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Constructing diversification

Liz Cramer, Paraguay‘s minister for industry and commerce.jpg

As October 2019 was nearing its end, the focus for Argentina – and for many international investors interested in the region – was on the final head-to-head presidential election, scheduled for Sunday October 27.

Commentators were in overdrive talking about the importance of the election for the country – as well as it being crucial for its neighbours. What was less commented on (in fact it was largely ignored) was the ratification of a trade treaty between Argentina and Paraguay, pushed through on Friday October 25.

That agreement, which created a legal treaty for the importation and exportation of cars and car components, was arguably more important in the long-term for Paraguay’s economic development than the outcome of the presidential election. Along with a similar treaty with Brazil, which was ratified by the Brazilian Congress in February 2020, it creates the possibility for Paraguay to begin making plans to build a car industry in the country.

“Paraguay is a small internal market so foreign direct investment (FDI) is almost always done with a view to exporting to the regional market,” says Liz Cramer, Paraguay’s minister for industry and commerce, who points to the deal’s significance. “The car industry is one of the biggest in the world and, incredibly, auto also moves about 300 other parallel industries.

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