOMIPYME) in various sectors in Paraguay, such as textiles, footwear, Mate tea, and milk products. Since the FOMIPYME was due to end this year, both sides agreed on extending the cooperation. The Taiwan side committed to providing assistance for follow-up projects, for which the Paraguay side expressed appreciation.
Regarding investment promotion, several Taiwanese textile and electric bus enterprises have a strong interest in investing in Paraguay. However, they have expressed that they would like support measures to facilitate their planned investment. Minister Wang therefore asked the Paraguayan government to provide related assistance according to their needs and stated that the Taiwan government would help them with financing based on their specific requirements and feasibility of their investment projects. The Paraguay side agreed to work to improve the investment environment to meet the needs of potential investing enterprises.
During the Conference, the two sides also reached a number of additional consensuses on deepening and expanding their bilateral cooperation in various areas, including carbon reduction, credit counseling for women's entrepreneurship, petroleum and gas exploration, intellectual property rights protection, as well as the MOU between the Taiwan External Trade Development Council and Paraguay's Investment and Export Network.
Located at the center of South America, Paraguay is a member of the Southern Common Market and has forged close economic and trade networks with Argentina, Brazil, Chile, Colombia, Peru, and other countries in the region. Recently, more and more Taiwanese businesses have been visiting Paraguay to survey the investment environment as the country can serve as an ideal gateway for tapping the wider continental market.
Sources: MOEA
