RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/TPR/G/245 
23 March 2011  
 
(11-1373) 
Trade Policy Review Body Original:  Spanish 
   
 
  
 
TRADE POLICY REVIEW 
 
Report by 
 
PARAGUAY 
 
  
 
Pursuant to the Agreement Establishi ng the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), the policy statement by Paraguay is attached. 
 
 
Note: This report is subject to restricted circ ulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on Paraguay. Paraguay WT/TPR/G/245 
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CONTENTS 
 
  Page 
I. INTRODUCTION................................................................................................................ ..................... 5 
II. MAIN ECONOMIC REFORMS ...................................................................................................... ........ 5 
III. THE ECONOMIC AND TRADE ENVIRONMENT............................................................................... 6 
IV. CURRENT ECONOMIC OUTLOOK................................................................................................... ... 9 
V. DEVELOPMENT OF TRADE NEGOTIATIONS................................................................................... 9 
(i) World Trade Or ganization (WTO)............................................................................................. .9  
(ii) ME RCOSUR.................................................................................................................. ........... 10 
(iii) MERCOSUR and regi onal agreements..................................................................................... 13 
(iv) MERCOSUR and extra- regional agreements............................................................................ 13 
(v) Aid for trade.............................................................................................................. ................ 14 
VI. INSTITUTIONAL AND POLICY FRAMEWORK............................................................................... 14 
(i) Intellectua l prop erty ...................................................................................................... ............ 14 
(ii) Customs regime ............................................................................................................ ............ 15 
(iii) Government procurement ................................................................................................... ...... 16 
(iv) Agriculture ............................................................................................................... ................. 17 
(v) Livestock.................................................................................................................. ................. 18 
(vi) Trade in  services ......................................................................................................... .............. 18 
(vii) Teleco mmunications ....................................................................................................... .......... 18 
(viii) Business  climate........................................................................................................ ................ 19 
(ix) Standards and t echnical regulations ....................................................................................... ... 20 
(x) Hydrocarbons............................................................................................................... ............. 21 
(xi) State-owned enterprises ................................................................................................... ......... 21 
(xii) Electroni c government .................................................................................................... .......... 21 
(xiii) Export promotion ........................................................................................................ .............. 21 
VII. DIRECTIONS OF FUTURE POLICY ............................................................................................... .... 22 
 
 
 Paraguay WT/TPR/G/245 
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I. INTRODUCTION 
1. The economic context over the last five years has been more propitious for Paraguay than 
during the previous five year period.  Developmen ts not only within the country but also regionally 
and at the world level spurred the recovery of its economy at a much faster pace than initially 
foreseen.  This was particularly true in 2010, wh en excellent performance in agricultural production 
went hand in hand with sound macr oeconomic fundamentals, favourable  external financing conditions 
and strong export earnings, particularly from soya beans and beef. 
2. The inflow of foreign exchange from exports fed into increased levels of income in the 
economy, and this situation, together with an  excellent business climate, favourable economic 
expectations and adequate liquidity in the financia l system, led to strong gr owth of domestic demand, 
in terms of both consumption and investment. 
3. The GDP projection for 2010 indicates economic growth of 14.5 per cent over the previous 
year.  This growth rate represents the best economic performance recorded in the historical series that 
began in 1950, the previous record having been set in 1981. 
4. On the supply side, economic performance in 201 0 was influenced by a number of factors, 
including outstanding agricultural output with supe rb harvests for the main crops thanks to good 
climatic conditions in the 2009/2010 crop year, a steady increase in livestock production, excellent 
growth in industry, and a rise in public and privat e construction.  Trade, transport, communications, 
the financial sector and other services also grew unusually vigorously. 
5. On the demand side, domestic demand picked up  strongly, reflected in a high level of 
consumption and investment, boos ted by rising confidence and pos itive expectations among economic 
operators.  External demand responded positively to the high level of exportable supply of Paraguay's 
main export products, such as grain, oilseeds and oilseed products, beef and textiles, among other 
non-traditional goods, the production of which h as been developing within the country. 
6. The strong growth in 2010 also drove up per capita GDP by 12.6 per cent to US$1,6561, 
compared to US$1,471 in 2009.  With this growth rate, per capita GDP grew at an average rate of 
3.7 per cent over the last five years, above the historical annual average of 2 per cent and the average 
for the last ten years of 2.1 per cent. 
7. Paraguay was not greatly affected by the world crisis and recovered faster than expected 
thanks to its sound macroeconomic policy fundamenta ls, favourable external financing conditions and 
strong earnings from raw material exports that shoul d continue to be much in demand externally. 
8. The international economic environment has al so been favourable for this performance.  
For example, the MERCOSUR common market count ries grew at over 7 per cent in 2010, while 
prices for the region's export commodities were ri sing and world interest rates remained low. 
II. MAIN ECONOMIC REFORMS 
9. The present Government has been pushing on with a number of economic reform 
programmes based on draft legislation that has been submitted to the National Congress for 
consideration, such as the draft laws on airport and national highway concessions and on results-based 
budgeting, as well as other laws that have already come  into force, including those on the construction 
of a 500 kV electricity transmission and distributio n line and the extension of the road network. 
                                                      
1 Constant 1994 dollars. WT/TPR/G/245 Trade Policy Review 
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10. The reform of the tax system that w as launched in 2004 through Law No. 2421/04 
"on Administrative Reorganization and Fiscal Adjustme nt" led to an improvement in public finances 
and tax administration.  This in turn led to highe r investment within public spending, focusing on 
social inclusion projects and programmes and an upgrading and expansion of physical infrastructure. 
11. The setting up of the Development Finance Agency (AFD) in 2005 helped to develop the 
medium and long-term credit market, previously virt ually non-existent in Paraguay for first-tier public 
or private financial intermediation institutions, thus enabling credit to expand in a context of falling 
interest rates.  Out of the total resources made av ailable by the AFD, 15 per cent went to agriculture, 
24 per cent to the livestock sector, 15 per cent to ma nufacturing, 10 per cent to micro-enterprises and 
the remainder to the construction sector. 
12. Government efforts to enhance the efficiency and transparency of public sector management 
and reform the priority economic sectors are begi nning to bear fruit and thus will contribute to the 
sustainability of long-term growth.  In partic ular, the new legal framework for government 
procurement helped to streamline and speed-up domestic  and international public procurement.  It has 
also led to more small and medium-sized firms having access to the procurement system, thereby 
widening the system in the context of a mo re formal and competitive bidding process. 
13. In 2010 the Government launc hed a thoroughgoing process of st rengthening fiscal policy and 
budget management by the Ministry of Finance.  One such step has been  the publication of the 
"Report on the Public Finances of the Republic of Paraguay ", which from now on will accompany the 
National General Budget Bill for each financial y ear, with the aim of improving the quality of 
information across the economy and achieving better allocation of resources. 
14. The Government is pursuing structural reforms aimed at sustained and more inclusive and 
equitable growth with a high degree of social respon sibility.  To this end, through the Ministry of 
Finance and in consensus with a number of civil society organizations, it h as emphasized to Congress 
the need to introduce personal income tax in orde r to enhance transparency in the economy and boost 
competitiveness. 
III. THE ECONOMIC AND TRADE ENVIRONMENT 
15. Economic growth has improved significantly in recent years, as a result of both cyclical 
factors and rising productivity.  The macroecono mic stability achieved over the period 2005-2008, 
with average economic growth of 4.9 per cent and an average budget surplus of 1.8 per cent of GDP, 
provided the foundations both for mitigating the imp act of external shocks and for pushing forward 
with structural reforms that will ensure sustained medium-term growth. 
16. In 2009 the Paraguayan economy shrank by 3.8 pe r cent, as a consequence of the global 
economic crisis and above all of a plunge in agricu ltural output owing to the bad climatic conditions 
during 2008 and early 2009.  In contrast, 2010 sa w record levels of agricultural production and 
domestic demand rose close to its potential level, leadi ng to real growth of 14.5 per cent.  This was a 
new record in the country's economic history. 
17. In the area of public finances, from 2004 to 2009 the country had six consecutive years of 
fiscal surplus, a trend which was continued in 2010, with a surplus of 1.6 per cent of GDP. 
18. This positive trend largely stems from the improve ment in receipts, above all from taxation, 
as a result of the reforms introduced in 20 04 under Law No. 2421/04 "on Administrative 
Reorganization and Fiscal Adjustment", affecting both taxation and administration. Paraguay WT/TPR/G/245 
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19. Thus, nominal tax receipts grew at an average 13 per cent annually over the last five years, 
reaching 23 per cent in 2008 and 6.4 per cent in 2009, a remarkable figure for a year of economic recession.  This has also meant that the tax burden rose from 10 per cent in 2003 to 13 per cent in 
2009.  For 2010, receipts are expected to grow by  24 per cent over 2009 by the end of the year. 
20. With regard to monetary policy, macroec onomic developments were underpinned by the 
expansionary measures applied by the Central Bank of Paraguay (BCP) in response to the spectre of 
financial turbulence.  These measures boosted econo mic recovery as from the third quarter of 2009, 
and the growth of the monetary aggregates also refl ected more buoyant domestic demand.  In the last 
quarter of 2010, the various measures of the money supply (M0, M1 and M2) were all rising at 
year-on-year rates of above 20 per cent, a trend th at has continued throughout the current year, and 
reflects the upturn in nominal income in line with the economic recovery. 
21. While monetary policy was clearly expansionary to deal with the crisis, with a reduction in 
placement of monetary instruments and in their yields, once the period of monetary stimulus had 
ended the BCP acted to mop-up liquidity through small increases in the yields of the Monetary 
Regulation Instruments (IRM), indicating a hardenin g of monetary policy.  Thus in November 2010 
the balance of IRMs placed increased by 17.9 per cen t year-on-year, with average yields at 3.87 per 
cent, clearly reflecting the tighter monetary policy. 
22. At a time when the advanced economies remain  vulnerable, international interest rates 
should remain relatively low, while at the local level the vigorous growth in economic activity is 
forcing the BCP to raise its interest rate s, thereby increasing monetary policy costs. 
23. The country's Net International Reserves (NIR) have risen steadily since 2002, from 
US$604 million in November 2002 to US$3,961.4 milli on in November 2010, and currently stand at 
6.5 times the 2002 level.  Prudent fiscal and moneta ry policies have enabled the BCP to secure a 
record level of international monetary reserves.  Thus Paraguay has become more solvent, with a 
NIR/GDP ratio equivalent to about 23 per cent in 201 0.  The current level of NIR represents 1.7 times 
external liabilities;  in other words 100 per cent of th e country's external public debt could be financed 
or covered (an extreme hypothesis) by its reserves. 
24. The external sector strengthened in line with  economic growth during 2005-2008, which was 
partly the result of the good performance of th e agricultural sector, booming prices for the main 
export products, and more vigorous domestic economic activity.  Howeve r, this situation was reversed 
in 2009 as a result of the fall in external demand reflected in lower purchases by Paraguay's main 
trading partners (the MERCOSUR countries), as well as falling commodity prices which led to a 
2.5 per cent fall in the terms of trade.  In 2009 the value of exports and imports fell by 29 per cent and 26.3 per cent respectively in comparison with 2008. 
25. In 2010 the external sector recovered str ongly, largely due to farm-sector growth 
(in particular soya beans thanks to the excellent  weather conditions for the 2009-2010 harvest, and 
livestock production), together with the recovery  of domestic and external demand (with strong 
growth in Brazil).  As a result, total exports in creased by 42 per cent over 2009, and in particular 
exports of soya beans and beef, the country's main export products, soared by 102 per cent and 59 per 
cent, respectively. 
26. Total imports rose by 45 per cent in 2010 over the previous year.  Purchases of capital goods 
and consumer durables rose sharply in November and December with year-on-year increases of 
48 per cent and 49.2 per cent respectively.  Higher purchases of capital goods are a positive sign for WT/TPR/G/245 Trade Policy Review 
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economic growth as they will strengthen agricultura l infrastructure and hence the competitiveness of 
the productive sector. 
27. The terms of trade for December 2010 showed a year-on-year improvement of 7.4 per cent, 
caused by a higher rise in the export price index th an in the import price index, with increases of 
14.2 per cent and 5.2 per cent, respectively, in the month of November.  The upturn in world prices 
for soya beans and beef were the ma in factors behind this improvement. 
28. The exchange rate was relatively stable over the period 2005 2008, with an annual average 
appreciation of 7.4 per cent in line with the depreciation of the dollar against the other major currencies and particularly the euro and the Japan ese yen on world markets.  The effective real 
exchange rate appreciated somewhat less, in the order of 5 per cent annually on average, basically 
caused by the real depreciation of the dollar, euro and yen. 
29. Total public debt has been shrinking as a per centage of GDP since 2003, when it stood at 
almost 52 per cent, falling to its lowest level in 2008 at barely 15.4 per cent of GDP.  It increased in 2009 but by the end of 2010 had fallen to just 13.3 per cent.  It should be stressed that the 
net debt/GDP level is below the 25 to 30 per cent threshold established by the International Monetary 
Fund. 
30. The financial and banking system did not expe rience the negative effects that might have 
been expected, largely because the economic author ities reacted appropriately to the crisis with 
suitable counter-cyclical policies.  In this contex t, the banking system is quite sound, with a steady 
growth of credit to the private sector and a con tinuing rise in deposits, a low level of non-performing 
assets and low average interest rates compared with historical levels, an indicator reflecting the higher 
expectations of economic operators. 
31. A breakdown of credit in October 2010 indicates that 58.8 per cent of loans to the private 
sector were in the national currency, and 41.2 per ce nt in foreign currency.  As for the breakdown of 
deposits, in October 2010, 57.1 per cent of total de posits in the banking system were in the national 
currency, and 42.9 per cent in foreign currency.  Th is public predilection for the domestic currency is 
a result of the de-dollarization of the economy, primarily due to the consolidation of the banking 
system and rising confidence of economic  operators in the national currency. 
32. In response to the economic recession between 2008 and 2009, the Government 
implemented an expansionary fiscal policy, with pu blic spending rising by 28 per cent in comparison 
with 2008, the equivalent of 3.8 per cent of GDP.  Ph ysical investment grew in nominal terms by an 
unprecedented 92 per cent.  The economic recovery  plan was aimed at safeguarding jobs and 
sustaining domestic industry.  Transfers totalling US$40 million went to local authorities for labour-intensive investment, along with lending for micro, small and medium-sized enterprises and small family farms.  To protect the poorest, conditional monetary gr ants were made to 
112,700 families, compared with only 13,900 in 2008. 
33. All this was achieved while preserving a balance in  public finances, with a fiscal surplus of 
0.1 per cent of GDP in 2009, helped by a rise in tax receipts of 6.4 per cent despite the economic 
recession.  The country's financial situation rema ined sound, with international reserves equal to 
26 per cent of GDP, an external debt/GDP ratio equal of about 16 per cent, and an inflation rate of 
only 1.9 per cent. Paraguay WT/TPR/G/245 
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IV. CURRENT ECONOMIC OUTLOOK 
34. The economic outlook for Paraguay at the cl ose of 2010 is highly encouraging.  After 
shrinking by 3.8 per cent in 2009, due to the impact of the international financial crisis and especially 
the adverse weather conditions that plagued the ag ricultural sector, in 2010 the economy posted real 
growth of 14.5 per cent, the highest rate in the region and the highest for the country since 1981. 
35. Inflation reached 7.2 per cent in 2010.  The strong recovery of do mestic demand, growing 
above its potential level, and excess liquidity in  the system exerted upward pressure on prices.  
The inflation projection for 2011 is 7.3 per cent, at the upper end of the target  range, in a context of 
exchange-rate stability and favourable commodity prices. 
36. The exchange rate remained relatively stable during 2010, with an average appreciation of the 
guaraní against the dollar of 4.6 per cent with respect to 2009.  A slight appreciation of 0.7 per cent is forecast for 2011. 
37. The growth rate is expected to slow down slightly in 2011, to a rate of 4 per cent, in line with 
the average figure for the last 10 years.  Neverthe less, given macroeconomic stability and continuing 
low world interest rates, if the large portfolio of both public and private sector investment projects is 
fulfilled, the economy will receive a significant boost. 
38. At the international level, the factors that enabled Paraguay's economy to grow are expected 
to continue to follow the 2010 trend, with fa vourable growth forecasts for the developed and 
emerging economies over the coming years. 
39. The economic policy scenario holds a new chal lenge in the medium term:  after the 
2009 crisis and with solid recovery in 2010, th e focus must be on medium-term objectives.  The 
foundations must be laid for sustainable economic gr owth with a reduction in poverty and inequality.  
Now that macroeconomic stability has been achie ved, with sound public finances and monetary 
policy geared to a target of low and stable infl ation, it will be necessary to address the structural 
changes that are needed, increasing public investment and encouraging private sector investment in 
the economic sectors where productivity is low. 
V. DEVELOPMENT OF TRADE NEGOTIATIONS 
40. Paraguay's participation in the various intern ational trade negotiation forums is geared 
towards expanding and securing effective access to markets for its exportable supply, attracting 
investment and participating actively in technical  assistance and coopera tion programmes aimed at 
achieving effective and equitable inte gration in international trade. 
(i) World Trade Organization (WTO) 
41. Paraguay supports a rapid conclusion of the D oha Round.  As a landlocked country with a 
small, vulnerable and primarily agricultural econom y that depends on a few export products, it views 
trade and the Doha Round as the p illars of economic rec overy and poverty reduction in developing 
countries.  For Paraguay, the development dimension c onsists in paying due attention to the issues of 
importance to developing countries. 
42. Paraguay's main objectives in the Doha Round incl ude in particular greater liberalization of 
agricultural trade.  Gaining effective access to the markets of both deve loping and developed 
countries is important for Paraguay, through the elim ination of trade-distorting measures, in order to WT/TPR/G/245 Trade Policy Review 
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enable all countries, and especially developing countries,  to rely on fair and equitable rules that would 
favour their participation in world trade. 
43. At the same time, special and differential tr eatment for developing economies is a crucial 
aspect of Paraguay's foreign policy and is raised in a ll of the international nego tiations to which it is a 
party.  Because of its geographical situation, Para guay has high transports costs for the import and 
export of goods, and these costs are detrimental to  the competitiveness of its domestic production.  
Improved customs and port procedures at home and in the transit countries and a more efficient 
transport infrastructure are essential to overcoming this obstacle. 
44. Trade facilitation is another issue of national in terest in the ongoing negotiations, given that 
Paraguay's landlocked status jeopardizes the comp etitiveness of domestic production.  Paraguay is 
therefore seeking a binding legal instrument that w ill help to streamline trade,  eliminate the obstacles 
that make trade more costly, and facilitate the sm ooth transit of goods.  In the negotiations there 
should be no backsliding from the level of amb ition in Article V of the GATT 1994 on Freedom of 
Transit. 
45. Another concern for Paraguay centres on th e special needs of landlocked developing 
countries, which is why it plays an active part as th e group's trade coordinator, calling for the effective 
implementation of the "Aid-for-Trade" initiative to meet the special needs of the group's member 
countries. 
46. The recent economic and financial crisis and the current shaky recovery are grounds for 
continuing concern about protectionism, whether in the form of monetary, financial or trade measures.  
Paraguay therefore supports the implementation of pe rmanent monitoring mechanisms to ensure that 
such measures do not spread or take root.  It also  hopes that the Doha Round  negotiations will not be 
impaired by any spirit of protectionism that woul d lessen the ambition of earlier agreements or give 
up the gains already achieved in the current negotiations. 
(ii) MERCOSUR 
47. MERCOSUR continues to be the main destinati on of Paraguay's exports and the main origin 
of its imports.  This has been true ever since the el imination of tariffs within the zone which gave rise 
to the expanded market about halfway through  the 1990s.  Between 1994 and 2009, exports to 
MERCOSUR accounted for 53 per cent on average of  the total, with imports from MERCOSUR 
accounting for 50 per cent.  The favourable econom ic context in 2010 boosted the growth of 
Paraguay's foreign trade, with both exports and impor ts posting historically high values and unusually 
strong growth rates. 
48. MERCOSUR is Paraguay's main objective in terms of regional in tegration and its 
main platform for the negotiation of extra-re gional agreements.  In the period under review, 
integration has made considerable headway. 
49. The MERCOSUR Customs Code was adopted by Decision CMC No. 27/2010.  This 
establishes a common legal framework for the ha rmonization of the member countries' customs 
procedures.  It also represents a step forward in consolidating the Customs Union, as well as its 
relations with other countries. 
50. In the same context, the negotiations on the "elimination of double levying of the common 
external tariff (CET) and distribution of custom s revenue" remain a key issue for MERCOSUR.  
The negotiations established the principle whereby imported goods from the rest of the world that 
have fulfilled the conditions set by the CET polic y will receive the same treatment as originating Paraguay WT/TPR/G/245 
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MERCOSUR goods both as regards movement within th e territory of member States and for inclusion 
as inputs in production processes.  The implementati on of this principle has begun with the adoption 
of Decision No. CMC 0/10, which lays down guidelines for the elimination of double levying of the CET in accordance with a three stag e process.  It also provides for compensation for Paraguay in the 
distribution of customs revenue on the grounds of its special and specific status as a landlocked 
country. 
51. Paraguay's tariff policy has consisted in a pplying low and uniform customs duties.  
The weighted average import duty applied to goods originating outside the MERCOSUR zone 
decreased from 4.8 per cent in 2004 to 2.8 per cent in  2008, with a slight increase as of 2009 to reach 
3.25 per cent in 2010, in keeping with Paraguay's historical policy of openness to the international 
community of nations.  The agreements on exceptio ns concluded in the framework of MERCOSUR, 
which permit the maintenance of tariffs exem pted from the MERCOSUR Common External Tariff, 
have been a fundamental part of this policy. 
52. A major step for MERCOSUR was the "MER COSUR Structural Convergence Fund 
(FOCEM)", which finances projects promoting stru ctural convergence, competitiveness and social 
cohesion, particularly for the zone's smaller economies and less-developed regions.  The Fund was 
set up in 2006 and is MERCOSUR's first financia l instrument of this kind aimed at reducing 
asymmetries within the zone.  It consists of non-re fundable financial contributions by member States 
totalling US$100 million annually. 
53. With regard to production activities and processes, MERCOSUR adopted 
Decision CMC No. 12/08 approving the "MERCOSUR Productive Integration Programme", aimed at 
strengthening the complementarity of productio n of MERCOSUR enterprises.  The Programme 
focuses on the integration of production chains of small and medium-sized enterprises and on those of 
the relatively smaller economies in order to deepen the zone's integration, boosting member countries' 
competitiveness and their potential for integration into the world economy. 
54. With regard to the MERCOSUR dispute settle ment system, following the adoption of the 
"Olivos Protocol for the Settlement of Disput es among MERCOSUR States Parties", further steps 
have been taken to develop MERCOSUR's instituti onal arrangements in this area.  A permanent 
review tribunal based in Asunción has been set up to  "ensure the proper interpretation, application and 
fulfilment of the fundamental instruments of th e MERCOSUR integration process and its rules in a 
consistent and systematic manner". WT/TPR/G/245 Trade Policy Review 
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55. Decision CMC No. 23/05, which provides for the signing of the Constitutive Protocol of the 
MERCOSUR Parliament as the independent and au tonomous organ for the representation of its 
peoples, was adopted in 2005.  According to th at Decision, as of 2014 the MERCOSUR Parliament 
will consist of representatives elected by universal, direct and secret suffrage. 
56. Decision CMC No. 03/07 deals with the social di mension of the integration process.  It set up 
the MERCOSUR Social Institute, whose general objec tives are:  to contribute to strengthening the 
social dimension as a fundamental part of MERCO SUR development;  help to overcome asymmetries 
from the social standpoint;  cooperate in the technical  design of regional social policies;  systematize 
and update regional social indicators;  compile and exchange good practices in the social area;  and 
promote horizontal cooperation mechanisms and iden tify sources of financing.  The Institute's 
permanent headquarters are in Asunción. 
57. With respect to common tr ade policy, Paraguay has made important gains at the 
MERCOSUR level.  The treatment of asymmetri es in MERCOSUR allowed Paraguay to consolidate 
measures enabling it to participate in a more balanc ed manner in the integration project.  These gains 
include the following decisions of the MERCOSUR Common Market Council:  Decision MC No. 1/09 on the MERCOSUR rules of origin, Decision CMC No. 58/10 on the Common External Tariff, Decision CMC No. 59/10 on special import regimes, and Decision CMC No. 57/10 on capital goods and on information t echnology and telecommunications goods. 0 2 4 6 8 10 12 14 16 
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20090100020003000400050006000700080009000
TOTAL IMPORTS (right axis)  APPI APPE APP  Weighted Average Tariff (%) and Imports
Per cent (%)  US$ million FOB
Note: APPI:  Average tariff  weighted by imports from MERCOSUR.  APPE:  Average tariff weighted by non-MERCOSUR 
imports.  APP:  Average tariff  weighted by  total imports. 
 
Source : Ministry of Finance  Paraguay WT/TPR/G/245 
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(iii) MERCOSUR and regional agreements 
58. Since its creation in 1991, MERCOSUR has si gned a number of free trade agreements and 
partial scope agreements in the framework of the Latin American Integration Association (LAIA).  
Thus, in 1996 it signed Economic Complementarity  Agreement No. 35 with Chile, and Economic 
Complementarity Agreement No. 36 with Bolivia, for the creation of a free trade zone between them.  
MERCOSUR signed Economic Complementarity Agreement No. 59 with Colombia, Ecuador and Venezuela in October 2004, and Economic Comple mentarity Agreement No. 58 with Peru in 
November 2005. 
59. In July 2002, MERCOSUR and Mexico signe d Economic Complementarity Agreements 
Nos. 54 and 55.  The former estab lishes the basis for the negotiati on of a free trade area between the 
parties.  The latter provides for free trade in the automotive and auto-parts sector following a 
transition period negotiate d bilaterally between Mexico and each of the MERCOSUR States Parties. 
60. In 2006, MERCOSUR signed Economic Complementarity Agreement No. 62 with Cuba in 
order to boost trade between the parties by reduci ng or eliminating the existing customs duties and 
other restrictions.  The agreement also includes pr ovisions relating to rules of origin, safeguards, 
technical standards and regulations, dispute settle ment and sanitary and phytosanitary measures. 
61. In addition to the agreements signed by MERCOSUR, in 2008 Paraguay and Venezuela 
signed Economic Complementarity Agreement No . 64, a partial scope agreement under which 
Venezuela grants Paraguay unilateral trade prefer ences, in particular for agricultural products. 
(iv) MERCOSUR and extra-regional agreements 
62. High on the current external relations agenda for MERCOSUR, and for Paraguay as one of its 
members, are the ongoing negotiations with the European Union.  MERCOSUR is negotiating a 
bi-regional association agreement with the EU, a process that was given new impetus by the 
May 2010 Summit of Heads of State and Governme nt of Latin America and the Caribbean and the 
European Union.  Both parties are committed to seeking an ambitious, comprehensive and balanced 
agreement to be concluded during 2011. 
63. Other negotiations have also been undertaken on the external relations front.  Together with 
the other MERCOSUR countries, Paraguay si gned framework trade agreements with 
India (June 2003), South Africa (December 2004)
2, Egypt (July 2004), Morocco (November 2004), 
the Gulf Cooperation Council (2005), Jordan (2008), Turkey (2008), Syria (2010) and the Palestinian Authority (2010). 
64. On 25 January 2004 MERCOSUR signed a Fixed Preferences Agreement with India that 
came into force on 1 June 2009.  The agreement contains 450 tariff lines for India and 452 for MERCOSUR, and was notified to the WTO on 11 J une 2009.  Negotiations are currently under way 
with a view to extending a nd deepening these preferences. 
65. On 18 December 2007 MERCOSUR and Israel signed a free trade agreement that includes 
chapters on rules of origin, safeguards, technical regulations, conformity assessment standards and 
procedures, sanitary and phytosanitary measures, di spute settlement and technical and technological 
cooperation.  The agreement comes into force bilate rally 30 days after the Depositary has announced 
                                                     
 
2 Subsequently joined by other members of the Southern African Customs Union (SACU), namely 
Botswana, Lesotho, Namibia and Swaziland. WT/TPR/G/245 Trade Policy Review 
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receipt of the two first instruments of ratification, pr ovided Israel is one of the signatory parties that 
has done so.  It entered into force for Paraguay and Israel on 24 March 2010. 
66. MERCOSUR and Egypt signed a free trade ag reement on 2 August 2010.  The agreement 
includes chapters on the definition of originating g oods, preferential safeguards and the settlement of 
disputes, among others.  The agreement will enter in to force 30 days following the notification to the 
Depositary of each of the instruments of ra tification of the last signatory party. 
67. MERCOSUR and the Southern African Custom s Union (SACU) have concluded a fixed 
preferences agreement.  MERCOSUR signed it in December 2008 and SACU (Botswana, Lesotho, 
Namibia, South Africa and Swaziland) in April 2009 .  Paraguay has begun the process of ratification 
of this agreement.  It will enter into force 30 days  after all the signatory parties have formally been 
notified of the conclusion of the corres ponding internal ratification procedures. 
68. A free trade agreement is currently  being negotiated with Jordan. 
(v) Aid for trade 
69. Paraguay regards internationa l cooperation as a fundamental tool for overcoming the 
limitations stemming from its historical and geog raphical status, the size of its market and the 
characteristics of its production system.  The presen t favourable economic climate has not yet enabled 
it to remedy its vulnerable features or to diversify its economy. 
70. For a landlocked country like Paraguay, Aid fo r Trade, although limited in scale, has brought 
successful results through proj ects such as those for strengthe ning the competitiveness of the 
Paraguayan export sector, the Single Window for Exports, and the National Export Plan, among 
others. 
71. Support for the development of Paraguay's infrastructure, in terms of both transport and 
networks, is a priority and calls for a high volume of financing.  Such finance is not always available 
or could lead to a risky level of debt for a sma ll economy.  Greater access to international finance 
would help reduce the costs stemming from its  position as a landlocked country and promote 
diversification of its productive structure. 
VI. INSTITUTIONAL AND POLICY FRAMEWORK 
(i) Intellectual property 
72. Government policies have included major efforts to adjust the country' s regulatory framework 
in order to improve the intellectual property regime and bring it into line with modern requirements 
by strengthening and modernizing it and making it more transparent. 
73. Pharmaceutical products have been patentab le since 1 January 2005, in accordance with 
Law No. 2047/02 "Amending Article 90 of Law No. 1630/00 on Patents".  Legislation has been 
passed to protect undisclosed information, in the form of Law No. 3283/07 "on Protection of 
Undisclosed Information and Test Data for Ph armaceutical Registration" and Law No. 3519/08 
"on Protection of Test Data requested by the Health Authority for the Approval of Phytosanitary 
Products". Paraguay WT/TPR/G/245 
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74. A draft decree containing the implementing regula tions for the Patents Law is in the process 
of being approved.  The Patents Office is drafti ng patenting guidelines together with national and 
international private-sector pharmaceutical associations. 
75. Considerable efforts have been made to improve  enforcement of intellectual property rights.  
The Government has submitted a draft amendment to  Article 184 of the Criminal Code, approving 
Law No. 3440/08 raising the maximum term of impr isonment for intellectual property offences to 
eight years.  The specialized unit of the Office of  the Public Prosecutor dealing with intellectual 
property offences has been reorganized and its power s extended to cover the entire national territory 
under resolution FGE No. 2.402/10 issued by the Attorney-General. 
76. Presidential Decree No. 5.446 of 17 Septembe r 2010 was issued "Amending and partially 
rescinding Decree No. 527/03 establishing the Specialized Technical Unit to support institutional efforts to formalize the economy, and repealing Supplementary Decree No. 3.364/04".  All these 
legislative modifications are part of a set of stra tegic policies on compliance with and enforcement of 
intellectual property rights. 
(ii) Customs regime 
77. Law No. 2.422/04 deals with the treatment of internationally traded goods.  The regulations 
and requirements of the various regimes are clearly set out in this law, which constitutes Paraguay's 
Customs Code.  The wide range of regimes provi ded allows international traders to choose the 
one that best suits their purposes or the na ture, quality and quantity of the imported goods. 
78. The Single Window for Imports (VUI) is an electronic tool established by the Government to 
enable the various bodies concerned by import activities to  interact, in real time, and in a coordinated 
manner, with the National Customs Directorate in the processing of licences, permits and certificates, 
using an Internet-based electronic management system .  This initiative is part of an international 
cooperation programme that includes a component  designed to strengthen the National Customs 
Directorate, with the aim of facilitating foreign trade procedures, improving internal controls and 
combating evasion and corruption. 
79. This new system cuts the time required for customs procedures involving other bodies, as 
well as processing costs, and improves control.  It is combined with the Sofia computerized system 
for transparency and management of procedures invol ving authorization before or after clearance of 
imported goods, identifying all the ac tors involved.  This all leads to  greater reliability of the whole 
process. 
80. The Single Window for Exports (VUE) has been fully operational since 2006.  It provides 
exporters with an electronic, traceable and tran sparent tool for the simplification of non-customs 
export procedures involving customs and other trade-re lated bodies.  It has greatly simplified all these 
procedures, cutting both the time and the number of steps involved by about 90  per cent in all cases. WT/TPR/G/245 Trade Policy Review 
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Table 
Results obtained 
National Register of Exporters 
 Reduction in the number of steps 
per procedure Number of paper documents Processing time (hours) 
From 12 steps x 11 bodies 24  72 (average per body)  
To 1 step x 1 body (MIC) 8  2  
%-Reduction 99.24 66.67 97.22 
Beef export procedures 
 Reduction in the number of steps 
per procedure Number of paper documents Processing time (hours) 
From 32 16 240 
To 3 4 3 
%-Reduction 90.62 75.00 98.75 
Origin certificate export procedures 
 Reduction in the number of steps 
per procedure Number of paper documents Processing time (hours) 
From 24 8 72 
To 1 2 1 
%-Reduction 95.83 75.00 98.61 
Raw materials and inputs import procedures 
 Reduction in the number of steps 
per procedure Number of paper documents Processing time (hours) 
From 22 8 72 
To 3 3 2 
%-Reduction 86.36 62.50 97.22 
Plant and plant product export procedures 
 Reduction in the number of steps 
per procedure Number of paper documents Processing time (hours) 
From 16 8 72 
To 2 3 2 
%-Reduction 87.50 62.50 97.22 
Wood and wood products export procedures 
 Reduction in the number of steps 
per procedure Number of paper documents Processing time (hours) 
From 16 8 68 
To 3 3 2 
%-Reduction 81.25 62.50 97.06 
 
(iii) Government procurement 
81. Law No. 3439/07 has brought positive changes in the legal framework governing 
government procurement.  The State Suppliers Scheme (SIPE) has been established and put into practice.  A complaints system that protects complain ants, a system of direct payment of suppliers for 
central government entities, and an electronic rever se-auction system have all been established and 
implemented.  The government procurement webs ite was updated in 2009/2010, and a system to 
support micro, small and medium-sized enterp rises has been set up and put into effect. 
82. Procurement booths have been installed in all local and municipal authority offices 
throughout the country and a Centre specifically catering for municipalities has been set up.  
Continuing campaigns on government procuremen t have been promoted, and a government 
procurement policy adopted.  Mandatory standard tender documents have been drafted and brought 
into force, and are under permanent review.  A syst em of public hearings has been introduced for the 
analysis of the terms and specifications of tender do cuments prior to their publication.  The Contract 
Inspection Directorate was set up to check on contract  performance.  Internal and external training has 
been carried out, and the cataloguing system for goods and services has been improved. 
83. Mechanisms to promote domestic goods and empl oyment have been established for all types 
of procurement.  Agreements have been signed with the private sector to facilitate technical Paraguay WT/TPR/G/245 
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verification of invitations to tender.  Procurement deadlines have been shortene d in order to make the 
system more efficient. 
84. Use is made of information bulletins and news  on invitations to tender can be received 
through text messaging.  Government procurement h as been standardized and made more transparent.  
Direct transmission of tender documents via the Inte rnet has been made systematic, thus eliminating 
distance and shortening the time required for procurement procedures. 
(iv) Agriculture 
85. The Government is currently introducing changes in the organization and operational 
structure of the Ministry of Agriculture and Li vestock (MAG), the main public body in the 
agricultural sector, in order to improve the efficiency with which it fulfils its basic roles and so that it 
can respond to the current and future realities of the sector. 
86. As a part of this process, two new independe nt entities were created with legal personality 
under public law, and with their own resources:  the National Forestry Institute (INFONA) and the 
Paraguayan Agricultural Technology Institute (IPTA ), which replace operational units that existed 
within the MAG. 
87. The National Forestry Institute was set up by  Law No. 3.464/08 of 6 May 2008, with the 
purpose of carrying out the functions provided for in  Law No. 422/73 and other forestry related legal 
provisions that are currently in force. 
88. The Paraguayan Agricultural Technology Institute was set up under Law No. 3.788/10 of 
21 May 2010.  The law brings together all the MAG directorates responsib le for research and 
technology transfer in the plant, animal and for estry fields.  Its aim is to develop research and 
technology programmes to raise agricultural and forestry productivity and thus make these products more competitive on domestic and export markets. 
89. The Government of Paraguay believes firmly in  free international trade, and relies on the 
multilateral trade rules and their capacity to provi de an ideal framework for the generation and 
development of productive activities.  It will therefor e continue to deepen its economic integration in 
MERCOSUR and to participate actively in the WTO negotiations to ensure that the developing and 
least developed countries are able to participate in  international trade and investment on a fair and 
equitable basis. 
90. The Government of Paraguay attaches great importa nce to agriculture and to the three pillars 
of the multilateral agricultural negotiations (market access, export subsidies and domestic support) in 
achieving true liberalization and reform of the agricultural market.  Progress in opening-up the 
agricultural sector to truly competitive conditions is  crucial to the success of the Development Round.  
Paraguay is working closely with its counterpart s from the G-20 countries and the Cairns Group, and 
with all interested parties, to bring the Round to a successful outcome. 
91. Paraguay's agricultural economy is one of the most open in Latin America, although it is 
small and relies on an export-production model fo cused on a few agricultural products.  State 
intervention in agricultural policy is confined to a few instruments:  reference prices are occasionally 
established for certain products, but have no gr eat budgetary impact.  There are no guaranteed 
minimum prices requiring government purchases, nor are there any price bands.  Paraguay does not even have any "exchanges" for the marketing of agricultural products.  The only specific cases of 
State intervention in the form of permitted domes tic support - i.e. "green box" - in the area of 
general services and food security and aid progra mmes, apart from certain development measures, are WT/TPR/G/245 Trade Policy Review 
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geared towards assisting small producers in emergenc y situations arising from adverse climatic and 
economic conditions. 
92. The Strategic Framework for Agriculture estab lishes the guidelines for sectoral policies and 
promotes sustainable agricultural development with  five strategic priorities:  development of 
family farming and food security, enhancing competitiveness, sectoral adjustment and MAG 
restructuring, agro-energy development and livestock and farming development. 
(v) Livestock 
93. The dynamism of the livestock and especially b eef sector is based on public-private alliances, 
strengthening the institutions of both sectors.  To support small producers, the MAG launched the 
National Livestock Development Programme (PRONAFOPE), primarily  to ensure food supplies for 
rural families and also to develop income-genera ting products.  A national plan for the development 
of sustainable aquaculture was also established, w ith eight areas of action for developing this sector, 
and in 2011 work will be carried out on a nationa l plan for the development of the dairy industry. 
(vi) Trade in services 
94. The services sector has assumed greater importa nce for national economies, accounting for a 
steadily larger share of GDP, and is increasingl y included in international trade negotiations. 
95. On 14 April 2010 the Government adopted Decr ee No. 4201 "Creating the National Services 
Forum".  The purpose of the Forum is to identify and prioritize the sectors and subsectors likely to 
generate employment, and point the way for better regulation and promotion of the development of 
this sector. 
96. As a member of MERCOSUR, Paraguay plays an  active part in international negotiations 
both within the zone and with other countries with  which negotiations are currently under way, such 
as the European Union and Colombia .  As a member of the Latin American Integration Association, 
Paraguay is participating in nego tiations on trade in services under Trade and Economic Agreements:  
ACE No. 59MERCOSUR-Colombia and ACE No . 35 MERCOSUR-Chile, which has now been 
concluded. 
(vii) Telecommunications 
97. The Internet Access and Data Transmission Services Regulation (Resolution No. 190 of 
11 March 2009) liberalized interna tional Internet access.  Under the new Regulation, Internet service 
providers, in particular those using mobile cellula r telephony systems, may have their own fibre-optic 
international access and freely choose links or capac ities from any national or international service 
provider, as well as the technology to be used for pr oviding the services.  This measure has benefited 
users in terms of price, quality and speed of se rvice, and has also encouraged infrastructure 
investment by telecommunications firms. 
98. Resolution No. 133/2008 containing the Regul ation on Competition and Dispute Settlement 
Procedures relating to the Telecommunications Re gulation was adopted in January 2008.  This 
Regulation prohibits abuse of dominant position a nd collusive behaviour that prevents, restricts, 
distorts or otherwise impairs effective competition. 
99. Paraguayan legislation does not require netw ork unbundling, but service providers share 
infrastructure under many arrangements.  A regulati on is being drafted on number portability, with 
implementation expected by the end of 2011. Paraguay WT/TPR/G/245 
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(viii) Business climate 
100. Smaller businesses (micro, small and medium-sized enterprises) and family firms are a major 
pillar of the Paraguayan economy, and one of its main sources of employment (representing 80 per 
cent of the employed workforce3 and 97 per cent of enterprises existing in the country).4  
They account for a significant percentage of annua l GDP growth, and help to create a favourable 
environment for governance and social stability in  the country.  However, there is not yet a 
framework law for this sector. 
101. The Integrated Centre for Small and Medium-S ized Enterprises was set up by Ministry of 
Industry and Trade Resolution No. 958/06 to coordinate and bring together in one place all 
information on MSMEs, encourage formalization of the sector, provide specialized technical 
assistance to strengthen entrepreneurial initiative, and make available training programmes for their 
specific requirements. 
102. Resolution No. 639/06 of the Ministry of Industry and Trade created a unified system for 
setting up enterprises (SUAE), with the aim of reduc ing the number of steps, costs and time involved 
in setting up a business, and establishing a single win dow for the procedures invo lved.  It has reduced 
the number of steps involved from 17 to 7 and th e number of days from 74 to 35, which boosted 
Paraguay's international ranking in the World Bank's Doing Business 2010 . 
103. To strengthen the competitiveness of SMEs the Government created the Business 
Development Programme for Small and Medium-Sized Enterprises (PR-100) under 
Law No. 2066/2003.  The relevant activities include the participative and inclusive design of the 
national competitiveness agenda with the in ter-institutional steering group in line with 
Paraguay Vision 2030;  developmen t of "Competitiveness Forums" in ten different regions in the 
interior of the country;  development of Comp etitiveness Forums for specific production chains;  
follow up for the competitiveness agen das for the dairy, metalworking and stevia sectors;  as well as 
public and private leadership training programmes in various regions of the country.  This programme 
has produced 120 trained regional leaders who par ticipate actively in the design and implementation 
of production development policies in their regions;  four regional proposals for boosting 
competitiveness;  regional competitiveness agend as that have been drawn up and are being 
implemented with steering groups;  and over 600 SMEs par ticipating actively in sectoral and regional 
forums and the "national competitiveness agenda 2030". 
104. The Programme of Comprehensive Support for Microenterprises (PAIM-FOCEM) seeks to 
enhance the quality of products and/or services, lift sales and earnings, promote sustainable 
development and thus reduce poverty.  Its resu lts are to be seen in the support given to 
micro-enterprises and micro-entrepreneurs in the ar eas of training, technical assistance and associative 
activities, and the provision of machinery and equi pment and tools to local micro-entrepreneurial 
associations to raise their productivity and competitiveness. 
105. The Business Incubator Project launched by the Mi nistry of Industry and Trade together with 
UNDP aims at promoting a national incubation system  for the development of business incubators so 
that an increasingly large number of new firms w ill enter into economic activity, generating more and 
better products and services as well as employment.  The project is currently in the process of implementation.  It provides technical assistance for entrepreneurial management and start-up 
                                                     
 
3 Source:  Directorate-General of  Statistics, Surveys and Censuses (DGEEC), Household Surveys 
2007-2009, firms employing 20 or more persons, whether or not registered. 
4 Source:  DGEEC, Household Surveys 2007-2009. WT/TPR/G/245 Trade Policy Review 
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working capital, market research, integration in to production chains, assistance in creating work 
teams, and integration into de velopment plans and institutions. 
106. A number of business promotion programmes ar e under way with support from international 
cooperation, such as the MERCOSUR economic integr ation and sustainable development programme 
(ECONORMAS-MERCOSUR);  the Paraguayan Econom ic Integration Project (AIEP);  and the 
MERCOSUR Information Society Project (MERCOSUR Digital). 
107. The ECONORMAS project pursues four lines of  action:  (a) sustainable production and 
consumption;  (b) action to combat desertificati on and the impact of drought:  (c) progress in the 
implementation of the Globally Harmonized System of Classification and Labelling of 
Chemicals (GHS);  and (d) convergence of quality and safety standards and regulations for products 
in selected areas - wood and furniture, electri cal products, metalworking, and regional 
conformity-assessment capacity building. 
108. The AIEP project, for which the Ministry of Indu stry and Trade is responsible, is aimed at 
institutional capacity building to tackle the challe nges of globalization and boost foreign trade through 
the adoption of simplified customs procedures, assistance for overcoming technical barriers to trade, 
and capacity building for export-oriented private enterprise. 
109. The MERCOSUR Digital project is an initiative in volving international cooperation aimed at 
promoting joint policies and strategies for the informa tion society and electronic trade, with a view to 
regional economic integration a nd growth, developing electronic trade and providing training in 
relevant areas.  As regards electronic trade, Para guay should benefit from the project in terms of 
equipment, software and technical assistance for the implementation of the Root Certification 
Authority for digital signature. 
(ix) Standards and technical regulations 
110. A commitment to the modernization of the country's institutions has been a feature of the 
democratic transition in Paraguay over the last tw o decades.  The creation of a National Information 
and Notification System (SNIN) is part of this process as one of the tools for integrating the country 
into the world economy. 
111. With its multilateral obligations in mind, Pa raguay established the SNIN covering technical 
regulations, standards, and conformity assessment  procedures by means of Decree No. 6.499/05.  
The SNIN is an inter-institutional network designe d to ensure that the process of drawing-up and 
approving national technical regula tions and standards meets the country's development needs and its 
international commitments. 
112. The relevant provisions of this Decree we re supplemented by the promulgation of 
Decree No. 1765/09 regulating the functioning of  the SNIN and defining its strategy, and 
Decree No. 1766/09 setting up the National Co mmittee on Technical Barriers to Trade. 
113. Paraguay is in the process of fulfilling the tr ansparency requirements of the Agreement on 
Technical Barriers to Trade (TBT) and other WTO texts.  During the period covered by this 
third Trade Policy Review, 32 national technical regulations were notified and in most cases the 
60-day consultation period was taken into account. 
114. The National Institute of Technol ogy, Standardization and Metr ology (INTN) has participated 
in the activities of regional and international organi zations dealing with standardization, such as the Paraguay WT/TPR/G/245 
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Codex Alimentarius, the Interna tional Organization for Standardization (ISO), the Pan-American 
Standards Commission (COPANT) and the MERCOSUR Standardization Association (AMN). 
(x) Hydrocarbons 
115. Decree No. 5739 was adopted in December 2010 "Authorizing the Ministry of Industry and 
Trade to begin the necessary formalities and procedur es with a view to the construction and operation 
of a multi-purpose pipeline for the transport of liquid fuels between the port of Paranaguá (Brazil) and 
the city of Asunción (Paraguay) by means of Paraguayan enterprises, and declaring the process to be of national interest".  Constructi on of this pipeline will enable Para guay to have a reliable supply of 
petroleum and petroleum products and oils that does not depend on river navigability. 
(xi) State-owned enterprises 
116. The State-Owned Enterprises Council was se t up on 25 August 2008 by Decree No. 163.  
The Council is responsible for coordinating and ove rseeing the economic and financial decisions of 
State-owned enterprises. 
(xii) Electronic government 
117. Electronic government is being promoted in order to enhance the speed, efficiency, 
transparency, legality and public nature of the ac tions of public authorities.  To this end, 
Law No. 4017/10 "On the legal validity of electronic signatures, digital signatures, data messages and 
electronic files" was recently promulgated. 
118. In the course of 2010 the Government drew up a Catalogue of Procedures, a precise and 
updated information manual covering more than 700 formalities of ten ministries, 19 decentralized 
bodies, two secretariats and four State-owned enterprises under the responsibility of the 
Executive Power, according to a report submitted to the Presidential Information Directorate General. 
119. In this context, a total of 292 official pr ocedures were prioritized and included in the 
Integrated Management System for Public Administ ration Procedures, of which 153 can be monitored 
online for citizens to be able to track the status of a procedure they have initiated. 
(xiii) Export promotion 
120. The REDIEX Investment and Export Network was set up under the Ministry of Industry and 
Trade by Executive Decree No. 4.328/05.  Its missi on is to implement the National Export Plan by 
networking with all the key players of government, business and academic circles and civil society organizations, in the belief that export activity and i nvestment attraction are the best tools for bringing 
about economic and social development. 
121. REDIEX operates through the creation of sectoral committees that articulate and promote 
export competitiveness and diversification as well as promoting investment attraction and the business 
climate.  So far eight sectoral committees have been set up, covering, inter alia , beef and leather, fruit 
and vegetables, stevia, information technology, fore stry products, tourism, and textiles and made-up 
articles.  REDIEX currently receives IDB financing, which will continue until 2013. 
122. The impact of the work of these sectoral comm ittees is reflected in the exports of these 
sectors, which for the period January November 2010 amounted to a total value that was 213 per cent 
higher than the figure for the whole of 2004.  Their share of total exports rose from 21.5 per cent in 2004 to 27.7 per cent for January-November 2010.  Th ese exports grew more strongly than those of WT/TPR/G/245 Trade Policy Review 
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the other sectors, where growth for the period  between 2004 and January -November 2010 totalled 
137.3 per cent.  During this period, total exports rose by 157.6 per cent. 
123. The highest growth in these sectors was in fruit and vegetables, and beef and leather, with 
341 per cent and 309 per cent respectively, followed by textiles and made-up articles, with 130 per 
cent, and forestry products with 28 per cent. 
124. This work on the business climate and investme nt attraction has raised the business climate 
indicators favouring both economic competitiveness and the attraction of domestic as well as foreign 
investment in production. 
VII. DIRECTIONS OF FUTURE POLICY 
125. Economic growth with social inclusion is th e central principle guiding the Government's 
economic policy to 2013.  To this end it has draw n up strategic objectives and plans aimed at boosting 
economic development. 
126. The Government intends to concentrate its efforts over the coming years on the basis of 
three main development pillars:  (1) raising pro ductivity;  (2) equity:  and (3) strengthening 
government institutions. 
127. These strategic objectives are closely linked with improving the performance of the external 
sector by means of measures to promote the expans ion of production and trade.  Emphasis will be 
placed on activities that lift employment and real in comes, as well as support for the competitiveness 
of small and medium-sized enterpri ses and small-scale family farming in order to diversify exportable 
supply and facilitate their participation in foreign trade.  Government action will therefore address the 
necessary structural changes, incr easing public investment and encouraging private investment in the 
economic sectors that have low productivity and limited participation in external markets. 
128. The Government of Paraguay believes firmly in  free international trade, and relies on the 
multilateral trade rules and their capacity to provi de an ideal framework for the generation and 
development of productive activities.  It will therefor e continue to deepen its economic integration in 
MERCOSUR and resolutely to push for the conclusion of the WTO negotiations, especially the 
Doha Development Round, with a view to establishi ng concrete and credible arrangements to ensure 
that the developing and least developed countries are able to participate in international trade and 
investment on a fair and equitable basis. 
129. Its commitment to action aimed at further liberalization of world trade is closely linked to its 
status as a landlocked country.  Thus, its foreign tr ade policy has always been one of very open trade, 
with procedures that facilitate and speed up trad e so as to compensate to some extent for the 
additional costs it has to face in seeking to  link up with the rest of the world. 
130. As an alternative option, the G overnment will continue to deepen its trade relations with other 
countries or economic groupings through the negotia tion and conclusion of free trade agreements to 
which it is a party as a member of MERCOSUR.   Emphasis will be placed on concluding the 
free trade agreement currently being negotiated between MERCOSUR and the European Union, from 
which major gains in terms of production,  exports and investment are expected. 
131. Current conditions in MERCOSUR en able Paraguay to remain rela tively open to international 
trade and maintain high shares for imports and exports in the composition of its GDP, clearly 
indicating its commitment to openness. Paraguay WT/TPR/G/245 
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132. At the international level, the Government hopes that the factors underpinning economic 
growth will continue along the trend recorded in 201 0, in a context of favourable growth forecasts for 
the developed and emerging economies in the coming years. 
__________