Paraguay’s leader defended his nation’s diplomatic ties with Taiwan and held up the Asian economy’s shift from agriculture to manufacturing as a model to follow, resisting domestic pressures to align with China instead.
(Bloomberg) — Paraguay’s leader defended his nation’s diplomatic ties with Taiwan and held up the Asian economy’s shift from agriculture to manufacturing as a model to follow, resisting domestic pressures to align with China instead.
Paraguay and Taiwan have deep cultural and economic links and over six decades of diplomatic relations that the South American country has no intention to break, President Santiago Peña said in an interview in New York on Tuesday, when he delivered his first speech at the UN General Assembly.
He also said Paraguay should imitate Taiwan, home to the world’s largest chipmaker, in becoming an industrial “world power.”
“Taiwan’s experience is very good,” the president said. “Certainly we share some similarities — we’re next to big, complicated countries like Argentina and Brazil.”
Paraguay is one of only 13 countries to maintain full diplomatic relations with Taiwan, a self-ruled democracy that China claims as part of its territory.
Read More: Paraguay Is Open to China Investment, Finance Minister Says
China has steadily picked off Taipei’s diplomatic allies in Latin America amid rising tensions with the US. Panama, El Salvador and the Dominican Republic ended links with Taiwan and switched to Beijing in recent years, with Honduras doing the same earlier in 2023. Beijing is now a top trading partner of many countries in the region and a major investor in mining, agriculture and infrastructure.
Peña, 44, took office last month after a presidential campaign where his country’s long-standing alliance with Taiwan was debated, with business groups and political rivals arguing that Paraguay was losing opportunities for not switching to China.
Read More: US, Taiwan Must Invest More in Paraguay, Peña Diplomat Says
Taiwan’s last South American ally is heavily dependent on soybean and beef exports, which local producers can’t sell directly to China given their lack of diplomatic relations. China has a huge trade surplus with the landlocked nation, selling it goods worth more than $4.2 billion last year.
Peña said Chinese companies are free to operate in Paraguay without restrictions. “For us there’s no impediment today,” he said. “Our relationship with Taiwan dates back 66 years and there’s no plans to break that relationship, but we’re not rejecting the importance of the Asian giant to deepen our trade even more.”
Argentina Conflict
Separately, the Paraguayan leader is facing early tensions with Argentina over its neighbor’s decision to charge a transit fee for barge traffic over the Parana river, a key exit to export Paraguayan goods through the Atlantic Ocean.
Argentina is violating the treaty that governs the river’s navigation, Peña said, after saying earlier this month that his government will seek arbitration and separately sue its southern neighbor before a regional tribunal over the’ decision.
The treaty, which was signed six decades ago, needs to be modernized to improve the waterway’s navigability and maximize trade opportunities, he also said.
–With assistance from Shery Ahn and Jenni Marsh.
(Adds dispute with Argentina as last three paragraphs.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.