WT/TPR/S/245 Trade Policy Review 
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II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
(1) OVERVIEW  
1. Paraguay's basic governmental and judicial framewo rk remains the same as  at the time of its 
previous Review in 2005.  Likewise, the Ministry  of Industry and Trade (MIC) still maintains overall 
responsibility for trade and industrial policy, shari ng the tasks jointly with the Economic Cabinet.  
The main strategy document guiding the orientation of policy-making, including in the areas of trade 
and investment, is the Government's "Economic and Social Strategic Plan 2008-2013" (PEES).  This 
Plan aims to foster economic growth together w ith greater social inclusion.  These objectives are 
complemented by the proposals contained in th e Social Development Policies (PSD 2020), whose 
strategic objective is to promote and develop the conditions to permit inclusive, sustained growth. 
2. Paraguay is open to foreign investment, which is protected by the Constitution and by an 
overarching investment law which guarantees equal tr eatment of foreign and domestic investments.  
Paraguay also belongs to various  international arbitration mech anisms for the settlement of 
investment-related disputes.  In 2005, Paraguay intr oduced legislation restricting land ownership in 
border regions for nationals of Brazil, Bolivia and Argentina;  otherwise there are no restrictions on 
land ownership. 
3. Paraguay has been relatively well ranked by the World Bank for protecting investors.  
However, the PEES touches upon the need for further improvements to the business climate in order 
to attract investment.  Disincentives to investment  identified by external sources include weaknesses 
in the judicial sector, difficulties in enforcing contr acts, and lengthy bureaucratic procedures, together 
with restrictive domestic requirements in some ar eas.  A new agency to promote investment and 
exports called "REDIEX" was established in 2005 a nd involves closer participation by the private 
sector. 
4. Paraguay has been an active participant in  the Doha Development Agenda (DDA) trade 
negotiations and since 2005 has co-sponsored proposal s in the areas of trade facilitation, intellectual 
property rights, non-agricultural market access and agri culture.  Its key interests in the negotiations 
relate to:  agriculture;  ensuring a free and non-disc riminatory regime for transit of goods by road;  
special and differential treatment, especially  measures to assist small and vulnerable 
economies (SVEs) and landlocked countries;  and Aid for Trade.  Paraguay has maintained a solid 
record of notifications to the WTO over the review period, with only a few outstanding.  It has never been involved in WTO dispute settlement either as a complainant or as a respondent;  however it has 
participated frequently as a third party. 
5. Paraguay's trade regime is, to a large extent, framed by its participation in the Southern 
Common Market (MERCOSUR).  Paraguay offers ta riff preferences to 13 countries through a variety 
of regimes, some of which overlap.  Since 2005, a partial scope agreement between MERCOSUR and 
India and a free trade agreement with Israel have come into force.  Agreements between MERCOSUR 
and Egypt and MERCOSUR and the Southern Africa Customs Union (SACU) have been signed but 
have not yet entered into force.  MERCOSUR countries have signed framework agreements to 
formally initiate preferential trade negotiations w ith various countries outside the region, although in 
some cases these still have to be ratified.  Para guay has not ratified the MERCOSUR Protocol of 
Montevideo on Trade in Services. 
6. During the period under review, Paraguay received assistance from the WTO and other 
intergovernmental agencies in areas such as:  ag riculture;  sanitary and phytosanitary measures;  
technical barriers to trade;  import licensing;  trad e facilitation;  intellectual property;  services;  and Paraguay WT/TPR/S/245 
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non-agricultural market access.  Aid-for-Tra de funds committed over the period 2006-2008 
represented an annual average of 0.6 per cent of GDP. 
(2) INSTITUTIONAL AND POLICY FRAMEWORK  
7. There have been no major changes to Paraguay' s basic governmental and judicial framework 
since its previous Review, or to the procedures for passing laws, which are described in Box II.1. 
Box II.1 
Institutional structure 
Constitution :  Constitution of 1992.  Provides, inter alia , for the separation of powers between the 
Executive, the Legislat ure and the Judiciary. 
Executive :  Executive power is exercised by the President of the Republic, who appoints the Council of 
Ministers, which deliberates on matters of public interest, acting as an advisory body to the President, and 
reviews legislative proposals.  The Economic Cabinet is responsible for advising on and coordinating government economic policy.  It is composed of the following Ministers:  Finance;  Industry and Trade;  
Agriculture and Livestock;  and Public Works and Communications;  and also the President of the 
Central Bank. 
Legislature :  Congress comprises a Senate Chamber (45 members) and a Chamber of Deputies 
(80 members). 
Judiciary :  There are 15 judicial districts in Paraguay, and within each district  there are two tiers of courts.  
At the first tier, there are criminal , civil and commercial, labour, and ch ild and adolescent courts.  At the 
second tier, there are appeals tribuna ls.  The Supreme Court is the highest court in the country and, 
inter alia , is responsible for resolving constitutional questions and petitions for appeal. 
Elections :  There are simultaneous elections of Senators and Deputies (five-year term, renewable);  they 
coincide with Presidential elections (five-year term, not renewable).  The latest general election was in 
2008. 
Passage of legislation :  Draft laws may originate from:  members of Congress;  the Executive;  popular 
initiative;  or the Supreme Court.  Draft laws become  law after passing both Chambers and on receiving the 
approval of the Executive.  Parliament, through its Cham bers, has the power to amend or reject draft laws.  
The President of the Republic may object to a ll or part of a draft law, as the case may be. 
Hierarchy of legislation :  International treaties are signed by the President and must be ratified by 
Congress.  As noted in Paraguay's previous Review, subsequent international agreements take precedence 
over any existing international agreement.  
Source : WTO Secretariat, based on informa tion provided by the authorities. 
 
8. The MIC remains responsible for defining, co ordinating, implementing and monitoring trade 
policy affecting goods and services, as well as indus trial policy.  Its functions are set out in 
Law No. 904/63, as amended in 2006.1  In 2009, a National Technical Committee on Technical 
Barriers to Trade was created, composed of  various ministries and autonomous entities 
(Chapter III(2)(viii)).  In December 2010, a nationa l committee was being set up to handle sanitary 
                                                      
1 MIC online information.  Viewed at:  h ttp://www.mic.gov.py/images/ley2961_06_modificala 
904_63.pdf. WT/TPR/S/245 Trade Policy Review 
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and phytosanitary matters.  Matters  relating to other aspects of trade are dealt with on an informal 
basis. 
9. Paraguay's trade policy is, to a large extent, framed by its membership of MERCOSUR.  In 
this regard, there is an institutional framewor k in place for intergovernmental decision-making 
(Chapter II(2) and (5)).  There is also a mechan ism for macroeconomic policy coordination by the 
respective Ministers of Finance and Presidents of Central Banks.2 
10. Paraguay's trade strategy is part of its mo re general development policy.  The new 
administration adopted the PEES to define its econom ic priorities.  The Government's development 
objectives, including those which have an impact on tr ade and trade-related policies, are set out in the 
PEES, whose objective is to foster economic growth together with greater social inclusion.  The 
strategic objectives established by the Plan are:  employment generation and income distribution;  
strengthening of State institutions;  diversifica tion of production;  incr eased public spending on 
poverty alleviation;  infrastructure developmen t;  strengthening of small and medium-sized 
enterprises (SMEs), especially small farmers;  a nd coordination of govern ment actions.  In the 
production sector emphasis is placed on the developm ent of agribusiness, particularly by working 
with small farmers and SMEs and helping them obt ain access to credit.  With in the PEES, each public 
institution integrates its policies and sectoral progra mmes into defined strategic pillars, and fixes an 
implementation timetable, which is monitored yearly.3 
11. In order to strengthen the process of change in the Government's social policies, the 
Government drew up the Proposal for Public Soci al Development Policy, 2010-2020 (PSD), which 
constitutes the guiding framework for managing social i nvestment in all institutions and, together with 
the PEES, establishes new mechanisms, goals, indicators,  and timetables for action in order to achieve 
results that have a foreseeable impact.4 
12. The MIC has developed an industrial policy stra tegy based on a new system of tax incentives 
to support the integration of family farming bus inesses and SMES into value chains and industry 
(Chapter IV(3)).5  The authorities also consider it vital to support the development of infrastructure as 
a means of generating employment, improving Paraguay's international competitiveness, and 
compensating for Paraguay's disadvantage as a land locked country.  The PEES contains a series of 
programmes and projects to be carried out by the MI C in order to promote the development of SMEs, 
including the establishment of an Integral Centre for Support to Medium-Sized and Small Enterprises (CIAMP), set up to coordinate technical  and financial assistance and training efforts.  A 
business competitiveness programme ha s also been established. 
(3) I
NVESTMENT REGIME  
13. Paraguay is not only open to, but also encourages,  foreign direct investment:  equal treatment 
for foreign and domestic investment is guaranteed by  law, the only exception being the ownership of 
                                                      
2 For a detailed description of decision-making and cooperation mechanis ms in MERCOSUR, see 
WTO (2005), Chapter II. 
3 Economic and Social Strategic Plan 2008-2013.   Viewed at http://www.hacienda.gov.py/web-
hacienda/index.php?c=436. 
4 Paraguay para Todos y Todas:  Propuesta de Política Pública para Desarrollo Social  (2010-20) .  
Viewed at:  http://www.presidencia.g ov.py/gabinetesocial/wp-content/uploads/2010/02/propuesta-de-politica- 
publica-para-el-desarrollo-social-paraguay-para-todos-y-todas-web1.pdf. 
5 Ministry of Finance online information.  Viewed at:  http://www.hacienda.gov.py/web-
hacienda/archivo.php?a=28372c2c3ae6f8f6f6fef3f8f6f7f9e63e2c29f4372b2d280c6&x=7f7f01e&y=25250c3. Paraguay WT/TPR/S/245 
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land near borders (see below).  The only sectors which are not open to private investment (either 
domestic or foreign) are those reserved for the State (Chapter III(4)(iv)). 
14. In spite of Paraguay's relatively lo w overall ranking in the World Bank's Doing Business 2011  
report (106th place out of 183 countries), Paraguay is rated well in the category of protecting investors 
(59th place) and performs better than most other countries in South America.6  However, certain 
disincentives to foreign investment have been pinpointed by external sources.  These include 
weaknesses in the judicial system, difficulties in enforcing contracts, lengthy bureaucratic procedures 
and a lack of transparency and accountability in th e enforcement of regulations.  More specifically, 
concerns have been expressed about a requirement that company board members with the right to vote 
should be legally resident in Paraguay, and al so Law No. 194/93 which imposes strong penalties for 
severing relations with local distributors and agents.7 
15. Further improving the business climate for investment is one of the key issues highlighted in 
the PEES.  The Report emphasizes the importance of deve loping private-public partnerships to invest 
in infrastructure.  Areas which have been iden tified as requiring infrastructure upgrades include:  the 
development of multimodal transpor t networks;  electricity transmission lines;  water distribution 
systems;  drainage works;  and communications.  According to the authorities, some concrete steps 
have been taken to improve the investment climate in Paraguay.  These include:  the installation of a 
new electricity infrastructure to meet demand for energy;  the preparation of projects granting concessions for highways, airports and waterways;  and the implementation of a master plan to 
enhance the business climate.  In addition, a prelim inary draft law on industrial policy and attracting 
investment to the industrial sector has been prepared. 
16. The 2020 PSD gives priority to policies d esigned to create and promote incentives for 
agribusiness, as well as to encourage conversion of th e model for developing agricultural exports and 
attracting private-sector investment, with the aim of facilitating the popula tion's participation and 
inclusion in national policies to promote the pr oduction sector, thereby developing opportunities for 
investment and employment. 
17. Private property is guaranteed under the C onstitution (Article 109).  In addition, 
Law No. 117/91 on investment provides for equal treatme nt of foreign and domestic investments.  It 
specifies that there are no prior authorization requi rements for private investment and guarantees a 
free trade regime and a free exchange regime.  Investors may freely contract investment insurance within Paraguay or abroad.  There have been no changes to this Law over the review period.
8  
Incentives for investors are governed by Laws No. 60/90 and No. 2.421/04, Decree No. 11.771/00 and 
amendments thereto, which regulate the Special Regime for Imports of Raw Materials (Chapter III(4)(iii)), the Law on the In-Bond Processing ( maquila ) Industry and the Free 
Zone Law (Chapter III(3)(iv)). 
18. In 2005, new legislation was enacted preventi ng citizens from Brazil, Bolivia and Argentina 
from owning land within 50 km . of Paraguay's borders.
9  Otherwise there are no restrictions on land 
ownership by foreigners.  As set out in the Cons titution (Article 112), the State owns all deposits of 
                                                      
6 World Bank online information.  Viewed a t:  http://www.doingbusiness.org/reports/doing-
business/doing-business-2011. 
7 United States Department of State online information.  Viewed at:  http://www.state.gov/e/eeb/rls/ 
othr/ics/2009/117242.htm and http://www.state.g ov/e/eeb/rls/othr/ics/2010/138127.htm. 
8 Government of Paraguay online information.  Viewed at:  http://www.leyes.com.py/todas_ 
disposiciones/1991/leyes/ley_117_91.php. 
9 Law No. 2.532/05 establishing the border security zone of the Republic of Paraguay.  Viewed at:  
http://www.semillas.org.py/pdf/ley_2532_2005.pdf. WT/TPR/S/245 Trade Policy Review 
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hydrocarbons and solid, liquid or gaseous minerals  (except rocky, earthy or calcareous substances) 
and may grant concessions for their exploitation.10 
19. Paraguay has bilateral investment treaties (BITs) with 27 countries.11  There have been no 
new BITs signed over the period under review. 
20. Paraguay has double taxation agreem ents with the following countries (coverage and the year 
of entry into force are in parenth eses):  Germany (air transport, 1985);  Argentina (air, river and road 
transport, 2000);  Belgium (air transport, 1987);  Ch ile (air, river and road transport, 1995, and income 
and wealth tax, 2008);  China (income tax, 2010);  and Uruguay (air transport, 1993).  An agreement 
with Uruguay on road transport is pending ratificati on.  An agreement with Brazil on income tax was 
rejected by the Congress. 
21. The authorities have tried to strengthen the judi cial system in order to improve the business 
and investment environment.  In this respect, there have been a number of reforms over the period under review.  These include the introduction of ame ndments to the Penal Code (effective mid-2009), 
with tougher provisions on money laundering, human  trafficking, and intellectual property rights.  
Also, at the level of the Supreme Court, a Directorate of Communication has been created to increase 
transparency on judicial matters, as well as a Comp laints and Claims Office to address complaints 
against judges, court officials and administrative services, as well as to ensure that the judicial 
services comply with legislative and administrative deadlines and requirements.  A Code of Judicial 
Ethics has also been adopted. 
22. Under Law No. 117/91, investment-related dis putes may be submitted to either national 
courts or international arbitration.  At the nati onal level, the Paraguayan Arbitration and Mediation 
Centre, a private entity, uses methods other than le gal proceedings to settle disputes.  Paraguay is a 
member of the International Centre for Settlement of Investment Disputes (ICSID) and is a signatory 
to a number of conventions that provide investors wi th other arbitration opportunities.  These include 
ad hoc courts established under the rules of the United Nations Commission on International Trade 
Law (UNCITRAL) and the Inter-American Comme rcial Arbitration Commission (for disputes 
between signatory countries in the Americas).  At  December 2010, Paraguay had been a party in 
three cases submitted to international arbitration.  The ICSID was the chosen forum for each of these 
disputes:  two are pending and one w as concluded in favour of the State.
12 
23. Paraguay is also a member of the World Bank's Multilateral Investment Guarantee 
Agency (MIGA), which offers foreign investment  guarantees for non-commercial risks in developing 
countries, as well as dispute settlement services for the investments covered.13  Paraguay has also 
                                                      
10 United States Department of State online information.  Viewed at:  
http://www.state.gov/e/eeb/rls /othr/ics/2010/138127.htm. 
11 Argentina (1969);  Austria (1999);  Belgium and Lu xembourg (2004);  Bolivia (2003);  Chile (1997);  
Costa Rica (2001);  Cuba (2002);  Czech Republic (2000);  El Salvador (1998);  France (1980);  
Germany (1994, 1998);  Hungary (1995);  Italy (not yet entered into force);  Korea, Rep. of (1993);  
Netherlands (1994);  Peru (1994);  Portugal (2001);  Romania (1995);  South Africa (1974);  Spain (1996);  
Switzerland (1992);  Chinese Taipei (1991);  United Kingdom (1990, 1992, 1997);  United States of 
America (1993);  Uruguay (1976);  and Venezuela (1997).  Dates in parentheses are the year of entry into force. 
12 The pending cases are:  SGS Société de Surveillance S.A. v. Republic of Paraguay and Bureau 
Veritas, Inspection, Valuation, Assessment and Control, BIVAC B.V. v. Republic of Paraguay .  The concluded 
case was Eudora A. Olgún v. Republic of Paraguay .  Details of these cases can be viewed at:  
http://icsid.worldbank.org/ICSID/index.jsp.  See also:  UNCTAD online information:  http://www.unctad.org/ 
en/docs//webdiaeia20103_en.pdf. 
13 MIGA online information.  Viewed at:  http://www .miga.org/projects/index_sv.cfm.  There has been 
only one MIGA-insured project in Paraguay, which is now inactive. Paraguay WT/TPR/S/245 
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accepted the terms and conditions of the Oversea s Private Investment Corporation of the 
United States of America, which finances and insu res investment projects against risks such as the 
non-convertibility of currency, expropriation, and political violence, inter alia . 
24. Investment (and export (Chapter III (3)(v))) pr omotion activities are carried out by the 
recently established (2005) Investment and Expo rt Network (REDIEX), which falls under the 
responsibility of the MIC.14  In 2006, the previous trade and investment promotion agency, 
PROPARAGUAY, was taken over by REDIEX in or der to avoid overlapping of functions.  
According to the authorities, contrary to what occurred with PROPARAGUAY, the private sector 
participates to a large extent in formulating policies and adapting projects within the REDIEX 
framework. 
(4) PARTICIPATION IN THE WTO 
25. Paraguay is a founding Member of the WTO.  As  far as goods are concerned, it grants at least 
MFN treatment to all its trading partners.  Pa raguay has been an active participant in the 
Doha Development Agenda (DDA) negotiations.  It has never been involved in WTO dispute 
settlement either as a complain ant or as a respondent, but has been involved as a third party 
(Box II.2). 
Box II.2 
Summary profile of Paraguay's WTO participation 
Accession: Contracting Party to the GATT (6 January 1994).  Domestic ratification of the 
Uruguay Round through Law No. 444 (15 April 1994).  Ratification of the Marrakesh Agreement (10 November 1994).  Founding Member of the WTO 
(1 January 1995). 
Plurilateral 
agreements: Paraguay is neither a signatory nor an observer  to the plurilateral Agreements on Trade in 
Civil Aircraft or Government Procurement.  It is not a participant in the Information Technology Agreement (ITA). 
Services protocols: Paraguay did not take part in the post-Uruguay Round negotiations on telecommunications, 
the movement of natural persons or financial services. 
Dispute settlement: No involvement as complainant or respondent.  Third party in 15 cases relating to:  cotton;  
preserved peaches;  wheat, wheat flour and edible vegetable oils;  poultry;  processed orange 
and grapefruit products;  sugar;  biotech products;  drug arrangements;  and retreaded tyres. 
DDA 
negotiations: Communications submitted to Negotiating Committees since 2001 :  Trade and 
Development (special and differential treatment, and implementation);  Trade Facilitation (transit, special and differential treatment, and implementation mechanism);  Intellectual Property Rights (notification and registration of geographical indications for wines and 
spirits, TRIPS and the Convention on Biological Diversity);  Agriculture (modalities for 
market access for SVEs, concerns regarding th e "blended formula" approach to market 
access);  Non-agricultural Market Access ( NAMA) (modalities, including for SVEs);  
Rules (experiences and concerns on anti-dumping in the area of textiles and clothing);  
Dispute Settlement Understanding (improvements to Article 5, Good Offices, Conciliation and 
Mediation ). 
 Services offers :  Initial services offer circulated in  2003.  No revised offer circulated. 
 Participation in negotiating groups :  MERCOSUR;  SVEs - agric ulture and market access;  
Cairns Group;  G-20.  Paraguay is also a sponsor of document TN/IP/W/10/Rev.2 proposing a voluntary database. 
Source : WTO Secretariat. 
                                                      
14 REDIEX online information.  Viewed at:  http://www.rediex.gov.py. WT/TPR/S/245 Trade Policy Review 
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26. In Ministerial statements to the Ministerial Conferences in Hong Kong, China and Geneva in 
2005 and 2009, respectively, Paraguay, inter alia , highlighted the importance of the development 
dimension of the DDA, and more specifically its in terests in the negotiations on agriculture, trade 
facilitation and Aid for Trade.15  
27. Since 2005, Paraguay has submitted 13 communications in the context of the DDA 
negotiations, in all instances as a co-sponsor together  with other countries.  Most relate to trade 
facilitation, with proposals aiming to ensure freedom , non-discrimination and transparency in transit 
regimes for the transportation of goods by ro ad, as well as to the implementation of DDA 
commitments and the application of special  and differential treatment in this area.16   Paraguay has 
also proposed negotiating modalities on market  access for SVEs in agriculture and for 
non-agricultural products.17 
28. In the area of intellectual property rights, Paraguay has co-sponsored a communication which 
relates to the relationship between the TRIPS Agre ement and the Convention on Biological Diversity:  
it proposes that applicants for patent protection shoul d be required to disclose the origin of biological 
resources and/or associated traditional knowledge and provide evidence of prior informed consent and 
fair and equitable benefit sharing.18 
29. Since its previous Review, Paraguay has submitted several notifications (Table AII.1).  
Notifications are pending in areas such as State-trad ing enterprises, trade-related investment measures 
and customs valuation. 
(5) PREFERENTIAL TRADE RELATIONS  
30. By far the most important of Paraguay's preferential trade agreements is MERCOSUR, which 
also comprises Argentina, Brazil and Uruguay.   MERCOSUR was established in 1991 under the 
Treaty of Asunción with the objective of creating a common market and ensuring the free movement of goods, services, capital and labour among member countries.
19  Initially an agreement within the 
Latin American Integration Association (LAIA)  framework, MERCOSUR acquired an independent 
legal personality under inte rnational law by virtue of the Additional Protocol to the Treaty of 
Asunción on the Institutional Structure of ME RCOSUR (Protocol of Ouro Preto), signed in 
December 1994 and in force since 15 December 1995.   The Bolivarian Republic of Venezuela signed 
its Protocol of Accession with the original  four MERCOSUR members in July 2006;  in 
December 2010 this Protocol was still in the process of being ratified by Paraguay. 
31. MERCOSUR was initially notified to the GATT in 1992 under the Enabling Clause.20  Both 
the goods and services aspects of MERCOSUR have  been examined and discussed in the 
                                                      
15 WTO documents WT/MIN(05)/ST/48 of 15 December 2005 and WT/MIN(09)/ST/73 of 
2 December 2009. 
16 WTO documents TN/TF/W/146/Rev.1/Add.1, TN/TF/W/137, TN/TF/W/133, TN/TF/W/119, 
TN/TF/W/81, TN/TF/W/79, TN/TF/W/41, TN/TF/W/ 35/Add.1, TN/TF/W/39, and TN/TF/W/28, of 
10 March 2008, 21 July 2006, 10 July 2006, 7 June 2006, 3 April 2006, 15 February 2006, 2 June 2005, 
11 May 2005, 2 May 2005, and 22 April 2005, respectively. 
17 WTO documents TN/AG/GEN/11 and TN/MA/W/66 of 11 November 2005. 
18 In WTO document TN/C/W/41/Rev.2/Add.5 of 24 July 2007, Paraguay requested to be a co-sponsor 
of a proposal originally submitted by a group of WTO Members (WTO document TN/C/W/41/Rev.2 of 5 July 2006). 
19 The provisions of the Treaty of Asunción were incorporated into the LAIA legal framework through 
Economic Complementarity Agreement No. 18. 
20 WTO document WT/L/127 of 7 February 1996. Paraguay WT/TPR/S/245 
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WTO Committee on Regional Trade Agreements and the Committee on Trade and Development 
under the provisions of both the GATT 1994 and the Enabling Clause.21 
32. The institutional structure of MERCOSUR comp rises six organs, out of which three are 
intergovernmental with decision-making powers:  the Council of the Common Market (CCM);  the 
Common Market Group (CMG), and the MERCOSUR Trade Commission (MTC).  The CCM is 
responsible for matters relating to the consolidatio n of regional integration and achievement of the 
objectives defined by the Treaty of Asunción and adopts Decisions.  The CMG is the executive body responsible for monitoring compliance with the Tr eaty of Asunción, and adopts Resolutions.  The 
function of the MTC is to monitor the application of common trade policy instruments and handle 
matters relating to common trade policies, intra-ME RCOSUR trade, and trade with third countries;  it 
also issues Directives.  The rulings of these bodies ar e binding on all member countries.  The organs 
with no decision-making powers are:  the MERCOSUR Parliament, the Economic-Social 
Consultative Forum, and the MERCOSUR Administra tive Secretariat.  None of the MERCOSUR 
organs is supranational;  they are all intergove rnmental.  The MERCOSUR Commission of Permanent 
Representatives (CRPM) is in charge of assisting the CCM, of making proposals regarding the 
common market, the integration process and extern al negotiations, and of strengthening economic, 
social and parliamentary relations within MERCOSUR. 
33. With regard to the dispute settlement system, the Olivos Protocol, signed in 2002 and in effect 
since January 2004, incorporates a stage for reviewing the arbitral awards made by MERCOSUR's ad hoc arbitration courts, restricted to points of law and legal interpretations.  It also includes a clause 
offering a choice of competent forum (MERCOSUR,  WTO, or other preferential schemes).  Since 
2005, Paraguay has not been involved in any MERCOSUR disputes. 
34. The Treaty of Asunción envisages the free movement of goods between the members of 
MERCOSUR.  Since January 2000, all products, with  the exception of those of the automotive and 
sugar sectors, have been free of tariffs for in tra-MERCOSUR trade.  As of December 2010, the 
automotive sector was still governed by bilatera l agreements;  in the case of the sugar sector, 
MFN tariffs, with a 20 per cent preference, apply to intra-zone trade. 
35. MERCOSUR Decision No. 54/04 of 16 December  2004 granted MERCOSUR origin status to 
products imported from outside MERCOSUR that co mply with the common tariff policy.  The aim 
was to achieve the free movement of goods and e liminate the double charging of common external 
tariff (CET) duties.  The first stage in this process,  which began in January 2006, concerns goods with 
a 0 per cent rating in all the member countries or with a tariff preference of 100 per cent within the 
framework of the agreements concluded by MERCOSU R with third parties.  The second stage, which 
is expected to cover all the goods subject to the C ET, has not yet been implemented, although a first 
step, the entry into force of a MERCOSUR Customs Code, has al ready been initiated.  The full 
implementation of the process will, however, requi re the establishment of a mechanism for the 
distribution of customs revenue and the interconn ection of the computerized customs management 
systems of the various member States.  In this connection, in 2010, by Decision CMC 10/10, the CCM approved the Guidelines for Eliminating Double Levy ing of the CET and for Distribution of Customs 
Revenue.
22 
36. The Protocol of Montevideo on Trade in Serv ices in the MERCOSUR entered into force on 
7 December 2005, following ratification by Argentin a, Brazil, and Uruguay;  Paraguay has yet to 
                                                      
21 For a full list of documents relating to the WTO's consideration of MERCOSUR, see the 
WTO regional trade agreements databa se.  Available at:  http://rtais.wto .org/UI/PublicMaintainRTAHome.aspx. 
22 MERCOSUR online information.  Viewed at:  http://www.mercosur.int/innovaportal/file/2365/1/ 
DEC_010-2010_ES_Doble%20Cobro.pdf. WT/TPR/S/245 Trade Policy Review 
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ratify the Protocol, and hence it does not apply in Paraguay.  Pursuant to GATS Article V:7, the 
Protocol of Montevideo on Trade in Services in the MERCOSUR was notified to the Council for 
Trade in Services (CTS) on 5 December 2006 (S/C/N/388) .  The Protocol is for an indefinite term and 
aims to apply the relevant services provisions of the Treaty of Asunción;  it establishes a programme 
for the liberalization of intra-MERCOSUR trade in  services within an overall implementation period 
of ten years from entry into force, i.e. by December  2015 at the latest.  The Protocol was reviewed in 
the WTO Committee on Regional Trade Agreements in September 2008.23 
37. As at the end of 2010, the CET, which came in to effect on 1 January 1995, had not yet been 
fully implemented.  Each country maintains a list of CET exceptions, which in Paraguay's case are 
some 23 per cent of all tariff lines (Chapter III(2)(iv)).24  The aim is to implement the CET by 
31 December 2011.  For Paraguay, application of the CET would cause rates to increase.  
Modification of CET rates requires the consent of all MERCOSUR members. 
38. Paraguay offers preferential access to a total of  13 countries.  These preferences are granted 
through:  its participation in MERCOSUR (see a bove);  MERCOSUR agreements with countries 
outside the region;  and preferences negotiated in  the context of Paraguay's membership of the 
LAIA25, including preferences granted under Regional Tariff Preference Agreement No. 426, 
Economic Complementarity Agreements (ECAs) (Table II.1)27, and Regional Scope 
Agreements (ARAM).  According to the authorities,  when a country has been given preferences under 
more than one agreement, the preferential tariff a pplied is the lowest one, in other words, the tariff 
that gives the highest level of preference. 
39. MERCOSUR, as a group, acceded to the Global System of Trade Preferences (GSTP) among 
Developing Countries in 2006, but it is not clear  whether Paraguay does in practice give these 
preferences.28 
                                                      
23 WTO document WT/REG/M/50 of 24 October 2008. 
24 Full implementation of the CET should have been achieved by 2001 in the cases of Argentina and 
Brazil and by 2006 in the cases of Paraguay and Uruguay. 
25 The LAIA signatory States are:  Argentina;  Boliv ia;  Brazil;  Chile;  Colombia;  Cuba;  Ecuador;  
Mexico;  Paraguay;  Peru;  Uruguay;  and Venezuela.  A central objective of the LAIA is to develop and consolidate a free trade area among its signatory States.  This is being achieved through a gradual process of 
integration. 
26 LAIA members negotiated a Regional Tariff Pref erence Agreement in 1984.  This establishes 
three categories of LAIA countries:  less developed countries;  countries at an intermediate stage of 
development;  and other countries.  Pr eferences offered and received by thes e countries depend on their level of 
development.  Two protocols to the Agreement (the most recent in 1990) have enlarged margins of preference 
and given additional preference margins to landlocked less developed countries (Bolivia and Paraguay).  Each 
country is permitted to maintain a list of exceptions.  LAIA online information.  Viewed at:  
http://www.aladi.org/nsfal adi/textacdos.nsf/vparweb. 
27 ECAs are trade agreements negotiate d between pairs or groups of countries.  They are defined in the 
Treaty of Montevideo (Article 11) and Council of Ministers Resolution 2 (Article 7).  These texts are reproduced in Annex 1 to WTO document WT/COMTD/59 of 25 January 2007. 
28 The GSTP countries are:  Algeria, Argentina, Bangladesh, Benin, Bolivia, Brazil, Cameroon, Chile, 
Colombia, Cuba, Democratic People's Republic of Kor ea, Ecuador, Egypt, Ghana,  Guinea, Guyana, India, 
Indonesia, Iran, Iraq, Libya, Malaysia, Mexico, Morocco, Mozambique, Myanmar, Nicaragua, Nigeria, 
Pakistan, Paraguay, Peru, Philippines, Republic of Korea, Sri Lanka, Sudan, Thailand, Tanzania, Trinidad and 
Tobago, Tunisia, Uruguay, Venezuela,  Viet Nam and Zimbabwe.  UNCTAD online information.  Viewed at 
http://www.unctadxi.org/Secured/GST P/Concessions/mercosur_en.pdf. Paraguay WT/TPR/S/245 
 Page 23 
 
 
Table II.1 
Non-MERCOSUR countries granted preferential trade access, November 2010 
Country Agreement (date of signature/ 
entry into force) Remarks 
LAIA members   
Bolivia MERCOSUR-Bolivia ECA No. 36 
(June 1996/October 1996) Gradual programme comprising several lists  of products with their own reduction 
timetables.  Products not included in any of  these lists and those in Annexes 1, 2, 
3 and 4 were subject to a 10-year time table for tariff reductions, completed in 
2006.  For products in Annex 5 and Annex 6,  duty-free trade will be achieved in 
2011 and 2014, respectively.  A special regime applies to products included in 
Annex 8, subject to a lower rate of tariff reduction (6%-8%).  The agreement 
contains provisions on the tariff and custom s regime, customs valuation, rules of 
origin, export subsidies, safeguards a nd other contingency measures, dispute 
settlement, technical regulations, and sanita ry and phytosanitary measures.  Calls 
for future negotiations on services liberalization. 
 ARAM No.1 Regional Agreements - 
Opening up of markets Approves lists of products for which member countries accord, without 
reciprocity, total elimination of duties a nd other restrictions, provided that they 
originate in Bolivia (Article 18 of  the Treaty of Montevideo, 1980). 
 LAIA Regional Tariff Preference 
Agreement No. 4 Paraguay grants a tariff preference of 24% to Bolivian imports (exceptions relate 
to 1,920 tariff lines). 
Chile MERCOSUR-Chile ECA No. 35 
(June 1996/October 1996) Elimination of duties on at least three-qua rters of tariff lines before January 2004 
and on all tariff lines before 2014.  The agreement contains provisions on the 
tariff and customs regime, customs valuati on, rules of origin, export subsidies, 
safeguards and other contingency measures, dispute settlement, technical regulations, and sanitary and phytosan itary measures.  Calls for future 
negotiations on services liberalization. 
 LAIA Regional Tariff Preference 
Agreement No. 4 Paraguay grants a tariff preference of 12% to Chilean imports (exceptions relate 
to 1,920 tariff lines). 
Colombia MERCOSUR-Andean Community 
ECA No. 59 
(December 2003/March 2005) Gradual establishment of a free trade area over a maximum transition period of 
15 years.  Calls for negotiations on services. 
 LAIA Regional Tariff Preference 
Agreement No. 4 Paraguay grants a tariff preference of 12% to Colombian imports (exceptions 
relate to 1,920 tariff lines). 
Cuba MERCOSUR-Cuba (July 2006a) Limited coverage (2,700 tariff headings).  Establishment of a free trade area over 
a maximum period of 5 years for a limited product universe. 
 LAIA Regional Tariff Preference 
Agreement No. 4 Paraguay grants a tariff preference of 12% to Cuban imports (exceptions relate to 
1,920 tariff lines). 
Ecuador MERCOSUR-Andean Community 
ECA No. 59 
(December 2003/March 2005) Gradual establishment of a free trade area over a maximum transition period of 
15 years.  Calls for negotiations on services. 
 ARAM No. 2 Regional Agreements - 
Opening up of markets Approves lists of products for which member countries accord, without 
reciprocity, total elimination of duties a nd other restrictions, provided that they 
originate in Bolivia (Article 18 of  the Treaty of Montevideo, 1980). 
 LAIA Regional Tariff Preference 
Agreement No. 4 Paraguay grants a tariff preference of 20% to Ecuadorian imports (exceptions 
relate to 1,920 tariff lines). 
Mexico AAP.R.  No. 38 Partial Scope  
Renegotiation of the Historical 
Heritage The purpose of this agreement is to inco rporate the concessions granted over the 
period 1962-1980 into the integration sc heme established by the Treaty of 
Montevideo, 1980. 
 LAIA Regional Tariff Preference 
Agreement No. 4 Paraguay grants a tariff preference of 8% to Mexican imports (exceptions relate 
to 1,920 tariff lines). 
Peru MERCOSUR-Peru ECA No. 58 
(August 2003/November 2005) Establishment of a free trade area over a maximum transition period of 15 years.  
The timetable for tariff reductions varies  according to the product and country.  
There are in general 8 reduction timetables (B1, B2, C1, C2, D1, D2, D3 and 
D4).  Products in group B1 are subject to an initial tariff reduction of 30% and 
subsequent annual reductions until 1 Janua ry 2012.  Products in group B2 start 
with a cut of 15%, and reductions until  1 January 2014;  implementation of 
reductions for products in groups C1 and C2 by 1 January 2010 and 
1 January 2014, respectively.  Products in group D3 will be subject to a phase-out 
of tariffs by 1 January 2016, and products in groups D2 and D4 by 
1 January 2019.  The agreement does not cover goods produced in free zones or 
subject to special customs regimes. 
 MERCOSUR-Andean Community 
ECA No. 59 (December 2003/March 2005) Gradual establishment of a free trade area over a maximum transition period of 
15 years. 
 LAIA Regional Tariff Preference 
Agreement No. 4 Paraguay grants a tariff preference of 12% to Peruvian imports (exceptions relate 
to 1,920 tariff lines). WT/TPR/S/245 Trade Policy Review 
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Country Agreement (date of signature/ 
entry into force) Remarks 
Venezuela MERCOSUR-Andean Community 
ECA No. 59 
(December 2003/March 2005) Gradual establishment of a free trade area over a maximum transition period of 
15 years. 
 LAIA Regional Tariff Preference 
Agreement No. 4 Paraguay grants a tariff preference of 12%  to Venezuelan imports (exceptions 
relate to 1,920 tariff lines). 
Other countries   
India MERCOSUR-India 
(January 2004 (agreement) and March 2005 (annexes)/June 2009)
b Applies to goods but not services.  C overs 902 tariff lines.  MERCOSUR's tariff 
preferences to India cover 452 tariff lin es.  India's tariff preferences to 
MERCOSUR cover 450 lines.  Concessions s till to be finalized with preference 
margins rising from 10 or 20% to 100% for a limited group of products.  Provisions include:  preferential safeguard  measures;  provisional safeguards;  
and dispute settlement. 
Israel MERCOSUR-Israel 
(December 2007/March 2010)c Applies to goods but not services.  Covers around 9,424 tariff lines for 
MERCOSUR and 8,000 lines for Israel.  There are some exceptions, but with 
conditions for their inclusion.  Four-pha se tariff reduction over a 10-year period.  
Provisions include:  bilateral safeguard s;  global emergency measures;  and 
dispute settlement. 
a Not available. 
b The MERCOSUR-India FTA has been notified to the WT O.  WTO document WT/COMTD/N/31 of 25 February 2010. 
c Paraguay ratified the MERCOSUR-Israel FTA on 22 February 2010.   The Agreement will apply bilaterally between Paraguay 
and Israel until all of the MERCOSUR States have ratif ied it (ratification by Argentina remains pending). 
Source : WTO document WT/TPR/S/176/Rev.1 of 23 April 2007;   LAIA online information.  Viewed at:  
http://www.aladi.org/nfaladi/te xtacdos.nsf/vparweb and http:// www.aladi.org/nsfaladi/guias 
importacion.nsf/09267198f1324b64032574960062343c/3f590b4bebd19ea403257486007210e4?OpenDocument;  
and Government of Paraguay onlin e information.  Viewed at:  
http://www.mre.gov.py/dependencias/ tratados/mercosur/registro%20mer cosur/mercosurprincipal.htm. 
40. Free trade agreements have been signed by MERCOSUR member States with Egypt (in 2010) 
and the Southern Africa Customs Union (SACU), which comprises Botswana, Lesotho, Namibia, South Africa, and Swaziland (in 2008).  These, however , have not yet entered into force, pending the 
required ratification by all of the parties. 
41. MERCOSUR countries have also signed framework  agreements to formally set in train 
preferential trade negotiations with several c ountries:  Jordan (2008);  Turkey (2008);  
Pakistan (2006);  the Cooperation Council for the Ar ab States of the Gulf (United Arab Emirates, 
Bahrain, Saudi Arabia, Oman, Qatar and Kuwait) (2005);  and Morocco (2004).
29  Negotiations 
between MERCOSUR and Jordan on a free trade ag reement are at an advanced stage.  These 
framework agreements generally involve the estab lishment of a negotiating committee, composed of 
the respective parties, to exchange  information and propose measures, inter alia . 
42. In addition, Memoranda of Understanding on th e promotion of trade and investment have 
been signed by MERCOSUR countries with:  th e Republic of Korea (2009);  Singapore (2007);  
Russia (2006);  Guyana (1999);  and Tr inidad and Tobago (1999).  These cover, inter alia :  exchange 
of information;  identification of areas of mutual interest;  and measures for expanding trade and 
investment.30 
                                                      
29 These agreements can be viewed at:  http://w ww.mre.gov.py/dependencias/tratados/mercosur/ 
registro%20mercosur/mercosurprincipal.htm. 
30 See:  http://www.mre.gov.py/dependencias/trat ados/mercosur/registro%20mercosur/mercosur 
principal.htm. Paraguay WT/TPR/S/245 
 Page 25 
 
 
43. Finally, negotiations on an in terregional association agreement between the European Union 
and MERCOSUR were revived during the period under review.31 
(6) AID FOR TRADE  
(i) Overview 
44. One of the Government's objectives is to boost diversification of the economy and to achieve 
this it is paying special attention to economic grow th through international trade and development of 
infrastructure in order to overcome the limitations  imposed by its position as a landlocked country.  
As far as Aid for Trade is concerned, the prior ities identified by Paraguay include development of 
infrastructure, regional integration and promoting competitiveness. 
45. Several evaluations, both at the national level and by international development agencies and 
organizations, indicate that the major constraint  on Paraguay's growth remains the inadequate 
development of its infrastructure, which, inter alia , makes Paraguayan exports less competitive.32  In 
recent years, despite the existence of projects w ith external financing, public investment in 
infrastructure was relatively low.  This can be attri buted to three factors:  concentration on stabilizing 
public finance;  the relatively low level of taxation in Paraguay;  and problems in carrying out projects 
with approved financing. 
46. The PEES 2008-2013 is the framework for all sectoral programmes and the basis for 
developing long-term strategies.33 
47. One of the objectives in the PEES is to encourag e diversification of exports in order to 
achieve more stable internationa l integration for Paraguay's economy.34  For this purpose, the PEES 
seeks to improve the infrastructure in such a wa y as to enhance competitiveness and lessen the 
vulnerability caused by concentration of exports on agricultural products with little value added.  
Several sectoral programmes have been conducted in order to achieve the overall objectives in the 
PEES, including:  the Strategic Framework for Agricu lture 2018 (plan for reform of the agricultural 
sector)35;  the Paraguay Competitivo 2030  programme (programme fo r the diversification of 
production, creation of exportable supply and promotion of competitiveness);  the Master Plan for 
National Transport36;  and the Strategic Plan for the Energy Sector 2013.37 
(ii) Trade-related technical assistance 
48. During the period under review, Paraguay received assistance from the WTO and other 
intergovernmental agencies (Table II.2) in areas such as:  agriculture;  sanitary and phytosanitary 
                                                      
31 European Commission online information.  Viewed at:  http://ec.europa.eu/trade/creating-
opportunities/bilateral-relations/regions/mercosur/#. 
32 See, for example, the analyses in:  Paraguay Competitivo 2030  (http://www.paraguay 
competitivo.gov.py/.);  USAID (2005);  and IMF (2010b). 
33 Government of Paraguay (2010), Paraguay para todos y todas 2010-20 .  Viewed at:  
www.sfp.gov.py/pdfs/Pu blicaciones/PLAN_DESARROLLO_SOCIAL.pdf. 
34 Government of Paraguay (2008), Plan Estratégico Económico y Social 2008-13 .  Viewed at:  
http://www.hacienda.gov.py/web-hacienda/index.php?c=436. 
35 For further details, see:  Ministry  of Agriculture and Livestock, at: 
http://www.mag.gov.py/Marco%20estrategico.pdf. 
36 For further details, see Ministry of Public Works and Communication, at:  
http://www.mopc.gov.py/mopc web/index.php?p=uep1822-inicio&m=uep1822. 
37 Under-Secretariat for Mining and Energy.  Viewed at: http://www.ssme.gov.py/VMME/sector%20 
energetico/PlandeEnerg/pese/00%20INICIO.pdf. WT/TPR/S/245 Trade Policy Review 
Page 26 
 
 
measures;  technical barriers to trade;  import lic ensing;  trade facilitation;  intellectual property;  
services;  non-agricultural market access, etc.  Pa raguay also benefited from bilateral trade-related 
technical assistance given by trading partners such as:  Brazil, the United States of America, India, Japan, Malaysia, the Republic of Korea, and Chinese Taipei. 
Table II.2 
WTO technical assistance activities in which Paraguay participated, 2006-2010 
Type of activity 2006 2007 2008 2009 2010* TOTAL 
 A P A P A P A P A P A P 
Distance learning 1 11 7 23 8 34 11 35 7 35 37 138 
Regional trade policy courses 1 2 1 1 0 0 1 2 1 2 4 7 
Courses in Geneva 0 0 1 1 1 1 4 3 1 1 7 6 
Internships 1 1 0 0 0 0 0 0 1 1 2 2 
Regional seminars ** 10 24 5 10 11 48 4 4 4 10 34 96 
Regional training 
activities ** 5 12 5 10 3 7 3 13 6 3 22 45 
* Partial data from the WTO Secr etariat, updated to 28/07/2010. 
** Regional seminars deal with specific topics;  regional training activities cover several topics. 
A Number of activities 
P Participants;  RTPCs = Regional trade policy courses. 
Source : WTO. 
49. In the course of this Review, additional Aid for Trade needs were identified in areas such as:  
compliance with notifications, especially on sanitar y and phytosanitary measures;  assistance in 
applying the provisions in the TRIPS Agreement at  the border;  services;  and anti-dumping.  The 
need to create an integrated national econom ic statistics system was also identified. 
(iii) Aid-for-Trade flows 
50. During the period 2006-2008, Aid-for-Trade funds committed represented 0.6 per cent of 
GDP (annual average).  This amounted to 42 per cen t of the total official development assistance 
received by Paraguay over this period.  A large proportion of these funds (US$203 million) were for 
an energy project financed by Japan in 2006.  The total amount of Aid for Trade disbursed was much lower than the amount committed during the peri od 2006 2008, totalling US$1 06.4 million or 38.8 per 
cent of the amount committed over the same period (Table II.3). 
51. The energy sector received most of the Aid -for-Trade commitments in 2006-2008 because of 
the financing committed by Japan in 2006 for th e building of a hydro-electric power station.
38  The 
second sector was agriculture, which received co mmitments exceeding US $19 million in 2006-2008, 
although disbursements were higher because of co mmitments made during years prior to 2006.  
Financial services was another subsector in whic h substantial commitments were made, exceeding 
US$20 million.  For trade regulations and policies,  both commitments and disbursements were around 
US$13 million during the period 2006-2008. 
                                                      
38 OECD database.  Viewed at:  http://stats.oecd.org/qwids/microdata.html?q=1:1+ 
2:137+3:100+4:1+5:4+6:2006+7:2+9:85&ds=CRS_SMPL&f=json. Paraguay WT/TPR/S/245 
 Page 27 
 
 
Table II.3 
Aid-for-Trade flows by sector, 2006-2008 
(US$ millions in 2008 constant dollars) 
Commitments Disbursements  
2006 2007 2008 2006 2007 2008 
Total Aid for Trade 214.2 21.4 38.6 12.7 26.4 67.3 
Economic infrastructure and services 207.3 8.8 20.6 3.7 5.2 22.7 
 Transport and storage 1.7 0.4 0.3 1.7 0.4 17.2 
 Communications 1.0 3.1 0.8 1.0 2.6 1.5 
 Energy 203.6 1.3 0.1 0.0 0.9 0.3 
 Banking and financial servi ces 0.9 2.9 18.5 0.5 0.8 2.8 
 Business and other services  0.1 1.1 0.9 0.4 0.6 0.9 
Production sector 6.9 12.6 18.0 9.0 21.2 44.6 
Agriculture, forestry, fishing 4.9 9.8 4.5 6.2 9.5 40.3 
Industry, mining, constructi on 1.5 1.7 1. 4 1.6 1.6 1.5 
 Industry 1.4 1.7 1.4 1.6 1.6 1.5 
 Construction 0.1 0.0 0.0 0.0 0.0 1.5 
Trade policies and regulations 0.4 1.0 11.8 1.1 10.0 2.8 
Tourism 0.2 0.1 0.3 0.2 0.1 0.1 
Source : OECD - Creditor Reporting System.  Vi ewed at:  http://s tats.oecd.org/Index.aspx?DatasetCode=CRSNEW on 27 July 2010. 
52. Paraguay's principal cooperation partner in the three years unde r consideration (OECD data, 
Table II.4) was Japan, as regards both commitments a nd disbursements.  It was followed, in order of 
importance, by Germany, Republic of Korea, Spain and the United States of America. 
Table II.4 
Aid-for-Trade flows by donor, 2006-2008 
(US$ millions in 2008 constant dollars) 
Commitments Disbursements Donor 
2006 2007 2008 2006 2007 2008 
All (I+II) 214.2 21.4 38.6 12.7 26.4 67.3 
I. Countries, total 214.2 21.4 17.9 12.1 17.0 65.4 
Canada 0.1 0.0 0.4 0.7 0.9 0.5 
France 0.0 2.6 0.3 0.0 2.6 0.3 
Germany 0.3 2.3 8.9 1.4 1.4 1.3 
Italy 0.0 0.0 0.0 0.0 0.0 0.2 
Japan 211.6 6.8 5.2 8.1 6.8 56.8 
Republic of Korea 0.6 4.1 0.9 0.6 3.1 1.7 
Spain 1.1 3.7 0.4 1.1 1.5 2.9 
United States 0.5 1.9 1.8 0.1 0.7 1.4 
II. Multilateral, total 0.0 0.0 20.7 0.6 9.4 1.9 
EU institutions 0.0 0.0 8.7 0.6 9.4 1.9 
IDB Fund for Special 
Operations 0.0 0.0 12.0 0.0 0.0 0.0 
Source : OECD - Creditor Reporting System.  Viewed at:  h ttp://stats.oecd.org/Index. aspx?DatasetCode=CRSNEW. 
53. Paraguay has also received Aid-for-Trade financing through the FOCEM, under which 
projects totalling close to US$116 million have been  approved in areas such as rehabilitation and WT/TPR/S/245 Trade Policy Review 
Page 28 
 
 
upgrading of highways, support for microenterpris es, construction and upgrad ing of drinking water 
and sanitation systems, sealing roads, and development.39 
54. In addition, Paraguay has received resources from the LAIA special technical assistance fund, 
intended primarily for business training. 
55. One of the projects financed that had the greatest impact during the period under review was 
the project for development of Paraguayan expor t enterprises' competitiveness (FOCOSEP), financed 
by funds from the European Union.  The funds we re committed in 2004 for a total of €13 million and 
for a period up to December 2008.  The project ha d three pillars:  reinforcing the national quality 
scheme, strengthening health inspection and moni toring agencies, and promoting clusters in the 
private sector.40  Its achievements include the constructi on, equipping and approval of sanitary and 
phytosanitary inspection laboratories;  training for officials in international standards;  and the 
creation of the National Information and Notifica tion System (SNIN) for notifications to the 
WTO (Chapter III(2)(viii)). 
56. Another project that had a significant impact was the development of REDIEX, administered 
by the United Nations Development Programme.  The project started to be implemented in 2005 and 
cost US$10.7 million.41  As a result of the implementation of REDIEX, a number of sectoral 
committees were set up to promote the diversifi cation of exports and to attract investment 
(Chapter III(3)(v)). 
57. A third project, the Single Window for Export s, was financed by  the Inter-American 
Development Bank (Chapter III(3)(i)).42 
 
                                                      
39 MERCOSUR online information.  Viewed at:  http://www.mercosur.int/focem/index.php?id= 
paraguay1. 
40 European Community Delegation in Paraguay.  Viewed at:  http://ec.europa.eu/delegations/ 
paraguay/documents/press_corner/newsletters/no6_abril_junio_2010_es.pdf 
41 United Nations Development Programme.  Viewed at:  http://www.undp.org.py/v3/ 
detalle_pyto2.aspx?suc_id=686&ar_id=Proyectos%20de%20Gesti per centC3 per centB3n. 
42 Single Window for Exports:  http://www.vue.org.py/index1.php.