# Paraguay Seeks to Balance China Trade Opportunities with Taiwan Diplomatic Ties

*Paraguay expresses openness to trade with China, provided it does not affect its diplomatic ties with Taiwan.*

July 3, 2026 · World

## At a glance

- Paraguay is open to trade with China without severing ties with Taiwan.
- Foreign Minister Ruben Ramirez made the statement during a Mercosur summit.
- Paraguay is Taiwan's only South American ally and does not have diplomatic relations with China.
- President Santiago Pena criticized the EU-Mercosur deal for favoring other bloc members.
- Bangladesh can learn from Paraguay's approach to balancing trade and diplomatic relations.

Paraguay has indicated it is open to establishing trade relations with China, as long as it does not have to sever its diplomatic ties with Taiwan. This stance was articulated by Paraguay's Foreign Minister Ruben Ramirez during a meeting on the outskirts of Asuncion. 'Paraguay does not refuse to establish trade relations with China, as long as there are no conditions regarding the diplomatic relationship that Paraguay has and maintains with Taiwan,' Ramirez stated.

## Mercosur Summit Context

The foreign minister's comments came during a summit of the South American Mercosur bloc, where leaders are meeting to launch trade negotiations with Japan following a deal with the European Union in January. Brazilian President Luiz Inacio Lula da Silva suggested that talks with China were also being considered.

## Paraguay's Unique Position

Paraguay is Taiwan's sole ally in South America and the only Mercosur member that does not maintain diplomatic relations with China. Taiwan, which Beijing claims as part of its territory, has only 12 diplomatic allies after China systematically poached others to isolate the self-governed island.

## China's Stance

China has urged Paraguay to 'make the right choice' and cut ties with Taiwan. However, Paraguay remains firm in its commitment to Taiwan while exploring trade opportunities with China.

## EU-Mercosur Deal Criticism

The summit also saw Paraguayan President Santiago Pena criticize the 'bitter taste' left by the EU-Mercosur deal, which he believes favors other members of the bloc. Pena called for equal distribution of export quotas among Mercosur partners before the EU ratifies the deal, labeling it a 'question of justice.'

## Significance for Bangladesh

This development is significant for Bangladesh as it highlights the complexities of international trade relations and the delicate balance countries must maintain between economic interests and diplomatic alliances. As a nation with growing trade ambitions, Bangladesh can learn from Paraguay's approach to navigating these intricate relationships.

## Sources

- BSS

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Source: https://pulsetoday.com.bd/en/world/paraguay-open-to-china-trade-while-maintaining-taiwan-ties