TRADE POLICY REVIEW: PARAGUAY
27 and 29 April 2005

Concluding remarks by the Chairperson


See also:
> Press release: Stability of the trade and investment regime, crucial to achieve sustainable growth


This second Trade Policy Review of Paraguay has contributed to an improved understanding of its trade and related policies and of the challenges Paraguay faces. As was commented by our discussant, Ambassador Saborío, the most important part of a Trade Policy Review is the domestic dialogue it requires amongst government departments and other stakeholders. He also noted that the reports of the country under review and the Secretariat become important reference documents for all Members and I thank both the delegation of Paraguay and the Secretariat for the excellence of their work.

This meeting has provided an opportunity for transparency and for useful exchange. This was possible in good part due to the personal participation of Minister Bergen, Vice-Ministers Ramírez and Segovia, and Ambassador Gauto, as well as the excellent work of the rest of the Paraguayan delegation. The full support provided by the Paraguayan authorities to the whole review process shows the importance that Paraguay attaches to the multilateral trading system. I also thank Ambassador Saborío and Members for their thoughtful interventions, all of which contributed positively to our work.

Members highlighted Paraguay's resumption of economic expansion, after years of stagnation resulting in part from external shocks. Trade was instrumental to the recovery, playing as it does a key role in the economy. Paraguay was encouraged to consolidate the macroeconomic policies that have fostered growth, and to carry on further reforms to modernize the public sector, and strengthen its institutions.

Members commended Paraguay for its active participation in the WTO and its contribution to the Doha Development Agenda, and noted its efforts in favour of landlocked economies. The relationship between Paraguay's WTO and MERCOSUR commitments was raised by a number of Members.

Members called attention to Paraguay's modest investment record, and the suspension of the privatization process. It was suggested that, to foster investment, greater predictability and transparency in the investment regime were necessary. In this respect, further GATS commitments by Paraguay could play an important role.

Members agreed that Paraguay had taken significant steps to modernize and simplify its trade regime. Paraguay's applied tariffs have declined since 1997, although the overall average tariff on agricultural products remains higher than on other products. Questions were posed on other measures affecting imports, such as non-tariff charges, and on the notification and transparency of technical regulations and SPS requirements. The use of export taxes and controls during the period under review was questioned.

Enquiries were made about Paraguay's incentive programmes, such as the automotive and maquila regimes, and about the absence of subsidies or TRIMs-related notifications to the WTO. Members observed that the enactment of new public procurement legislation had brought greater transparency and predictability to government purchases. Members also took note of Paraguay's steps to enhance the protection of intellectual property rights, and encouraged it to continue these efforts.

Members were of the view that Paraguay should continue with the reform of its services sector. Members enquired, and Paraguay provided clarifications, about expected changes to the public banks legislation, treatment of foreign investors in banking and the development of the telecommunications sector. It was noted that Paraguay's international transportation costs remain amongst the highest in the Western Hemisphere, and Paraguay was prompted to consider opening the sector to further competition.

I thank the Paraguayan delegation for the written answers provided to Members' questions.

In conclusion, I welcome Paraguay's ongoing efforts to strengthen its institutions and to use trade as a catalyst for growth, and encourage it to enhance its multilateral commitments to give greater predictability to its trade and investment regimes. At the same time, I invite Members to address the trade barriers and market distortions that affect Paraguay's exports. With these remarks I conclude the Trade Policy Review of Paraguay.