Paraguay vows to uphold Taiwan ties amid growing Chinese influence in Latin America

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TAIPEI, TAIWAN — Paraguayan Foreign Minister Ruben Dario Ramirez Lezcano said Friday the country remains committed to diplomatic ties with Taiwan despite farm sector calls for it to switch to having formal relations with China.

At the same time, Ramirez Lezcano said his government is open to establishing trade and other relations with Beijing as long as it would not have to break off its ties with Taiwan. Paraguay is one of only 12 countries maintaining diplomatic relations with Taiwan — and the only one in South America.

“Paraguay is open to establishing diplomatic, consular or commercial relations with China without conditions,” Ramirez Lezcano told VOA and five other U.S. news organizations.

“We are still committed to supporting the Taiwan government, and we don’t accept any condition to break our relations with Taiwan,” he said.

Paraguay has been seeking to gain access to the Chinese market though a trade deal between Beijing and the South American Common Market, known by its Spanish initials Mercosur, which includes countries such as Argentina, Brazil, Bolivia and Uruguay as well as Paraguay.

“Our position with China is one of total openness,” said Paraguayan President Santiago Pena during an August interview with Reuters. “We are in favor of advancing trade agreements.”

However, talks toward a China-Mercosur trade deal have so far been frustrated by disagreements among the Mercosur members and China’s insistence that any country seeking relations with Beijing must renounce its diplomatic recognition of Taiwan.

'Principles and values' matter, too

Ramirez Lezcano reiterated Friday that economic benefit is not the only consideration for Paraguay when deciding whether to maintain diplomatic relations with any country.

“The most important factors are principles and values, rather than just trade and money,” he said.

Analysts say Paraguay’s recognition of Taiwan is not the only obstacle to a China-Mercosur trade deal. There are also fears by some countries within the bloc about overreliance on China and the impact that a deal would have on their own industries.

Kung Kwo-Wei, a Latin American affairs expert at Tamkang University in Taiwan, noted that Brazil imposed new tariffs In October on Chinese and other Asian imports such as iron, steel and fiber, describing the move as an effort to combat dumping and protect Brazil’s domestic industries.

“Mercosur can only sign a free-trade agreement with China if all member states approve the proposal, but so far, there is no consensus among all member states because Brazil remains cautious about the move,” said Su Yen-pin, an expert on Latin American affairs at National Chengchi University in Taiwan.

“Since Paraguay has repeatedly said it won’t sever diplomatic ties with Taiwan in exchange for signing trade deals with China, that makes it impossible for Mercosur to approve the free-trade agreement with China anytime soon,” he told VOA by phone.

China has repeatedly emphasized that Taiwan is an inalienable part of China and urged Paraguay to “follow the trend of history.”

“We hope the government and leader of Paraguay will follow the trend of history, meet the aspiration of its people, stand on the right side of history as early as possible, join the overwhelming majority of the international community, and make the right decision that serves the fundamental and long-term interests of the country,” Chinese Foreign Ministry spokesperson Mao Ning told reporters in August.

Trade with Taiwan

While Paraguay is unlikely to sign trade deals with China anytime soon, experts say Taiwan faces pressure to increase its imports from Paraguay and its investments there.

“Members of the Paraguayan Congress tend to discuss the benefits for Paraguay to maintain ties with Taiwan, and there is an increasing sense among Paraguay’s agricultural businesses that they are losing a lot of economic benefits from maintaining ties with Taiwan,” said Fabricio Fonseca, an assistant professor of diplomacy at Taiwan’s National Chengchi University.

He said that while Taiwan continues to increase its imports of beef and other agricultural products from Paraguay, farmers in other Mercosur states want the greater access to the China market a trade deal would offer, contributing to the pressure on the Paraguayan government.

“Every once in a while, not only during election cycles, we see these push to discuss the topic of Paraguay’s relations with Taiwan in the Congress, and this will continue to affect bilateral ties between Taiwan and Paraguay,” Fonseca told VOA by phone.

Paraguay has also been seeking more Taiwanese investment. Ramirez Lezcano said Asuncion is trying to attract more Taiwanese investments in the high-tech sector.

“Taiwan is establishing an industrial park in Paraguay, and we are working to establish a technological ecosystem with Taiwanese companies,” he told the reporters Friday.

While Taiwan has sent several trade delegations to Paraguay in recent years, some Taiwanese analysts say the number of Taiwanese businesses investing in Paraguay remains limited.

“Paraguay is geographically far from Taiwan, and Taiwanese businesses often think it’s difficult to ensure a smooth industrial technology transfer to Paraguay,” Kung Kwo-Wei, a Latin American affairs expert at Tamkang University in Taiwan, told VOA by phone.

Despite Taiwan’s limited private sector investment in Paraguay, Kung said the United States and Taiwan are working together to help Paraguay expand its private sector.

“In 2021, Taiwan and the U.S. worked with Paraguay to bolster growth in its renewable energy and electric vehicle sector, and the three countries also jointly established several small business development centers,” he said.

Despite the challenges, Su in Taiwan said Paraguay’s ruling Colorado Party is unlikely to make a major shift.

“Unless there is a regime change in Paraguay’s next election, there won’t be too many opportunities for China to influence the diplomatic ties between Taipei and Asunción,” he told VOA.

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