Paraguay open to China trade deals via Mercosur despite Taiwan ties, Pena says

ASUNCION : Paraguayan President Santiago Pena said on Wednesday that he was “fully open” to trade deals with China via South American trade bloc Mercosur, despite his country’s diplomatic ties with Taiwan.

Paraguay’s long-standing diplomatic support for Taiwan has hindered local farmers’ grains exports to China, which claims sovereignty over the self-governed island. Paraguay is the last South American country with formal relations with Taiwan, which strongly objects to China’s sovereignty claims.

Mercosur, a customs union also including Brazil, Argentina and Uruguay, has been in talks to finalize a long-awaited trade deal with the European Union, but has also discussed a potential trade deal with China.

“Our position with China is one of total openness,” Pena said of Paraguay’s position within Mercosur, adding that the obstacle was rather China not accepting its recognition of Taiwan. “We are in favour of advancing trade agreements,” he added in the interview with Reuters.

Mercosur officials held a dialogue with Chinese counterparts on Aug 12 in Uruguay’s capital.

“I see prudence on Brazil’s side,” Pena said of the possible China agreement, which he emphasized that he supported. “I think that the most interested is Uruguay and we accompany this effort to have a conversation as a bloc.”

China’s foreign ministry and the Chinese embassy in Uruguay did not immediately reply to a request for comment.