Mercosur

Mercosur has not yet reached a consensus on the allocation of export quotas provided for in the agreement with the European Union, with Paraguay advocating for an equitable distribution of 25% for each bloc member.

The German ambassador to Paraguay, Gordon Kricke, stated that there is growing interest from German companies in investing in the country, especially in the green energy, agribusiness, and maquila sectors, driven by local stability and the Mercosur-European Union agreement.

Lula's statements on the War of the Triple Alliance, justifying the military budget, reignite crisis with Paraguay, which had already suspended Itaipú negotiations and recalled its ambassador in 2025, amid tensions over Brazilian intervention in Uruguay and 19th-century territorial annexation.

Paraguayan President Santiago Peña has enacted the law approving the Mercosur agreement to provide consular assistance to citizens in countries where their nation lacks representation.

A delegation of business leaders from Santa Catarina and Rio Grande do Sul is in Asunción to explore investment opportunities in Paraguay, facilitated by the Paraguay-Brazil Chamber of Commerce (CCPB) and hosted by the Paraguayan Industrial Union (UIP).

Paraguay's maquila export regime grew by 25% in the first half of 2026, reaching $717 million, with the Mercosur trade bloc as its main destination and a 6% increase in jobs.

Spanish Ambassador Javier Parrondo highlighted the 150,000 Paraguayans residing in Spain and projected that the trade agreement between the European Union (EU) and Mercosur will significantly boost bilateral economic relations.

Paraguayan authorities are assessing the impact of the provisional application of the EU-Mercosur agreement, which creates a free trade zone after more than 25 years of negotiations, as they await the final ratification of the political component by the European Parliament.

The Paraguayan market for finished cattle is maintaining stable prices despite downward pressure in Brazil, supported by limited supply and robust international demand, with record values for beef exports.

Paraguay has launched the Validador PY platform to verify digital documents across the Mercosur trade bloc, along with a new version of its service provider registry, Repse 2.0, aiming to reduce bureaucracy and combat informality.

Paraguayan President Santiago Peña reaffirmed his country's alignment with the United States and Taiwan and declared that he will not yield to pressure from China to establish a formal negotiation channel with Mercosur, linking the Chinese pressure to the recent 5G network tender.

Mercosur has approved an agreement granting regional legal validity to the digital identities of its member countries, allowing citizens and businesses to carry out cross-border procedures online without paper documentation.

Paraguay conditions trade agreement negotiations with China on maintaining its diplomatic ties with Taiwan, highlighting progress in Mercosur's talks with Japan and Bolivia's integration into the bloc.

Mercosur and Japan have begun negotiations for an Economic Partnership Agreement that could create one of the world’s largest free trade zones, with a combined GDP of $7 trillion and a focus on sectors such as agribusiness, energy, and the automotive industry.

The foreign ministers of Paraguay, Uruguay, and Bolivia signed the formal reactivation of the Urupabol integration mechanism in Asunción, which aims to strengthen political coordination and cooperation in areas such as infrastructure and trade.

The Mercosur Summit kicked off in Luque with a focus on the trade agreement with the European Union and negotiations over the Itaipú energy tariff.

Paraguay's Congress will hold a joint session on Tuesday, June 30, to receive the president of Chile, José Antonio Kast, with protocol honors on the occasion of the Mercosur Heads of State Summit.

The EU-Mercosur trade agreement has been provisionally in force since May 1, pending final approval by the European Parliament, which depends on a review by the Court of Justice of the European Union regarding the pact's compatibility with the European bloc's treaties.

The European Union's ban on Brazilian beef imports opens up a historic opportunity for Paraguay in a global scenario where supply falls short of demand, according to specialist Marcos Medina.

Former Senator Sixto Pereira, from the Tekojoja party, stated that Paraguay is currently experiencing "the government of the mafia and organized crime," recalling the 14th anniversary of the removal of then-President Fernando Lugo on June 22, 2012, through a political trial in Congress. He emphasized that this political situation has significant implications for foreign investors, diplomats, and regional observers due to the resulting political and economic instability affecting business and international cooperation.

The Paraguayan government has opened a public tender worth G. 10 billion (approximately USD 1.6 million) to contract protocol event organization services for the Mercosur Summit, which will be held on June 29 and 30, 2026, in Asunción, including hospitality, catering, protocol coordination, and institutional gifts featuring Paraguayan handicrafts.

Japan and Mercosur announced the formal start of negotiations for an Economic Partnership Agreement during the G7 Summit in Évian-les-Bains, France, following a meeting between Japanese Prime Minister Sanae Takaichi and Brazilian President Lula.

The MIC met with European ambassadors to assess access for Paraguayan products to the EU market under the Mercosur-EU agreement, with a focus on zero-tariff quotas in sectors such as meat, rice, honey, and organic sugar. The agreement's entry-into-force date requires independent confirmation.

Brazil has enacted the Agreement on Police Cooperation Applicable to the Border Areas of Mercosur, signed by President Lula and published in the Official Gazette of the Union, allowing pursuits and joint operations among the security forces of Brazil, Argentina, Paraguay, and Uruguay in border zones.