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Paraguay says China's entry may “threaten” Mercosur partners

The President of Paraguay, Mario Abdo Benítez, expressed this Thursday (21) concern about the possible entry of China into the region supported by a free trade agreement, and warned that this could threaten Mercosur’s partner countries.

“The entry of China with preferential tariffs to the region is an issue that, we cannot deny, worries Paraguay and the entire region”, Abdo Benítez told journalists after the conclusion of the summit of Mercosur presidents in the Paraguayan city of Luque.

The president reacted to Uruguay’s announcement that it would start talks with China on a free trade treaty, one of the issues that have caused friction among Mercosur members.

Abdo Benítez, who handed over the temporary presidency of the economic bloc to Uruguay, commented that China has “very competitive costs”, which, in his opinion, “ could threaten” industries in Paraguay, Argentina and Brazil.

In addition, he reaffirmed the position of his government rno to move forward as a bloc towards any trade agreement.

“We are obviously concerned about the possibility of negotiating without an agreement and that we can all defend the policies that we consider important for our countries”, added.

Asked about relations between Paraguay and Taiwan, considered a rebel province by China, the president clarified that “Mercosur is a separate bloc”.

“ In fact, neither Paraguay nor Taiwan have any problem with Paraguay having trade relations with China,” he argued.

But, when asked about the possibility of negotiating a link with Taiwan, Abdo Benítez rejected.

Mercosur partners concluded two days of meetings this Thursday, the first face-to-face meetings since the beginning of the pandemic.

The meetings were marked by disagreements on how to approach trade agreements with third parties, as some countries advocate decisions by consensus, while o others support decision-making alone, without excluding linking with partners later.

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