Paraguay’s Terport rising to global standards

Paraguay’s Economy

Paraguay’s market economy enjoyed steady growth of 4% on average per year since 2014. The economy has a gross domestic product (GDP) of $39 billion and per capita GDP of $12,800. Exports were $11.73 billion mainly to Brazil, Argentina and Chile and imports were $11.35 billion from China, Brazil, Argentina and the United States of America in 2017 based on U.S. Central Intelligence Agency (CIA) reports of 2019.

Import goods to Paraguay are mostly manufactured goods such as household items, electronics, batteries, perfumes, toys and vehicles. Exports are mainly raw materials of sugar, wood, coal, wet-blue and grains explained Gunther. The European Union (EU) is Paraguay’s third trading partner after Brazil and Argentina for ten percent of Paraguay’s trade. The EU imports from Paraguay are mostly agriculture products.

After twenty years of trade talks, Brazil, Argentina, Uruguay and Paraguay agreed in June to open markets to 28 EU member states. This milestone will be the Mercosur-EU Agreement (MEUA). These four South American countries form the Southern Common Market called the Mercosur trade bloc. Paraguay is a founding member since 1991. They will benefit by exporting more beef, sugar, poultry among other farming products. However, ratification by the 28 EU members and European Parliament before implementation is uncertain. There is more assurance by the Mercosur countries’ congresses by 2021.

France and Ireland farmers have concerns from a rise in beef imports as well as environmental groups since Brazil clears land for cattle farming. The EU will benefit from access to Mercosur markets for industrial products and for agri-food products since high Mercosur tariffs will decrease on dairy products, confectionaries, wines and soft drinks. Current tariffs range from 20 percent to 35 percent by these Mercosur countries for these EU exports, according to a July 25 CNBC on-line report.

The MEUA will reduce and eliminate tariffs for more than 90 percent of products between the two blocs over the next 15 years. The two regions form markets for 780 million people valued at over $1 trillion. The Mercosur bloc is also seeking trade deals with Canada, the U.S.A., Korea, Singapore and a bloc made up of Iceland, Norway, Liechtenstein and Switzerland known as the European Free Trade Association (EFTA). Political elections in both trading blocs and Brexit could further delay ratification of these agreements.

Paraguay is in an economic recession this year, so volumes are not growing. “We expect to close the year with slightly less volume than last year so this would be approximately 60,000 TEUs. Our current operational capacity is over 100,000 TEUs without having to move to phase 2 of our macro project,” explained Gunther.

Paraguay will remain competitive in any economic scenario and further integrate its trade with global standards by modern technologies at the Terport Villeta. Terport was the first to implement Navis N4 in Paraguay in 2014 in San Antonio. Navis, of Cargotec Corporation, provides operational technologies to the shipping supply chain to optimize planning and management of containers and equipment moves in a terminal. “We now operate with Navis in both terminals with all operations planned and measured in real-time. Navis was a major investment for us and a major jump in our service quality and transparency for better communications with all parties,” concluded Gunther.