The trade agreement between the European Union and Mercosur, in force since May 1, 2026, opens zero-tariff or preferential access for 95% of Paraguayan exports to the European market, according to data from the Foreign Ministry. The treaty is considered by lawyer and strategic adviser Daniel Núñez Martínez to be a landmark for the country's economy, which is now consolidating itself as a production and export platform oriented toward Europe.
For Núñez Martínez, the agreement goes beyond a traditional trade treaty. "It constitutes international recognition of decades of macroeconomic stability, fiscal discipline, and economic predictability built by Paraguay," he stated. Among the most benefited sectors are agribusiness, biofuels, and manufacturing production.
The text includes flexible rules of origin and adjustment periods that favor emerging economies. Paraguay obtained exclusive quotas for products such as organic sugar, biofuels, and pork, as well as origin conditions that recognize the country's actual productive structure. Until May 1, exporting to Europe meant facing tariffs and sanitary barriers without preferences, competing on equal terms with producers that already had privileged access.
The adviser highlighted that Paraguay offers a combination of low tax burden and logistical facilities that is difficult to replicate in the region. The tax burden is reduced, and the maquila regime allows companies to pay only 1% on the exported value added, with income tax exemption on export operations. Under this regime, companies can incorporate up to 45% of inputs from outside Mercosur and still export to Europe with full tariff preferences. In Brazil, the corporate burden exceeds 34% in income tax alone.
"A company established in Paraguay under the maquila regime operates with the lowest tax burden on the continent and accesses the European market with a preferential tariff. This combination does not exist anywhere else on the South American map," stated Núñez.
The arrival of European capital had already been growing before the agreement. The European Union is currently the largest foreign investor in Paraguay, with a balance of $2.452 billion, according to the Central Bank of Paraguay, led by the Netherlands. "Europe did not come to visit Paraguay. It came to stay," the adviser pointed out.
In 2025, the Paraguayan economy recorded growth of 6.6%, the highest in twelve years. In addition, Moody's granted investment grade (Baa3) in July 2024 and Standard & Poor's upgraded the rating to BBB- in December 2025. "Before, the foreign investor arrived in Paraguay despite the absence of a treaty. From now on, they will arrive because of it," stated Núñez.
The adviser considered that the agreement offers greater legal security and predictability for long-term projects, but warned that the main challenge will be preparing both the public and private sectors to take advantage of the opportunities opened by the treaty.