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EU – Paraguay relations

European Commission - MEMO/13/743   14/08/2013

Other available languages: ES

European Commission

MEMO

Brussels, 14 August 2013

EU – Paraguay relations

An overview of Paraguay

Paraguay is a landlocked country of over 400,000 km2 with around 6.5 million inhabitants (of which 62.1% is urban population).

The country experienced more than three decades of dictatorship under Alfredo Stroessner, who was ousted in 1989 and died in exile in 2006. The political transition has been unstable, including the assassination of a vice-president, the resignation of a president, an attempted coup, and the impeachment of previous President-elected Lugo, which triggered strong reactions from the region and Paraguay's suspension from the two main regional blocks, UNASUR and MERCOSUR. The EU deployed an Elections Observation Mission (EOM) to Paraguay general elections in 21 April 2013.

EU development cooperation with Paraguay

With a total amount of €130 million, EU bilateral cooperation with Paraguay during the period 2007-2013 has focused on support to the education sector (€89 million); poverty reduction (€31 million); and support to the integration of the Paraguayan economy (€10 million).

With regards to education, the EU is supporting Paraguay in the implementation of its education policy (known as 'Plan 2020') providing additional resources to continue the reform initiated and support the country in reducing inequalities. Key reform areas focused on improving access to education and raising the quality of education and strengthening institutional capacities.

Support to poverty reduction is given via budget support to the national Social development programme (€31 million). It tackles inequalities by embedding social protection policies in a wider empowerment strategy for the poorest, including access employment, health, water and justice.

Thanks to two projects in the field of economic integration (€10 million) the EU contributes to 1) improving Paraguay's external trade performance through the adoption of simplified customs procedures and by providing assistance to overcome technical barriers to trade; and 2) improving the economic integration of three value chains (pork meat, chicken meat and milk derivatives) which have a high market potential and which allow smallholder participation.

Paraguay is also involved in all the regional and thematic programmes for Latin America, the most significant participation being in:

  • Education where more than 20 higher education institutions participate in academic cooperation projects supported by the ALFA programme.

  • Social cohesion with significant implication of Paraguay in EuroSocial related to social policies (labour, equitable access to health services, fiscal education).

  • Renewable Energies as 45 remote communities in Paraguay received photovoltaic kits to provide energy for basic services.

  • Climate Change Investment Projects supported in the framework of the LAIF and implemented by KfW.

EU-Paraguay relations (political and economic)

Relations and cooperation between the EU and Paraguay have intensified during the last years, not only in the development cooperation and trade areas but also through political dialogue aimed at promoting shared values.

The EU deployed an EU Elections Observation Mission (EOM) to Paraguay general elections in 21 April 2013. The EOM report concluded that elections results reflected the democratic will of the Paraguayan people, but also highlighted a number of shortcomings and included detailed recommendations to strengthen the electoral system and deepen democratic practices. The EU attaches a strong importance to the follow-up of the recommendations and will discuss with the new Paraguayan government how to address them in the framework of the EU cooperation with the country.

In order to continue with the process of deepening relations and strengthening cooperation, the EU has also decided to upgrade its presence in Paraguay with the reinforcement of its Delegation to Paraguay and the appointment for the first time of an Ambassador / Head of Delegation based in Asunción. Horacio Cartes paid his first visit as President elect of Paraguay to the EU institutions in Brussels in June 2013, which for the EU highlights the importance that the new government attaches to its relations with the EU. Trade relations with Paraguay are good. Imports from Paraguay into the EU are dominated by agricultural products and crude materials (92%) and benefit from the EU General System of Trade Preferences (GSP). Imports of meat were interrupted after the 2011 foot and mouth disease (FMD) outbreak. Bilateral trade has increased over the last few years. Between 2008 and 2012, the average annual growth of trade was 15.3%. During that period, imports from Paraguay have increased on average 17.8% while EU exports to Paraguay have grown by 11%. Paraguay remains however a modest trading partner with the EU (ranking 95th in 2012). In 2012, the EU was the fourth major trading partner of Paraguay after Brazil, China and Argentina.


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