Paraguay - International trade

Paraguay's main trading partners are Brazil, Argentina, the United States, the Netherlands, Germany, Italy, Japan, and Switzerland. Paraguay exports soybeans, meat products, cotton, oils, and timber principally to

Trade (expressed in billions of US$): Paraguay
Exports Imports
1975 .176 .206
1980 .310 .615
1985 .304 .502
1990 .959 1.352
1995 .919 3.144
1998 N/A N/A
SOURCE: International Monetary Fund. International Financial Statistics Yearbook 1999.

Brazil and Argentina, as well as Germany, the Netherlands, Italy, and Sweden. Exports in 2000 totaled US$3.5 billion (not including the black market ). Most imports come from Brazil, Argentina, the United States, and Japan, including machinery, petroleum and petroleum products, chemicals, lubricants, electronics, consumer goods , and cars. Local industries rely heavily on these imported goods. Imports in 2000 totaled US$3.3 billion (not including the black market). Smuggling has been prevalent in Paraguay, and in the 1980s smuggling reached new heights, severely skewing the nation's official trade figures. Computers, sound equipment, cameras, liquor, and cigarettes are among the most popular items smuggled across the Brazilian and Argentine borders. Smuggling decreased somewhat in the 1990s, but the informal economy is still estimated to be at least as large as the formal economy.

U.S./Paraguayan economic relations are strong as of the early 21st century. Each year the United States imports more than US$40 million of goods from Paraguay and exports approximately US$1billion in goods to Paraguay. The United States has more than a dozen large multinational firms with Paraguayan subsidiaries, including firms in the computer, manufacturing, agro-industrial, banking, and service industries. The U.S. also has more than 75 businesses with agents in Paraguay. The Cold War of the 1970s and 1980s actually worked in Paraguay's favor. Despite numerous human rights violations, Paraguay still received substantial aid and trade privileges from the U.S., provided that Paraguay align itself with the United States against the Soviet Union. The U.S suspended its Generalized System of Preferences—a trade agreement with Paraguay—from 1987 to 1991, due to poor labor laws and working conditions in Paraguay.

Paraguay does belong to several international trade agreements and organizations. Aside from its trade agreement with the U.S., Paraguay also belongs to Mercosur, a free trade and common market agreement between the Southern Cone nations (Paraguay, Uruguay, Argentina, and Brazil). Joining Mercosur in 1991 benefited Paraguay greatly. Trade between Mercosur members increased from US$5 billion in 1991 to US$17 billion in 1996, and the Mercosur market accounted for 5 percent of the world's total GDP in the late 1990s, making the Mercosur market very attractive to foreign investors. Paraguay is a member of the Latin American Integration Association (formerly the Latin American Free Trade Agreement) as well.

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