Brussels, 12 June 2014
Mission for Growth: European SMEs seeking business opportunities in Paraguay
After visiting Panama and Argentina, European Commission Vice President Antonio Tajani will travel to Paraguay on 14th June accompanied by a large business delegation composed of more than 20 companies and 3 business associations representing 9 EU Member States. Participating companies generate jobs for more than 90.000 people and represent a turnover of around € 56 bn, i.e. more than the GDP of Slovenia and Estonia that is € 53 bn (2013). The participating business associations represent more or less 280.000 European companies, generating additional jobs and turnover.
While in Paraguay, Vice President Tajani will have a meeting with the President of the Republic H.E Horacio Cartes, to discuss key issues of industrial cooperation and economic relations between the EU and Paraguay. A presentation of the business environment in the country by Paraguayan authorities and by the private sector will follow. The Paraguayan Ministers for Industry and Commerce Gustavo Leite and Vice-President Tajani will officially launch the EU Investment Forum on 23-24 October 2014 aimed to facilitate the economic integration of Paraguay in international trade and EU investment in Paraguay. A B2B session will allow European and Paraguayan entrepreneurs to find cooperation partners. In the EU delegation the following industrial sectors are represented: environmental industry, information technology, construction, energy, infrastructure and aerospace.
This mission is also a clear evidence of the importance the EU attaches to the commitments made during the EU – CELAC Summit (Summit of the EU and the Community of Latin American and Caribbean States) held in Santiago de Chile in January 2013. Bringing together the economic, social and environmental dimensions of the bi-regional partnership, the Summit gave new impetus to cooperation and the building of common positions on global issues and shared challenges. The next Summit of Heads of State and Government of the EU – Latin America and Caribbean will take place in Brussels in 2015.
This mission is part of the “Missions for Growth”, so designed to help European enterprises, in particular SMEs, to better profit from fast growing emerging international markets. More specifically, this visit will allow concrete discussions on industrial cooperation, as well as consolidating EU-Paraguay cooperation in strategic areas and encouraging the presence and development of EU firms in Latin America.
Paraguay: economic background
Surface area: 406.752 square kilometres
Population: 6.7million (2013)
GDP in 2013: € 22.2
GDP per capita in 2013: € 3 313.4
Economic growth in Paraguay is one of the most dynamic in the world, with an average of 4.6% over the past 10 years, the second highest growth in the world in 2013 with 14.4% and 4.8% projected for 2014, above the regional average. Paraguay is also among the most open economies in Latin America.
EU-Paraguay trade relations
EU is a key partner in terms of total trade. This is the second destination of Paraguayan exports (14.3% of total value in 2013) after the Mercosur. Paraguay is also the 3rd soybeans exporter on the EU market.
Imports from Paraguay are dominated by agricultural products and raw materials (92%). EU exports to Paraguay are dominated by manufactured goods, in particular machinery, transport equipment and chemicals.
Further integration of Paraguay and the EU is possible and beneficial to both parties as it would not only generate higher growth but also a healthy diversification for European and Paraguay companies.
Paraguay is one of the founding members of Mercosur, which represents the fourth largest economic group in the world (after the EU, NAFTA and ASEAN).
EU-Paraguay business relationships are mutually beneficial and have experienced a steady increase in recent years. Compared with the regional average, Paraguay has low cost of electricity, labour and low taxation.
The Government has made the international promotion of the country a priority and the authorities make efforts to resolve certain weaknesses facing the country, such as the fact the country is landlocked, a reputation for having a high level of corruption with transparency, and low level of qualification of human resources by improving the national education system. In 2013, Congress passed the Public-Private Partnership (PPP) law that seeks to mobilize private capital to finance infrastructure projects, including in social sectors.
This new legal framework, together with the factors mentioned above, might be interesting and provide incentives for service providers and companies in the EU. Since 2011, the EU supports the Ministry of Industry and Trade in AIEP project that aims to facilitate the economic integration of Paraguay in international trade. The project includes activities to strengthen coordination between the public, private and foreign companies.
This visit to Paraguay is part of a sequence of three “Missions for Growth” taking place from 12 to 14 June 2014, to the following countries: Argentina, Panama and Paraguay.