WT/TPR/M/360

29 November 2017

(17-6489) Page: 1/45

Trade Policy Review Body

20 and 22 September 2017

TRADE POLICY REVIEW

PARAGUAY

MINUTES OF THE MEETING

Chairperson: H.E. Mr Juan Carlos Gonzalez ()

CONTENTS

1 INTRODUCTORY REMARKS BY THE CHAIRPERSON ...... 2 2 OPENING STATEMENT BY THE REPRESENTATIVE OF ...... 4 3 STATEMENT BY THE DISCUSSANT ...... 9 4 STATEMENTS BY MEMBERS ...... 15 5 REPLIES BY THE REPRESENTATIVE OF PARAGUAY AND ADDITIONAL COMMENTS ...... 37 6 CONCLUDING REMARKS BY THE CHAIRPERSON ...... 44

Note: Advance written questions and additional questions by WTO Members, and the replies provided by Paraguay are reproduced in document WT/TPR/M/360/Add.1 and will be available online at http://www.wto.org/english/tratop_e/tpr_e/tp_rep_e.htm.

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1 INTRODUCTORY REMARKS BY THE CHAIRPERSON

1.1. The fourth trade policy review (TPR) of Paraguay took place on 20 and 22 September 2017. The Chairperson, H.E. Ambassador Juan Carlos Gonzalez (Colombia) welcomed the delegation of Paraguay, led by H.E. Ambassador Luis Fernando Ávalos, Vice-Minister for Economic Relations and Integration in the Ministry of Foreign Affairs, and the discussant, H.E. Ambassador Héctor Casanueva ().

1.2. The Chairperson recalled the purpose of trade policy reviews and the main procedures for the meeting. The report by Paraguay was contained in document WT/TPR/G/360 and that of the WTO Secretariat in WT/TPR/S/360.

1.3. Written questions from the delegations of ; Australia; ; Canada; Chile; Colombia; Dominican Republic; European Union; Mexico; and the had been submitted within the deadline. Written questions from the delegations of Costa Rica; and Thailand had been submitted after the deadline.

1.4. During the previous TPR meeting, Members had praised Paraguay for its outstanding economic performance. In its report for the current review, the Secretariat noted the continued robust economic performance over the period covered, with real GDP growing at an average annual rate of 4.7% in 2011-2016. At the time of the previous review, Members had invited Paraguay to diversify its products and markets to lower its vulnerability to external shocks. Members would undoubtedly be interested to learn more about the initiatives taken by the Government of Paraguay to ensure continued economic growth and the strategies aimed at diversifying the country's trade in terms of export products and destinations.

1.5. At the time of the 2011 review, Paraguay had been commended for the low levels of and other protection and for its efforts to streamline the business environment and facilitate trade. On the other hand, several Members had urged Paraguay to relax certain prior registration and licensing requirements and to eliminate consular fees and the requirement to use customs brokers. The 2017 Secretariat report noted that in recent years a number of further trade facilitation initiatives had been implemented and that Paraguay had ratified the WTO Agreement on Trade Facilitation. In some of their questions concerning this review, Members sought further clarification on Paraguay's import and export licensing regimes and wanted to know when the "valuation fee" and the reference value used for clothing products would be eliminated.

1.6. With respect to Paraguay's intellectual property rights regime, in 2011 Members had urged Paraguay to strengthen enforcement and to undertake legislative reforms in the areas of patents and geographical indications. According to the 2017 Secretariat report, Paraguay had enacted a series of decrees to implement laws governing patents, copyright and related rights and trademarks during the review period, also adopting a new law on geographical indications and designations of origin and establishing the National Intellectual Property Directorate. Several of the questions submitted by Members for the current review referred to Paraguay's intellectual property regime, and Members would undoubtedly be interested to receive further information concerning the implementation of these legislative and institutional reforms and the country's intellectual property strategy in the course of the meeting.

1.7. In the previous review of its trade policies, Paraguay had also been encouraged to improve the transparency of its government procurement regime, to reconsider the preferences granted for domestic products, and to envisage joining the WTO Plurilateral Agreement on Government Procurement. According to the 2017 Secretariat report, over the review period Paraguay had continued to modernize its legislative framework in order to make government procurement procedures more flexible and transparent. Several of the questions submitted by Members for the current review sought to obtain further details on the procedures applied.

1.8. Another subject of interest in the 2011 TPR had been that of Paraguay's incentive schemes to attract investment and promote , including an analysis of the related costs and benefits. Various Members had urged Paraguay to notify these schemes to the WTO. This continued to be an area of interest to Members in the current review, with various questions relating to VAT exemptions applied, Paraguay's free zone and maquila regimes, and incentives offered under the

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- 3 - national automotive policy. Some Members reiterated a call for Paraguay to notify its incentive programmes to the WTO.

1.9. With respect to competition policy, in 2011 Members had encouraged Paraguay to adopt competition policy legislation to improve business predictability and attract foreign direct investment. The 2017 Secretariat report noted the enactment of a competition law in 2013 and the issuing of its implementing Regulations. A National Competition Commission was up and running and had already analyzed a number of mergers and concluded other investigations. Several Members submitted questions concerning competition legislation and its application and would undoubtedly welcome additional information on institutional developments in this regard.

1.10. During Paraguay's preceding trade policy review, Members had also suggested that the country could benefit from further services liberalization in areas such as transport and telecommunications. Several questions from Members in the current review were aimed at obtaining further details about policies on services, especially financial, telecommunications, energy and tourism services.

1.11. Lastly, in the context of the present review, other areas in which Members' questions stated an interest in receiving more information were: the new legislation on electronic commerce; ; regional and preferential trade agreements; various aspects of Paraguay's investment regime; and SPS and TBT issues.

1.12. There was certainly a wide range of topics on which to expand in the current review, and the Chairperson looked forward to an interesting and fruitful exchange of views.

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2 OPENING STATEMENT BY THE REPRESENTATIVE OF PARAGUAY (H.E. AMBASSADOR LUIS FERNANDO ÁVALOS)

Opening remarks

2.1. First of all, we would like to express special thanks to the delegations of countries that are friends of Paraguay for their presence in this room and for their interest in our country. Our thanks also go to Ambassador Juan Carlos Gonzalez for chairing this meeting and for his introductory remarks, and to the Permanent Representative of Chile, Ambassador Héctor Casanueva, who is doing us the honour of acting as our discussant.

2.2. The interest evidenced by our receiving close to 150 questions reflects, as I have just said, growing interest in our country's share of trade. Particular thanks are due to the WTO Secretariat for its comprehensive and excellent report.

2.3. The delegation of Paraguay is composed of senior officials of the Ministries of Industry and Trade, Finance, and Foreign Affairs, the , the National Customs Directorate, and, as goes without saying, skilled personnel from the Permanent Mission of Paraguay to the .

Introduction, economic environment

2.4. I would like to begin my statement by emphasizing that Paraguay experienced profound changes during the period under review, recording levels of economic growth and social development that trended strongly upwards, as evidenced not only by the economic indicators published by the various international organizations and agencies but also by the impact they had on people's daily lives.

2.5. The fourth WTO trade policy review of Paraguay is an opportunity to take a detailed look at the country's trade policies over the past six years, underpinned by Paraguay's National Development Plan 2030, whose objectives are to consolidate the foundations for high, sustainable and socially inclusive economic growth. In designing and implementing this Plan, the Paraguayan Government focused on three main lines of action: poverty reduction and social development; inclusive economic growth; and the country's presence on the global scene.

2.6. World economic developments saw major volatility on financial markets, uncertainty over international commodity prices, and the resurgence of protectionist measures. The period also saw a slowdown in regional and global economic growth, compounded by serious questioning of free trade and multilateralism. Nonetheless, Paraguay's economic performance has been positive, underpinned by sound macroeconomic fundamentals, more buoyant domestic demand, conditions conducive to external finance and a considerable rise in exports, especially of oilseeds, products, and a vast supply of clean and renewable electricity. The Paraguayan economy has been marked by a high level of openness to trade (72% of GDP) and free movement of capital, with the country starting to tap the international capital market during the review period, with long-term and low-cost issuances that bear witness to investor confidence.

2.7. The level of economic activity in Paraguay during the period under review was influenced by the design and implementation of market-oriented economic policies that made for an excellent business climate, together with good harvests for the main crops, a steady increase in livestock production, the opening of new markets, an expansion of manufacturing and a rise in public and private construction, among other factors.

2.8. Annual growth in real GDP averaged 4.8% between 2011 and 2016, and in 2013 was the second highest in the world, at 14%. The services sector is the chief component of GDP, with a 43.9% share in 2016, followed by the agricultural sector (agriculture, livestock, forestry and fisheries), accounting for 25.2% of GDP, and manufacturing, which represented 10.7%. Paraguay is the world's sixth largest producer of soya bean and by-products, and the 14th largest producer of fresh or chilled meat. It is the world's top exporter of clean and renewable electricity, the fourth largest exporter of oilseeds, the seventh largest exporter of frozen beef, and the ninth largest exporter of and .

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2.9. Exports and imports of goods and services accounted for 83.7% of GDP in 2016, and the volume of exports has increased in relation to the preceding review period.

2.10. Paraguay's situation as a landlocked has historically shaped its policies, since its geographical location may entail additional costs, affect connectivity and thus constitute a drawback as we seek to do business. Our reaction to these circumstances is to work actively on integrating into the global economy. We support the adoption and entry into force of the Trade Facilitation Agreement, and in parallel we are seeking to develop policies to promote structural economic transformation. We are striving to generate greater value added for our production in order to mitigate the impact of our export transport costs and are promoting investment in infrastructure to increase our connectivity. Our aim is to become a platform for doing business in and generally.

2.11. We are very proud to say that in recent years Paraguay has become the fastest growing economy in MERCOSUR.

Main economic reforms

2.12. I would now like to focus on the key reforms which the National Government adopted in the past six-year period and which form part of the aforementioned long-term strategy aimed at achieving high, sustainable and inclusive growth:

i. Paraguay introduced the Law on public-private partnership1, which seeks to promote investment in public infrastructure and the provision of services through public-private partnership. The Law also promotes investment in the production of goods and the provision of public services.

ii. A new Law on the protection of investment2 was enacted in order to promote investment in capital-intensive industries. It protects the remittance of capital and profits and provides guarantees against administrative and judicial practices that could be deemed discriminatory.

iii. Paraguay introduced domestic legislation on electronic commerce3, whose purpose is to regulate trade and procurement carried out by electronic or technologically equivalent means. This legislation confers legal force and validity on contracts entered into remotely by electronic means and recognizes the validity of electronic invoicing for accounting and tax purposes.

iv. The Law on micro, small and medium-sized enterprises4 was enacted in order to provide a regulatory framework to promote and foster the establishment, development and competitiveness of MSMEs, with a view to integrating them into the formal structure for producers of goods and services as well as into international markets.

v. The Law on the protection of competition5 was enacted to protect and promote free market competition and to prohibit and punish abuse of a dominant position and regulate mergers. The National Competition Commission was created under that Law.

vi. Paraguay adopted the Law on consumer protection6, which established the Secretariat of Consumer and User Protection.

vii. It also adopted the Law on fiscal responsibility7, which limits the central government deficit to 1.5% of GDP and provides that the annual increase in primary current

1 Law No. 5102/13 on the promotion of investment in public infrastructure and the expansion and upgrading of goods and services provided by the State. 2 Law No. 5542/15 on investment guarantees, the promotion of job creation, and economic and social development. 3 Law No. 4868/13 on electronic commerce. 4 Law No. 4457/12 on micro, small and medium-sized enterprises. 5 Law No. 4956/13 on the protection of competition. 6 Law No. 4974/13 on the Secretariat of Consumer and User Protection. 7 Law No. 5098/13 on fiscal responsibility.

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expenditure for the public sector may not exceed the year-on-year rate plus 4%. As a result the deficits in the overall central government balance have been moderate.

viii. The Law on free public access to public information and transparency in government8 was enacted in order to promote transparency on the part of the State and guarantee the right of access to public information for all by implementing procedures, time-frames, derogations and penalties.

ix. The National Intellectual Property Directorate (DINAPI)9 was established as the institution responsible for implementing national policy on intellectual property and for the administrative enforcement of the rules safeguarding intellectual property rights.

x. Paraguay ratified the WTO Agreement on Trade Facilitation10 and established the National Trade Facilitation Committee, which comprises various institutions involved in trade operations and representatives of the private sector.

xi. It also introduced a series of facilitation mechanisms to enhance the business climate and boost production and technological development.

xii. It enacted a Law establishing rules on transparency with respect to joint-stock companies, leading to the elimination of public limited companies and thus increasing transparency.

xiii. I would also like to emphasize that since March 2017, Paraguay has been part of the Development Centre of the Organisation for Economic Co-operation and Development (OECD), an international forum that will enable the country to coordinate the design and implementation of public policies and good practice to maximize inclusive growth and economic and social development, and to receive advice and share experiences via a platform for dialogue with OECD member countries.

xiv. As part of its work with the OECD, Paraguay's multi-dimensional country and public governance reviews have begun. This is aimed at underpinning the design of public policies and strategies that promote development in a holistic sense, and at improving the efficiency and sustainability of government functions. Likewise, Paraguay is participating in various OECD initiatives, such as the Global Forum on Transparency and Exchange of Information for Tax Purposes and the Base Erosion and Profit Shifting (BEPS) Project.

Commitments to the multilateral trading system

2.13. During the period under review, Paraguay actively participated in the negotiations taking place in the World Trade Organization (WTO), especially those concerning the packages agreed at the Bali (2013) and Nairobi (2015) Ministerial Conferences. It should be noted that Paraguay played an active role in the discussions to reach the Agreement on Trade Facilitation and the Decision on Export Competition in agriculture.

2.14. Paraguay is in favour of strengthening of the WTO's negotiating pillar and is therefore a member of various negotiating groups; it also coordinates the Group of Landlocked Developing Countries. We are confident that the Agreement on Trade Facilitation will become a key tool in reducing the logistics costs of , especially the additional costs incurred by landlocked developing countries as a result of transit procedures through third countries.

2.15. Paraguay attaches considerable importance to the three pillars of the agriculture negotiations (market access, export subsidies and domestic support) in achieving genuine liberalization and reform of agricultural markets. It considers it important to secure positive outcomes on domestic aid and market access at the forthcoming in Buenos Aires.

8 Law No. 5282/14 on free public access to public information and transparency in government. 9 Law No. 4798/12 establishing the National Intellectual Property Directorate (DINAPI). 10 Law No. 5564/16 adopting the Protocol amending the Establishing the WTO.

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2.16. Paraguay is active in discussions on topics relating to current trade developments such as electronic commerce, investment facilitation, and support for micro, small and medium-sized enterprises. In this regard, it has co-sponsored a number of documents and concept notes on these issues.

2.17. Paraguay also believes that the dispute settlement system and the in particular, should remain in continuous operation. This is the only way to ensure proper application of the agreements.

MERCOSUR

2.18. Another significant feature of Paraguay's trade policy is its membership of MERCOSUR, of which it is a founder member and which constitutes one of the mainstays of its foreign policy, its main regional integration objective, and its platform for the negotiation of regional agreements. Paraguay has embarked on a process of deeper integration into MERCOSUR and focuses on achieving the objectives set out in the Treaty of Asunción.

2.19. MERCOSUR remains important as a destination and origin of exports and imports and is Paraguay's chief trading partner. Between 2014 and 2016 the share of exports to the bloc rose from 39.35% to 48.09% of Paraguay's total, while the share of imports fluctuated between 40.05% and 43.14%.

2.20. Paraguay uses the MERCOSUR common external tariff (CET), which constitutes the base applied to imports from outside the MERCOSUR area save for case-by-case exceptions authorized by the bloc. These exceptions allow Paraguay to apply tariffs that are lower than the CET to imports originating outside the area, thus maintaining the profile of an economy that is open to the rest of the world.

2.21. It should be noted that, as a member of MERCOSUR, Paraguay jointly negotiates trade agreements at both intra- and extra-regional levels, including with developed and emerging economies.

2.22. MERCOSUR and the Pacific Alliance have a mechanism for dialogue under which they explore areas of common interest in relation to regional economic integration. Work streams have been identified in trade facilitation, customs cooperation, trade promotion, support for SMEs, and possible regional value chains.

Questions raised by Members

2.23. Before concluding, I would like to address the questions raised by Members for this review, which concerned a variety of issues. We welcome the Membership's interest in Paraguay and above all our trading partners' expectations of our performance.

2.24. In this connection, I would like to make the following points:

a. The creation of the National Intellectual Property Directorate (DINAPI) gave rise to a number of legislative developments that led to greater and more efficient regulation of patents, copyright and related rights and trademarks. Protection was enhanced under the National Intellectual Property Plan Paraguay 2030, which serves as a roadmap to strengthen the intellectual property system and make it more effective as a smart tool for combating poverty and fostering the country's economic, social and cultural development. The Plan also has the overarching objective of consolidating the intellectual property system – intellectual property being a generator of value – as a component of the production sector, science, the arts and technology, thus building awareness of an image associated with respect for intellectual property rights. We do nonetheless acknowledge that there is still a long way to go.

b. Paraguay has bound 100% of its tariff lines (all ad valorem) in the WTO; tariffs are applied according to the most-favoured-nation (MFN) principle, and MFN treatment is granted to imports. Work is under way to streamline import, export and marketing procedures, pursuant to the commitments made under the Trade Facilitation Agreement.

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In this connection, I would like to emphasize that the National Trade Facilitation Committee met for the first time last week. It will operate as a public-private forum aimed at implementing measures to help facilitate trade operations, reduce costs, increase the country's competitiveness and serve as a space where private-sector concerns relating to foreign trade, and transit procedures in particular, can be addressed.

c. Paraguay's current investment regimes aim to foster innovation and , with a focus on successful inclusion and social participation, which will also make economic operators more competitive, thus enabling them to access international markets and, chiefly, to become integrated in regional and global value chains.

Conclusions

2.25. We are convinced that the measures I have just described have put us on the right path to making our economy more competitive and turning international trade into a catalyst for inclusive development in Paraguay.

2.26. Paraguay hopes that these reforms, along with other changes yet to be implemented, will help to promote structural change in its economy by expanding production, broadening the range of exports, generating greater value added for our products, and integrating Paraguayan businesses into regional and global value chains.

2.27. Accordingly, the National Government's priority is to continue to increase public investment and enhance the business climate to create conditions conducive to innovation and entrepreneurship within a market economy framework.

2.28. The policy instruments used by Paraguay are designed to generate trade flows governed by transparent, non-discriminatory rules. Paraguay therefore reaffirms its commitment to the multilateral trading system and its active participation in the negotiations conducted at the WTO.

2.29. We know that we still have important challenges to address. The international economic system has to lay the foundations for development, particularly in this Organization, where progress needs to be made towards real reform of the world trading system, especially in agriculture.

2.30. Paraguay will continue to move towards deeper regional integration through MERCOSUR and will seek to expand its trade relations with third countries in order to increase its access to new markets and pursue its objective of being an economy open to the outside world.

2.31. I would like to conclude by reiterating our thanks to WTO Members for their interest and valuable participation in this fourth review of Paraguay's trade policies. My delegation will be happy to respond to each of your comments or questions. Thank you.

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3 STATEMENT BY THE DISCUSSANT

3.1. Before I begin, and I believe all of you will agree, I would like say that our thoughts are with Mexico after yesterday's horrendous earthquake, the second to hit the country in three weeks, and to express all our solidarity in the face of this renewed tragedy.

3.2. I welcome my Paraguayan friends and am very pleased that they have come to Geneva. I have said this to them in Guaraní, which is one Paraguay's two official languages.

3.3. It is an honor for me to serve as discussant in this fourth review of Paraguay's trade policies. I thank the Secretariat, the Chairman of the Trade Policy Review Body and the Permanent Mission of Paraguay for suggesting that I assume this task, which allows me to deepen my knowledge of the country's development process while at the same time endeavoring to contribute to the analysis of its performance by highlighting aspects that are relevant today and for the future.

3.4. I am happy to note that "Building the future today" is precisely the motto chosen for its official website.

3.5. My analysis will focus on three main areas: institutional and socio-economic environment; trade policy and commitment to the multilateral trading system; and conclusions and recommendations.

3.6. I shall base my analysis on the comprehensive reports of the WTO Secretariat and the Government of Paraguay, highlighting the features that stood out for me in forming an opinion to share with you all, in my personal capacity.

3.7. More information – which I will not repeat here – can be gleaned from a full reading of these reports. I have also taken into account a few indicators from relevant sources within the international system and recognized think tanks.

3.8. I would like to begin by emphasizing some interesting background features about Paraguay, which will be useful in appreciating its current situation and potential for development.

3.9. Paraguay is the eighth largest country in , larger than Japan, , Finland or , to quote but a few examples. It lies at the heart of the continent, midway between the Atlantic and Pacific oceans. Its outlet to the Atlantic is via the Paraguay and Paraná rivers.

3.10. In round figures, the country has a population of seven million, 60% of whom live in urban areas – as is the trend worldwide – and its capital, Asunción, is one of Latin America's larger cities, with close to two million inhabitants.

3.11. This is a major public policy challenge for Paraguay, since it has to address the needs of a very big city in terms of infrastructure, food, transport, community services, public security and supplies.

3.12. According to the , Paraguay is a multicultural and bilingual country, Spanish and Guaraní being the two equally official languages. Guaraní is spoken by 90% of the population, and 73% speak both official languages. Guaraní is also an official language within MERCOSUR.

3.13. This is an advantage, because, as we all know, language is not only a way of speaking but also a way of knowing and understanding the world and communicating ideas, values and interests. It is therefore important to recall that Guaraní has been kept alive in Paraguay through the centuries, so that today almost everyone uses it alongside Spanish in everyday life. In my opinion, this reality reflects a feature specific to Paraguayans, a form of dual awareness that explains many events in the country's history and political evolution, marked by dramatic events and the defense of its identity at all costs, of which perhaps the most telling example was the war in the 19th century, which decimated 50% of the country's inhabitants and 80% of its male population. Paraguay was nonetheless able to recover and gradually resume the path to development halted by the conflict.

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3.14. Paraguay is a biodiversity- and environmentally-rich country, which represents a development opportunity that should be used to advantage through appropriate public policies. In addition to rivers, Paraguay also has wetlands and lakes. It is party to the RAMSAR Convention and has listed six wetlands, extending over close to 800,000 hectares, as RAMSAR sites.

3.15. It also has the Guaraní Aquifer, a subterranean reservoir and the third largest reserve of freshwater in the world, located beneath the surface of Paraguay, Argentina, Brazil and , which supplies some 200 localities and is protected by an agreement with the other MERCOSUR countries.

3.16. However, Paraguay's entire environmental potential, which is of ever-increasing present and future economic importance, is under threat, and one of the conclusions that may be drawn is that an even more aggressive and vigilant institutional stance is needed. It is estimated that Paraguay has lost almost 90% of its original forest coverage as a result of the expansion of livestock and crop activities.

3.17. At the end of this statement, I will highlight some other aspects which seem to me to be relevant in looking ahead to the future.

Institutional and socio-economic environment

3.18. Paraguay has experienced macroeconomic stability in recent years; a major effort has been made to modernize the State, accompanied by an aggressive policy of openness and international integration aimed at creating a favorable investment climate.

3.19. Significant strides have been made in combating legal insecurity and corruption by implementing transparency laws, adopting prudent fiscal policies and investing in the infrastructure necessary to boost growth and lower logistics costs.

3.20. The Government's commitment to and achievements made on the path of modernization of the country must be acknowledged, and the aforementioned aspects are critical to this task.

3.21. Paraguay's sound macroeconomic management over the review period is, in my view, worthy of note. The reports indicate that macroeconomic stability continued to underpin growth, which is one of the highest in the region and worldwide. Inflation was held down by an inflation-targeting scheme implemented by the Central Bank, thus making it easier to access international financing at a moderate cost.

3.22. Turning to fiscal policy, I should mention the Law on fiscal responsibility, which limits the central government deficit and primary current expenditure for the public sector; this enabled the Central Government to post an operating surplus during 2011-2016.

3.23. The balance-of-payments current account was also in surplus throughout the review period, with the exception of 2012 and 2015.

3.24. As we all know, services is the most dynamic and fastest growing sector the world over, so it is interesting to note that the increase in foreign direct investment was targeted at this sector in particular.

3.25. Another noteworthy point is the new legislation enacted by Paraguay in the following trade-related areas: investment, transparency, e-commerce, public-private partnership, value added tax, the maquila regime, protection of competition, government procurement and mining. Regarding the mining sector it is also important to note, for its immediate future, the discovery of large uranium deposits and of what may be the world's largest titanium deposit, in addition to gold, nickel, cobalt and chromium.

3.26. As regards e-commerce, which has a strong impact on economic integration and foreign trade, especially for MSMEs, Paraguay has adopted a number of measures to regulate and promote trade by electronic means under the Law on electronic commerce and the Law on digital signature.

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3.27. Paraguay has an open foreign direct investment regime, having enacted three new laws: (a) the Law on public-private partnership, (b) the Investment Protection Law, and (c) the Law on public works involving financing or turnkey contracts.

3.28. Along similar lines, in 2017 the MERCOSUR countries signed a Protocol on intra-MERCOSUR cooperation and investment facilitation.

3.29. Paraguay is a founding member of MERCOSUR, which accounts for 35% of its foreign trade. Brazil is Paraguay's leading market (21%), followed by . The high concentration of exports in just a few markets and products is one of the problems to be overcome by means of long-term economic policies providing for incentives to diversify through value-added commodities and services.

3.30. Institutional development and economic performance have an impact on social development.

3.31. A point worthy of note is that social investment has accounted for close to 57% of total central government expenditure in 2017, ensuring financing of the country's key social programmes, most of which have seen an increase in coverage; these include the old-age pension scheme, which reportedly numbers 190,000 beneficiaries, and the Tekoporã conditional cash transfer programme, which is understood to be available to 150,000 families.

3.32. Paraguay has invested a great deal in education over the past 20 years, which has led to progress in terms of school enrolment, expanded secondary education coverage, and the introduction of compensatory programmes. According to the United Nations Development Programme's 2016, the average number of years of schooling in Paraguay is 8.15 years, meaning that the country is still below regional average. According to the Center for Economic Analysis and Dissemination in Paraguay (CADEP), expenditure remains insufficient to achieve all the education policy targets, and progress in quantitative terms should be matched by better educational quality. All of our countries are concerned by this issue of having achieved wide coverage whilst still needing to improve the education provided.

3.33. The 2016 Human Development Index (HDI) placed Paraguay in the medium human development group, ranking it fourth within the group. We hope that in the coming years the benefits of the reforms implemented or under way will bring Paraguay closer to achieving high human development ranking.

3.34. As is the case of many other countries in the region, Paraguay is faced overall with the problem of inequality. This means that it is five places lower when its HDI ranking is adjusted for inequality. On the other hand, it should be pointed out that the country has moved up four places in the gender inequality index, which emphasizes women's empowerment.

Trade policy and multilateral commitment

3.35. In addition to the points made in the Secretariat and Government reports, the enactment of the Law on the protection of competition and its implementing Regulations is, in our view, one of the most noteworthy advances of the review period, bringing the country closer to international standards in this area.

3.36. It should also be mentioned that the period under review saw the adoption of various regulations to increase the efficiency and transparency of government procurement procedures.

3.37. As regards intellectual property, a subject very closely related to innovation and capacity-building to add value to products, Paraguay has introduced several reforms since the previous review. Both reports highlight legislative changes aimed at more effective regulation in a number of areas.

3.38. Another major development was the creation in 2012 of the National Intellectual Property Directorate, which is responsible for implementing national policy on intellectual property and for enforcing the rules protecting intellectual property rights.

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3.39. The institutional framework for intellectual property was strongly reinforced by the Paraguay 2030 National Intellectual Property Plan, adopted in May 2017, which aims to strengthen the intellectual property system in order to make it more effective and foster the country's economic, social and cultural development.

3.40. These intellectual property developments are undoubtedly a step in the right direction.

3.41. It is important that protection of products of the human intellect should serve as a basis for encouraging innovation. Innovation is an essential component of the 21st century economy, and its level of development depends on a number of factors. We can see that the Global Innovation Index has given Paraguay fairly similar rankings, although its place in the overall ranking has varied according to its position in relation to the other countries surveyed. It is currently placed in the middle range among countries of the Latin American and Caribbean region.

3.42. As regards its commitment to the multilateral trading system, Paraguay is a staunch supporter of the system and contributes through its active participation in the WTO agriculture negotiations, particularly those concerning market access. With a view to the Buenos Aires Ministerial Conference, Paraguay has put forward and driven the following two proposals: (i) establishment of a work programme for further liberalization of agricultural market access; and (ii) elimination of the special agricultural safeguard (SSG) from the .

3.43. In the WTO, Paraguay is an active member of the Cairns Group, the G-20 and the Friends of MSMEs. Most notably, it coordinated the Group of Landlocked Developing Countries during the negotiation of the Trade Facilitation Agreement, and it upholds the interests of the Group in this Organization.

3.44. Another point is that Paraguay is seeking to make progress in notifying the WTO of the sanitary and phytosanitary measures it adopts. It should be emphasized that draft measures were notified during the period under review, because the previous review had shown that the vast majority of measures were being notified after their adoption.

3.45. Only five measures were notified during the review period: four pertaining to plant health and one to animal health, of which two were notifications of emergency measures and three regular measures.

A few conclusions and recommendations

3.46. The Paraguayan economy is growing, and there are grounds for optimism that this trend will continue despite the uncertainties of the global environment. This will be possible to the extent that Paraguay continues to strengthen its institutions, enhance its business environment with legal certainty and predictability, and adjusts productivity and the competitiveness of its production system to the new parameters of the world economy, which is strongly focused on knowledge and modern technologies.

3.47. There is potential to be highlighted beyond the opportunities already mentioned.

3.48. Paraguay is the leading exporter of electricity on the American continent, which is a critical factor in the medium and long term as the world prepares to shift its energy matrix from fossil fuels to clean energy sources.

3.49. It is the world's second largest exporter of stevia, fourth largest exporter of soya beans and fifth largest exporter of beef.

3.50. As regards non-core services, the trade and financial sectors are the most relevant, with an estimated contribution of 28% between the two.

3.51. In the telecommunications sector, the density levels for fixed telephony and fixed broadband access are still among the lowest in Latin America but the level of mobile telephony penetration is high. We believe that if the National Telecommunications Plan 2016-2020 meets its targets, progress can be made in terms of connectivity, digital inclusion and regulatory efficiency.

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3.52. Paraguay's population is among the youngest in the world, with a high fertility rate of 3.6 children per woman. Its population structure shows that four out of every ten people are under 15 years of age, and those between the ages of 15 and 29 account for one fourth of the total population. This represents considerable potential for boosting and ensuring the sustainability of the economy, which in turn has an impact on the sustainability of social welfare and pension systems – a critical issue for several countries of the region and in the developed world.

3.53. The World Economic Forum's Inclusive Growth and Development Report 2017 shows Paraguay as one of the top ten performers among the developing countries in terms of the most improved five-year trend, and Paraguay ranks 19th among the developing countries in the Inclusive Development Index, where it is classified as "Advancing".

3.54. I would also highlight as a very positive development the fact that the Paraguay 2030 Development Plan is 80% in line with the United Nations Sustainable Development Goals, national economic policy being geared to consolidating the pace of inclusive economic growth based on diversification of production and the active involvement of all sectors of society.

3.55. Lastly, I will point out some of the aspects that call for improvement if Paraguay is to take advantage of its huge potential and keep up the pace of the reforms undertaken, which are yielding good results. There are factors that directly impact on growth and stability.

3.56. As regards competitiveness, innovation, business dynamism and financial market development, Paraguay still lags behind according to the World Economic Forum's comparative international indicators.

3.57. The same goes for economic freedom according to the Heritage Foundation and the 's Ease of Doing Business ranking.

3.58. Transparency International's Corruption Perceptions Index 2016 does not yet reflect the impact of the legislative developments highlighted in this statement.

3.59. On the other hand, it is encouraging to note that in terms of ease of doing business Paraguay improved its ranking as regards the use and introduction of electronic processing of export documents, protection of small investors, cross-border trade, and observance and performance of contracts. Its rating nonetheless worsened as regards access to electricity, access to credit and tax collection.

3.60. Paraguay has a relatively good – albeit insufficient – ranking in terms of its macroeconomic environment (60/138) and financial market development (72/138). According to the latest information from the Getulio Vargas Foundation, the country takes first place in the region as regards its business climate.

3.61. Paraguay became a signatory to the United Nations Convention against Corruption in June 2005. According to the World Bank, Paraguay's investment climate will benefit from greater transparency and less administrative discretion. I therefore lay renewed emphasis on the Law on access to public information of 2014 and the anti-corruption whistleblowing portal. Paraguay's acceptance as a member of the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes is also noteworthy.

3.62. As we said before and to conclude this statement, bringing the institutional framework and the economy into line with the new global environment, since all of us are already entering the fourth industrial revolution, are essential from a forward-looking perspective. In this respect, I would like to mention that the latest Global Innovation Index, which focuses on agriculture and food systems, shows Paraguay, with its 63.4% of agricultural exports, in the group of countries' with poor innovation capacity for both conventional and modern biotechnology.

3.63. We see scope for qualitative growth there, because beyond the overall score, where attention must continue to be paid to the institutional pillar, business sophistication and labour market efficiency, the development of the Paraguayan market stands out favourably as regards access to credit and creative output.

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3.64. In other words, Paraguay is a society geared towards creation, which would suggest that with continued institutional improvement and private-sector commitment to achieve greater business sophistication, a great deal could be achieved for Paraguay's innovative future and hence its sustainable development. Thank you.

CHAIRPERSON

3.65. Thank you, Ambassador Casanueva, for your comprehensive analysis. It goes without saying that I join the other speakers in expressing condolences to and solidarity with Mexico and the Caribbean islands in the aftermath of the hurricanes that struck in recent weeks and again this past week.

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4 STATEMENTS BY MEMBERS

COLOMBIA

4.1. We too would like to join other speakers in expressing words of solidarity, condolence and sympathy in the aftermath of what happened in Mexico and Dominica, and to extend wholehearted wishes to Puerto Rico for the welfare of its people.

4.2. Colombia and Paraguay enjoy extensive relations and are linked by strong bonds of friendship rooted in our common history. Suffice it to recall the decree issued by the Colombian Congress on 27 July 1870 when Paraguay's sovereignty was threatened by war: "If, as a result of the war, Paraguay were to disappear as a nation, no Paraguayan will be a pariah in America; should this occur, merely by stepping onto Colombian soil Paraguayans will automatically enjoy the privileges, powers, prerogatives and rights accorded to Colombians. In other words, should they lose Paraguayan nationality, they will automatically become Colombian citizens".

4.3. As regards the substance of this review, the Paraguayan economy has experienced dynamic and stable growth thanks to prudent fiscal policy management and improved management of taxation. In the macroeconomic sphere, the Government's endeavours have borne results, which are reflected in some of the country's economic indicators, such as: average annual growth of 4.6%, an unemployment rate of around 5%, controlled inflation, and a balance-of-payments current account in surplus almost every year.

4.4. Paraguay has also implemented a number of ambitious reforms to promote economic diversification and attract investment, by passing new laws to enhance the investment climate, such as the Law on public-private partnership, the Investment Protection Law and the Law on financed public works. As regards electronic commerce, it has adopted a range of measures to regulate and foster e-commerce, such as the Law on digital signature and the Law on electronic commerce. With respect to trade facilitation, having ratified the FTA in March 2016 Paraguay has introduced improvements in customs procedures and controls, thus making trade transactions easier and reinforcing revenue-collection capacity. We are confident that these reforms will increase ease of doing business in Paraguay as well as the country's competitiveness, and will be reflected in indices such as the World Bank's Doing Business Index, in which Paraguay most recently ranked 106th, pointing to the need to pursue and intensify these efforts.

4.5. In the trade sphere, Paraguay has an active MERCOSUR agenda, with more than 15 agreements with various countries of the region and worldwide. It also benefits from the Generalized System of Preferences. Its key trading partners are MERCOSUR members, accounting for around 40% of its imports and exports. Its bilateral trade relations with Colombia are governed by the CAN-MERCOSUR Agreement. Bilateral trade amounted to US$22 million worth of goods exports from Colombia and US$25 million worth of imports from Paraguay, involving the following products in particular: medicines, insecticides and agro-chemicals, hair preparations, and petroleum oils. Even so, there is considerable scope for expanding trade in products such as specialty coffees, cocoa products, animal feed, household goods, and cosmetics.

4.6. At the multilateral level, we welcome Paraguay's active contribution towards improving the operation of the multilateral trading system. Our positions are close on a number of issues and on aspects of the agriculture negotiations, as both of us belong to the Cairns Group.

4.7. As regards foreign direct investment, Colombia was Paraguay's 11th largest investor in terms of FDI stock up to 2015, with a little over US$92 million. There are clearly opportunities for increasing bilateral investment in sectors such as engineering and construction services and civil works; electricity and telecommunications infrastructure; agriculture with high potential for the processing of plant and animal protein; and waterway logistics.

4.8. Four memorandums of understanding were signed on the occasion of the Colombian President's visit to Paraguay in April of this year. One point of emphasis is the promotion of production integration between the two countries as a driver of strategies to develop a closer trade partnership between their industries and thus boost regional and global value chains.

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4.9. To conclude, we thank Paraguay for responding to the questions that we submitted for this review and wish its delegation every success in this fourth trade policy review. We congratulate Ambassador Aguirre and his team at the Permanent Mission in Geneva for their excellent work.

MEXICO

4.10. Before I begin I would like to express, on my delegation's behalf, our heartfelt thanks to Ambassador Casanueva, to you, Mr Chairman, and to other colleagues for their expressions of solidarity and support for our country.

4.11. Paraguay has shown ample proof of its work for and commitment to this Organization in engaging constructively in the negotiation of the Trade Facilitation Agreement and the agriculture negotiations, as well as assuming the chairmanship of the Committees on Trade and Development and on Sanitary and Phytosanitary Measures, and serving as Vice-Chair of the Committees on Market Access and Import Licensing.

4.12. As fellow countries, Mexico and Paraguay share common features and a deep commitment to maintaining a strong trading partnership, as evidenced by the signing of nine bilateral cooperation instruments during President Horacio Cartes' latest visit to Mexico in 2016.

4.13. Real GDP experienced a high growth rate of 4.7% between 2011 and 2016, despite a drought in 2012 when it shrunk by 1.2% before soaring to an impressive 14% in 2013.

4.14. This was achieved in part by increased domestic consumption and public spending and the implementation of some countercyclical fiscal policies. Nonetheless, the country's economic stability and growth outlook are still threatened by the informality that continues to deprive the Government of tax revenue and by poor road infrastructure, given that less than 10% of the national road network is sealed.

4.15. Although the total central government debt-to-GDP ratio is relatively low, the speed at which it is rising could represent a problem in the future, having doubled from 11% in 2011 to 23% in 2016.

4.16. Paraguay has become one of the leading exporters of hydroelectric power and is the world's sixth largest exporter of soya beans. On the other hand, in 2016 more than two thirds of its exports consisted of plant, food and mineral products, making the country particularly vulnerable to a decline in international commodity prices.

4.17. My delegation has some concerns pertaining to market access:

i. As regards tariffs, in its replies Paraguay explained to us that for the 80 lines on which the applied rate exceeds the bound rate, the latter applies. However, we are concerned about the confusion that this may cause for business operators.

ii. Paraguay has a complex tax system, in that imports are subject to various charges other than tariffs, including:

o a consular fee for endorsing documents that varies depending on the means of transport and the type of operation involved; o a tax amounting to 7% of the consular fee to finance the Paraguayan Indigenous Institute; o a valuation tax for the supply of customs services; o a tax for the use of the customs computer system; and o variable taxes on imports entering by air.

iii. We also note the introduction of new import licenses for products such as footwear, salt, cement and mobile telephones.

4.18. As regards trade facilitation, however, Paraguay made improvements that include the following:

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i. the adoption of a computerized risk management system; ii. the implementation of an authorized economic operator programme; and iii. the digitalization of customs documents.

4.19. We congratulate Paraguay for implementing important legislative reforms such as the following, which will contribute to its institutional consolidation efforts:

i. Law on electronic commerce; ii. Law on micro, small and medium-sized enterprises; iii. Law on the protection of competition, and the establishment of the National Competition Commission.

4.20. Regarding services, we would emphasize significant achievements such as the following:

i. attraction of foreign direct investment into the tourism sector, where FDI in restaurants and hotels has almost tripled; ii. in telecommunications, mobile telephony penetration is high, with 105 subscribers per 100 inhabitants; iii. Paraguay has the largest river fleet in the region and ranks third at world level; and iv. the country's macroeconomic stability has contributed to a doubling of bank deposits and loans over the review period.

4.21. Nonetheless, we believe that an important means of bolstering these efforts would be for Paraguay to expand its commitments in services, which are limited to the financial and tourism sectors.

4.22. I close by thanking Paraguay for its replies to my delegation's questions and wish it every success in this review.

CANADA

4.23. I would like to begin by commending Paraguay on its macroeconomic stability, sound monetary policies and impressive commitment to international trade, which have contributed to the steady performance of Paraguay's economy in recent years.

4.24. During the period of review, Paraguay demonstrated its commitment to international trade and the multilateral trading system as an active member of the WTO and by implementing reforms domestically to make trade procedures more efficient and transparent. For example, Paraguay demonstrated leadership as coordinator of the Group of Landlocked Countries during the negotiations of the Trade Facilitation Agreement and ratified that agreement in early 2016. Paraguay is also a valuable member of the Cairns Group, seeking to further liberalize trade in agricultural products. Domestically, we commend Paraguay on implementing new legislation to improve the investment climate, which will help in attracting foreign direct investment, especially in the natural resources sector.

4.25. As Canada's Minister of International Trade has stated many times, "we believe that our shared prosperity lies in openness and the pursuit of freer trade between nations". Paraguay has actively pursued global and regional integration and played an active and constructive role in the work of the WTO. We commend Paraguay's strong commitment to trade integration and support for the international trading system. Through its Mercosur membership, Paraguay is engaged in ongoing dialogue to deepen the Canada-Mercosur trade and investment relationship.

4.26. More broadly, Canada recognizes Paraguay's efforts to strengthen its public finances, to apply prudent fiscal and sound monetary policies, to reduce the level and volatility of inflation. We also commend Paraguay on its National Development Plan 2014-2030, which encompasses three important objectives: poverty reduction and social development, inclusive economic growth, and integration into the world. These interlinked objectives positively represent our shared belief that trade can foster development and open markets can lead to inclusive economic prosperity.

4.27. Canada is committed to gender equality and women's economic empowerment and strongly believes that women entrepreneurs in developing countries are creating jobs and helping build

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4.28. Despite these great improvements, I would like to raise three areas of concern where Canada would like to see further progress.

4.29. First, we would like to draw attention to the overall ease of doing business and the enforcement of the rule of law in Paraguay. Canadian businesses find Paraguay's regulatory requirements complex and government approval processes excessively long. Despite the Government's efforts to improve the business environment, the World Bank's 2017 Doing Business report ranks Paraguay 106th among 190 countries. Canada encourages Paraguay to simplify and accelerate regulatory requirements, particularly in sectors where Paraguay is keen to attract investment. Additionally, Paraguay's rank of 123rd out of 176 countries in Transparency International's Corruption Perceptions Index underscores the need to reinforce policy measures to combat corruption.

4.30. Second, labour informality - accounting for up to 40% of GDP according to some estimates – should be addressed. Despite recent reforms introducing personal and new agricultural taxes, Paraguay's large informal economy continues to be a drag on fiscal consolidation. We encourage Paraguay to continue with measures towards greater formalization of employment.

4.31. Third, we would encourage Paraguay to continue implementing measures to diversify its economy. Paraguay's exports are still dependent on a small number of agricultural products. Diversify exports could reduce Paraguay's vulnerability to inclement weather and commodity price shocks. As a measure to help exporters reach foreign markets, we encourage Paraguay to continue with implementation of the Trade Facilitation Agreement through the submission of remaining notifications under Section II of the Agreement without delay.

4.32. Allow me to conclude by thanking Paraguay for its responses to Canada's advance written questions in this trade policy review which our colleagues in capital will review with interest. Let me also congratulate Paraguay on its implementation of concrete measures that support open markets and strengthen international trade.

AUSTRALIA

4.33. Australia's trade and investment relationship with Paraguay is modest, largely reflecting one-off deals rather than ongoing supply arrangements. In 2016, total two-was merchandise trade totalled A$5.15 million. Australia's relationship with Paraguay through the WTO and the Cairns Group, support agricultural market access liberalization and commitment to a rules-based multilateral trading system.

4.34. We commend Paraguay for its process of reform leading to strong and sustained growth. These reforms are encouraging, particularly for international investors in Paraguay's resource, agricultural and service sectors.

4.35. It is clear that Paraguay has a commitment to trade liberalization and has made efforts to open its economy and increase transparency and competitiveness. Paraguay, like Australia, is a vocal advocate for free trade and an active participant in the multilateral trading system demonstrated by acceptance of the Trade Facilitation Agreement. We want to work closely with Paraguay to support an open international trading system and look forward to strengthening our relationship with Mercosur.

4.36. We note that Paraguay's import and export markets remain highly concentrated, and also note the importance of access to international markets for Paraguay as a landlocked developing country. We are encouraged by the ambitions of Paraguay's National Development Plan 2030. Australia welcomes Paraguay's advances in diversifying its economy.

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4.37. Australia has submitted several written questions as part of this review and we thank Paraguay for its responses. We wish Paraguay well in its Trade Policy Review.

BRAZIL

4.38. Paraguay's economy has performed robustly over the last years, despite the global economic downturn. Supported by sound fiscal and monetary policies and an overall openness to trade, the country maintained positive rates of growth and low levels of unemployment during the international crisis.

4.39. We note as well that trade has contributed to the strong performance of the economy. Exports of agriculture goods, mainly meat, and cereals, continue to play a significant role in supporting economic activity and maintaining the country's current account surpluses.

4.40. Recent measures aiming at improving the business environment and attract investments are also worth mentioning. The Law on public-private partnership, the Investment Protection Law, and the Law on public works – all of them approved in the period under review – add to the existing rules and provide new opportunities for foreign direct investment.

4.41. Still on the regulatory area, Brazil welcomes the efforts taken to streamline customs procedures, including the recent actions in the implementation of the single window for imports. Nevertheless, our exporters remain concerned with the time required to process all import documents and the impact of consular fees on the costs of their exports.

4.42. With regard to multilateral obligations, we encourage Paraguay to continue to attach priority to further steps to enhance transparency. The Secretariat points out to outstanding notifications in areas such as domestic support in agriculture, import licensing procedures, customs valuation, subsidies, and state trading enterprises.

4.43. Brazil and Paraguay are united by strong friendship ties and shared values. More than 300 thousand Brazilians live and work in Paraguay. Together, we built one of the largest hydro power plants in the world. Part of the electricity produced by Itaipu is exported to Brazil, generating income for Paraguay in the form of compensation payments and royalties.

4.44. Brazil remains the main destination for Paraguayan exports and is the second largest investor in the country. Brazilian exports to Paraguay have increased 26.6% in the first semester of this year compared to the first semester of 2016, reaching US$1.4 billion. Imports from Paraguay reached US$688 million, a 5.7% increase in the same period. We trust that the ongoing economic recovery in Brazil will open new opportunities for exports from Paraguay.

4.45. Sustained economic growth in Paraguay has attracted Brazilian investments. In the last three years, more than 80 Brazilian companies have started operations in our neighbor, with total investments of around US$200 million.

4.46. During the visit of President Horacio Cartes to Brazil last month, we took additional steps to deepen our economic and trade relationship. We are currently negotiating an agreement for the automotive sector with the objective of further integrating our production systems and expanding our trade flows. Both presidents have also expressed their interest in the negotiation of a bilateral agreement to avoid double taxation.

4.47. Our positive bilateral partnership extends to the region. As founding members of MERCOSUR, we are committed to pursue an effective regional economic integration, which will bring tangible benefits to our citizens. We are working to eliminate remaining trade barriers and to conclude an agreement on government procurement.

4.48. Let me conclude by thanking the Paraguayan delegation for the replies to Brazil's questions, which were forwarded to capital for examination and follow-up. We wish Paraguay a most successful Trade Policy Review.

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UNITED STATES

4.49. We would just like to take a moment as we are focused on one of our neighbors in the Americas region to note our distress and sympathy for those in other parts of our region, notably Mexico and Dominica who are experiencing such severe human suffering as a result of natural disasters.

4.50. Paraguay is one of the fastest growing economies in Latin America. Over the past decade, Paraguay's GDP annual growth averaged 4.9%, and a remarkable 5.9% from 2009 to 2016, attributable largely to growth in agricultural commodity exports. Along with agriculture, the retail and construction sectors are the main drivers of Paraguay's economic growth. Paraguay is among the top ten global exporters of soy, beef, organic , and stevia, a natural sugar substitute. This is quite remarkable for an economy of Paraguay's size.

4.51. Paraguay also offers an increasingly attractive environment for foreign investment. Paraguay has low-cost electricity, low labor costs, less onerous labor rules, and very low taxes. During the past few years, more than one hundred companies have recognized the advantages of investing in Paraguay and have established factories there which have led to increased employment and substantial growth in the manufacturing sector, notably , pharmaceuticals, and auto parts. More than a dozen U.S. multinational firms have subsidiaries in Paraguay, including firms in the computer, agro-industrial, telecommunications, banking, and other services industries. Some 75 U.S. businesses have agents or representatives in Paraguay, and more than 6,000 U.S. citizens reside in Paraguay.

4.52. Bilateral trade in goods between the United States and Paraguay more than doubled over the past decade, reaching a total of US$2.1 billion in 2016. Our bilateral trade in agricultural products increased more than fourfold during the same period. While the United States had a US$1.8 billion goods trade surplus with Paraguay in 2016, Paraguay enjoyed a surplus of nearly US$65 million in agricultural trade with the United States in 2016.

4.53. Since Paraguay's last TPR in 2011, our two Governments have continued to deepen our bilateral engagement. In June 2015, the United States and Paraguay concluded the renegotiation of a Memorandum of Understanding on Intellectual Property Rights intended to improve the protection and enforcement of intellectual property rights in Paraguay. Paraguay was subsequently removed from the Office of the U.S. Trade Representative's Special 301 Watch List in recognition of Paraguay's efforts and commitment. In January 2017, the United States and Paraguay signed a Trade and Investment Framework Agreement (TIFA), intended to create a for strengthening U.S.-Paraguayan trade and investment relations and promoting increased economic opportunities for both countries. The TIFA is awaiting ratification by Paraguay's Congress. Once ratified and in force, the United States looks forward to engaging with Paraguay through this new bilateral mechanism.

4.54. I would like to take this opportunity to commend Paraguay for its support of and commitment to the successful conclusion, ratification, and entry into force of the WTO Agreement on Trade Facilitation (TFA). As a , Paraguay has always recognized the importance of the TFA. We appreciate Paraguay's notification of its Category A commitments and we look forward to Paraguay's Category B and C notifications. We also look forward to continued collaboration with Paraguay in the Trade Facilitation Committee.

4.55. Paraguay is generally open to trade, with limited non-tariff barriers. However, there are some issues of concern to the United States. For example, Paraguay does not allow imports of U.S. beef, pending the conclusion of a review of the U.S. food safety system by Paraguayan regulatory authorities. The status of this review remains unclear, despite requests from the United States over several years for Paraguay to conclude the regulatory review and open its market to U.S. beef products. Paraguay requires non-automatic import licenses on a range of goods such as personal hygiene products, cosmetics, perfumes and toiletries, textiles and clothing, shoes, insecticides, agrochemicals, soy grains, barbed wire, wire rods, and steel and iron bars.

4.56. Although Paraguay has taken important steps to improve the enforcement and protection of intellectual property rights, more work is needed. The United States continues to have concerns about widespread piracy and counterfeiting in Paraguay, particularly in the tri-border region with

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Brazil and Argentina. In addition, there are concerns about judicial inefficiency in IPR cases; lack of protection against unfair commercial use and unauthorized disclosure of undisclosed test results or other data submitted to the Paraguayan government by U.S. agrochemical and pharmaceutical companies; the use of unlicensed software by the government; and the theft of pay-tv signals and related trafficking of satellite signal decoder devises. An improved environment for the protection and enforcement of intellectual property rights is in Paraguay's own interest because it will lead to an improved environment for foreign investment and innovation, which in turn will spur economic growth.

4.57. In conclusion, the United States appreciates this opportunity to engage in an open discussion of Paraguay's trade regime. We look forward to further cooperation with our Paraguayan colleagues, both here at the WTO and in the context of our bilateral dialogue. We thank Paraguay for its responses to our questions and we look forward to reviewing the government's answers to our questions and to those of other Members.

EUROPEAN UNION

4.58. On behalf of the European Union, I would first like to express my sympathy and support for the dire moments experienced by people in Mexico and the Caribbean region.

4.59. I would like to welcome Paraguay's delegation, and especially pay tribute to Ambassador Juan Esteban Aguirre Martinez who has been leading the Mission of Paraguay with insight and sense of humor.

4.60. The EU would like to start by highlighting some of the positive issues that have emerged during the period under review.

4.61. First, we congratulate Paraguay's strong economic performance since its last TPR in 2011. Macroeconomic stability and sound public finances supported growth and held down inflation expectations. Paraguay was one of the fastest growing countries in Latin America. Paraguay is a landlocked country and trade is an essential component of its economy: it accounted for over 83% of GDP in 2016. It is noteworthy that services are the main contributors to the economy by some 44% of GDP and employing some 60% of the .

4.62. Second, we commend the launch in 2014 of the Paraguay's National Development Plan 2030 which sets out the Government's approach, focusing on three major strategic priorities: (i) poverty reduction and social development; (ii) inclusive economic growth; and (iii) appropriate integration into the world economy. In particular, we support efforts to fight poverty and inequalities. In this context, we also welcome Paraguay's moderate but gradual diversification in bilateral exports away from soya beans and soya by-products (from 78% in 2012 to 40% in 2016).

4.63. Third, we welcome Paraguay's progress on intellectual property rights protection and enforcement. In this context, the creation of the National Intellectual Property Directorate (DINAPI) in 2013 is a step in the right direction.

4.64. Paraguay played a constructive role in the negotiation of the Trade Facilitation Agreement; in 2016, it completed the trip by ratifying it. The EU commends Paraguay in particular for its pro-active implementation as it submitted its Category A notification already in 2014 – this is an example that we hope other Members to follow soon.

4.65. With reference to our bilateral relationship, the EU was Paraguay's fourth most important trading partner, accounting for 12% of Paraguay's total trade in 2015 and amounting for €1.65 billion.

4.66. Paraguay is a member of MERCOSUR - an important example of regional economic integration in Latin America. The EU with MERCOSUR is currently in negotiations for a bi-regional Association Agreement by which we aim at promoting regional trade and cooperation opportunities. The EU imports from Paraguay are dominated by agricultural products while EU exports to Paraguay are dominated by manufactured products, in particular machinery and transport equipment. The EU hopes that our future agreement will help in partly to rebalance this and make Paraguay an even more attractive a destination for EU's Foreign Direct Investment.

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4.67. The 1992 Framework Cooperation Agreement is the basis for bilateral cooperation between Paraguay and the EU. For the period 2014-2020, Paraguay benefits from bilateral assistance for education, private sector development, social protection and democracy/institutional strengthening worth €168 million under the Development Cooperation Instrument.

4.68. Despite all these positive developments the EU would also like to raise a few challenges, some related to the questions we have submitted earlier. We thank Paraguay for its timely replies received in advance of the meeting in accordance with the alternative timelines for this review.

4.69. First of all, even though Paraguay introduced a Law on access to public information (Law No. 5.282/14) in 2014 and set up the anti-corruption whistleblowing portal for reporting alleged acts of corruption, we would like to highlight the importance for Paraguay to pursue efforts to enhance transparency and to fight corruption.

4.70. Second, the EU is concerned about Paraguay's consular stamping requirements which is an administrative burden and causes delays for exporters to Paraguay. The EU would like to encourage the elimination of consular stamping or any kind of consular transaction.

4.71. Third, to improve the business climate, the EU reiterates the need to repeal or amend the "Representation law" (194/1993) which imposes cumbersome requirements on exporters regarding their commitments to local agents and distributors.

4.72. Fourthly, the EU encourages Paraguay to keep up its efforts to modernize its customs procedures, and in particular, to simplify import registration and to revise the current import licensing procedure.

4.73. Finally, the EU would recommend Paraguay to explore the idea of becoming a Party of the WTO Plurilateral Agreement on Government Procurement.

4.74. On behalf of the EU, I look forward to a constructive exchange of views during this review and I wish Paraguay's delegation the utmost success during its Trade Policy Review.

CHILE

4.75. We submitted nine questions for this review and appreciate the replies received.

4.76. Diplomatic relations between Chile and Paraguay date back to 1811. Our bilateral relationship is marked by a tradition of cooperation, constructive dialogue and understanding, which has led to close collaboration and considerable mutual support at bilateral, regional and multilateral levels.

4.77. Evidence of this was the first meeting of the Chile-Paraguay Binational Council of Ministers, held a year ago in Santiago and attended by almost all the Ministers of both countries.

4.78. The fifth Chile-Paraguay Round of Consultations took place last month in Santiago with a view to boosting political and economic dialogue. Various aspects relevant to bilateral trade were reviewed on that occasion.

4.79. Deeper political, economic and physical integration has further consolidated our relationship. Jointly with Argentina and Brazil, our two countries have accordingly given priority to moving forward with the Puerto Murtinho-Antofagasta (northern Chile) Bioceanic Corridor.

4.80. Connectivity between the Pacific and the Atlantic would benefit both intra-regional and regional trade. It should also facilitate customs procedures by increasing their efficiency as well as standardizing and harmonizing inspection and control mechanisms between the countries. This should translate the WTO Trade Facilitation Agreement into concrete terms. We take this opportunity to point out that Paraguay was the second South American country to ratify the Agreement, on 1 March 2016.

4.81. We also highlight Chile's concession to Paraguay in the form of a 38.6-hectare bonded warehouse and free zone in Antofagasta for goods exported and imported by Paraguay. This

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- 23 - customs facility is fully available for use. Paraguay in turn established a bonded warehouse and free zone in the port of Villeta for Chile.

4.82. These facilities are a tangible example of the advantages offered by pragmatic rapprochement between two countries. We would point out that this project comes under the objectives and priorities set by the Vienna Programme of Action for Landlocked Developing Countries, in particular for those that seek to create the logistical and regulatory conditions to ensure traffic continuity for all transit countries, as well as trade and transport facilitation, which is also provided for under multilateral and regional agreements.

4.83. Economic relations between the two countries are channeled mainly through the Joint Economic and Trade Council, which is due to hold its third meeting next October in Asunción. The key agreements reached in the Council are: to push forward with a common Pacific Alliance and MERCOSUR agenda, to join efforts in boosting bilateral trade, to organize exploratory missions to Paraguay for Chilean investors, and to build capacity in areas relating to global value chains.

4.84. Trade relations between Chile and Paraguay are governed by the Chile-MERCOSUR Economic Complementarity Agreement (ACE N°35), in force since October 1996. Under this Agreement, the entire tariff universe is now duty free, with our intense and successful bilateral relationship spanning trade, investment, air and land transport, and services.

4.85. In 2016, bilateral trade amounted to US$1,117 million. We know that international trade has contracted in recent years and that this has also had an impact on the figures for trade between Paraguay and Chile. It is in our interest to revive, restore and expand trade with Paraguay.

4.86. Chile has become a supplier of products such as motor , footwear, medicines, copper and wine, whilst Paraguay is a leading exporter of meat and food products generally to Chile.

4.87. We are working hand-in-hand with Paraguay on agricultural trade reform in the WTO; through the Cairns Group and the G-20, we intend to make the issues addressed there a priority in the Doha Round. We also share the same views in the Group of Friends of MSMEs.

4.88. From the reports submitted, we note that Paraguay improved its macroeconomic indicators over the review period, achieving stability of the economy, an increase in foreign direct investment and a current account surplus. These impressive indicators are due to the reforms implemented by the Government, with modernization of the public sector also accounting for greater efficiency and transparency.

4.89. We wish to highlight the e-commerce reforms which have contributed to modernizing and generally increasing trade. We also note the implementation of various technical regulations; in that regard, despite the lack of a centralized agency each of the authorities concerned follows procedures within its area of competence and there is good coordination between them.

4.90. We welcome Paraguay's acceptance, in June 2016, as a member of the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes.

4.91. Turning to the notification of sanitary and phytosanitary measures, we urge Paraguay to continue submitting them on time.

4.92. We nonetheless believe that there is still room for improvement, which might be made in areas such as infrastructure, streamlining of procedures, refining of investment and export incentives, and in matters involving intellectual property rights. We also believe that international public tendering could be further encouraged in specific cases.

4.93. In addition to its significant role in the regional and global economy, Paraguay shows a firm commitment to the multilateral trading system. We are therefore convinced that it will make an important contribution to the success of the next Ministerial Conference in Buenos Aires.

4.94. Lastly, we wish our trading partner a successful fourth review of its trade policies.

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DOMINICAN REPUBLIC

4.95. First of all, we would like to express our sympathy to Mexico after the recent tragedy of the two earthquakes, and to the Caribbean islands, particularly Dominica, following the disaster that struck the country yesterday.

4.96. The Dominican Republic has close bonds of friendship with Paraguay. These ties grew stronger after the opening of the Embassy of the Dominican Republic in Asunción in 2009 and the Embassy of Paraguay in Santo Domingo in 2014, which marked an important revival of relations between the two countries.

4.97. In 2016, our bilateral trade balance was in favour of Paraguay because, as the Secretariat report points out, its economy has performed robustly since the previous review in 2011. Real GDP grew at an average annual rate of 4.7% between 2011 and 2016, underpinned by a stable macroeconomic environment which not only favoured growth and held down inflation expectations, but also made it easier for Paraguay to access international financing at a moderate cost. The most vigorous economic sectors during 2011-2016 were financial services, construction, general government and the agricultural sector, which is the main source of exports. The unemployment rate remained moderate during the review period, generally fluctuating between 5% and 6%.

4.98. We are also struck by the fiscal discipline exercised by Paraguay in implementing a new law known as the Law on fiscal responsibility of 2013, which sets annual percentage caps on increases in expenditure (year-on-year inflation rate plus 4%) as well as limits on the central government deficit, which must not exceed 1.5% of GDP. This policy of fiscal consolidation has led to an improvement in tax collection and an increase in the share of tax revenue in GDP. The central government posted an operating surplus every year during the 2011-2016 period.

4.99. It should be emphasized that during the review period the balance-of-payments current account was in surplus every year with the exception of 2012 and 2015, reflecting the large surpluses on the goods trade balance recorded during the period, owing to strong soya bean and meat exports. Through most of the review period Paraguay added substantially to its stock of international reserves. At the end of 2016, the net balance of international reserves amounted to US$7,144 million, or the equivalent of 26% of GDP.

4.100. As regards its trade regime, we congratulate Paraguay for its transparent and open tariff system. The average MFN tariff applied to agricultural products (WTO definition) was 9.9%, and to non-agricultural products, 8.2%. The weighted average of applied import duties was 3.2% in 2017.

4.101. Another of Paraguay's major reforms in the course of the review period was the enactment of the Law on the protection of competition (Law No. 4.956/13) and its implementing Regulations in 2013, and the establishment of the National Competition Commission (CONACOM). Paraguay also ratified the WTO Agreement on Trade Facilitation on 1 March 2016, and continued its reform process with a view to making customs administration more efficient and transparent and facilitating trade. These reforms include the adoption of a computerized risk management system, the implementation of an authorized economic operator programme, the introduction of the express consignment procedure, electronic transmission of air manifests, and the digitalization of customs documents.

4.102. Lastly, we thank Paraguay for its replies to the questions submitted by the Dominican Republic and trust that it will continue on the path of economic and social progress for its people.

ARGENTINA

4.103. We thank Paraguay for its reports, which enabled us to bring our knowledge of its trade policies and practices up to date, and for its replies to our written questions, which will receive our closest attention.

4.104. Special thanks are due to Ambassador Juan Esteban Aguirre for his unfailing cooperation in the ongoing work of the Mission of Argentina in this Organization.

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4.105. Argentina has the honour of sharing membership with Paraguay in MERCOSUR, where over the review period Paraguay ranked as the fastest growing economy.

4.106. Argentina is the second largest destination of Paraguayan exports.

4.107. Paraguay has done a remarkable job in maintaining its macroeconomic stability and a steady rise in GDP. We commend it in particular for achieving real GDP growth averaging 4.7% per year between 2011 and 2016.

4.108. It has also made appreciable efforts to maintain a moderate rate of unemployment and achieve real growth in financial services and the agricultural sector, as well as a significant increase in exports, especially of oilseeds, meat products and electricity.

4.109. As far as we are concerned, the measures that Paraguay has implemented to enhance the investment climate – especially by means of the Law on public-private partnership of 2013 – are highly relevant. Other aspects of interest to us are the single window for imports, in operation since 2010, the risk-based selection system, formally introduced in July 2015, the implications of the tariff concessions and exceptions granted, and the Law on the protection of competition, enacted in 2013.

4.110. We emphasize the recent signing of two memorandums of understanding between Argentina and Paraguay – the first concerning tax, economic and integration cooperation between the Ministries of Finance of the two countries, and the second aimed at strengthening connectivity for the supply of internet services via fiber-optic cable from Argentina. We should also mention that the aviation authorities have prepared a draft air services agreement and have agreed to increase the frequencies for each party from the former 28 to 42.

4.111. We especially underscore Paraguay's commitment, in the WTO framework, in driving forward issues such as e-commerce, the digital economy, investment facilitation, and micro, small and medium-sized enterprises. Also worthy of mention is the Paraguayan authorities' high level of commitment regarding the Eleventh WTO Ministerial Conference to be held in Buenos Aires and their readiness to engage in joint work so as to ensure that this meeting delivers positive and substantive outcomes.

4.112. Lastly, we reiterate our conviction that joint international integration through MERCOSUR makes us stronger. We recall that MERCOSUR's external relations agenda is extremely dynamic, with negotiations currently under way with the European Union, the Pacific Alliance countries and, among others, Canada, Korea, India and .

4.113. In closing, we reiterate how much we appreciate this renewed opportunity to exchange viewpoints and comments on the trade policies and practices of Paraguay, and would like to draw attention once again to the importance of this exercise in transparency from every point of view. We wish the Paraguayan authorities a successful conclusion to this review.

COSTA RICA

4.114. Costa Rica is pleased to take part in this trade policy review of Paraguay, which is an important South American trading partner for us, and the two countries share common interests and initiatives.

4.115. Costa Rica recognizes the constructive part played by Paraguay in the WTO, particularly in agriculture, where both our countries belong to the Cairns Group, and in trade facilitation, where Paraguay took a leading role during the negotiation of the Trade Facilitation Agreement in coordinating the Group of Landlocked Developing Countries.

4.116. Costa Rica also shares Paraguay's interest in encouraging small and medium-sized firms to participate in global trade – an objective that we both promote as members of the group of Friends of Micro, Small and Medium-Sized Enterprises.

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4.117. Turning to the trade policy review proper, we underscore Paraguay's macroeconomic stability over the review period, marked by dynamic GDP growth, a low rate of unemployment, an increase in international reserves, and prudent fiscal policy management.

4.118. Paraguay's external sector has been boosted by this strong economic performance, thanks in particular to buoyant domestic economic activity, electricity sales, and the agricultural sector, which continues to account for a large share of Paraguay's foreign trade. Two thirds of Paraguay's goods export earnings come from sales of agricultural and food products, especially oilseeds, meat and cereals, of which Paraguay is one of the world's leading suppliers. We also note that a high percentage of these exports go to MERCOSUR countries, reflecting a certain dependence in terms of goods and destination markets; it would therefore be interesting to explore further opportunities for diversifying Paraguay's export supply.

4.119. The enactment of legislation in areas such as investment protection, competition policies, electronic commerce and intellectual property is another welcome development, insofar as these contribute to enhancing Paraguay's investment climate and to fulfilling the objectives set out in the Paraguay 2030 National Development Plan (PND 2030).

4.120. We take careful note of the fact that the specific goals of the PND 2030 include tangible actions such as using and generating renewable energy sources. In this connection, we highlight Paraguay's leadership in producing and exporting hydroelectric power and other alternative energy sources; on the other hand, we also note that the country's energy policy goals include promoting hydrocarbon production. Could Paraguay explain the objectives pursued in producing fossil fuels and how this tallies with the incentives to promote clean and renewable energy?

4.121. Lastly, we acknowledge Paraguay's efforts to implement policies aimed at combating climate change as well as those made to increase women's economic empowerment and their participation in international trade.

4.122. For this trade policy review, Costa Rica submitted a set of questions to Paraguay concerning various aspects of its trade policy. We appreciate the attention given to these questions, and I will conclude by wishing Paraguay a successful trade policy review.

4.123. Tetanguera oñemu sasova oikopora hapichakuerandi (a phrase in Guaraní that translates as "trading peoples are always at peace").

THAILAND

4.124. Paraguay is Thailand's seventh largest trading partner in South America as bilateral trade between the two countries was value at US$78.2 million in 2016. Thailand had a US$20 million trade deficit with Paraguay with import of soy bean cakes and leather amounted to US$55 million in 2016.

4.125. We congratulate Paraguay's strong economic performance from 2011-2016 with growth averaging 4.7% as a result of stable macroeconomic environment and sound fiscal policy.

4.126. We commend Paraguay's open investment regime which saw the country passed several new laws during the review period to improve investment climate, leading to attractive tax incentives and permit the full repatriation of capital and profits.

4.127. Thailand also appreciates Paraguay's continued efforts in its Customs reform process with the adoption of a computerized risk management system, the implementation of the approved economic operator programme, the express consignment procedure, and the digitalization of customs documents.

4.128. In this review, Thailand submitted several questions to Paraguay and appreciates the prompt replies provided to our questions, for which we will study carefully with great interest.

4.129. Thailand thanks Paraguay for today's presentation. We appreciate the close cooperation with Paraguay here in Geneva and wish Paraguay every success in its fourth Trade Policy Review.

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ECUADOR

4.130. This trade policy review is of considerable interest to Ecuador because of our active trade, which is governed by and conducted under Economic Complementarity Agreement No. 59 between the MERCOSUR countries and the CAN.

4.131. It is also a happy coincidence that, on this very day, a business round is taking place in Asunción between Ecuadorian and Paraguayan entrepreneurs; this will undoubtedly enhance trade and investment relations between our two countries.

4.132. Our country being renowned for its world-class banana production, Ecuador has cooperated with Paraguay in promoting banana growing, under agreements aimed at increasing production.

4.133. With respect to the Secretariat report, we note the robust performance of the economy, the continued strengthening of the country's public finances, improved management of taxation, and a moderate unemployment rate fluctuating between 5% and 6%. It should also be emphasized that has Paraguay achieved its objective of reducing inflation levels, which stood at 3.9% in 2016, thanks to the implementation of an inflation-targeting scheme.

4.134. Further points worthy of note, among others, are Paraguay's share of the global market as the world's sixth largest producer and fourth largest exporter of soya beans and soya by-products, respectively, and as one of the world's leading producers and exporters of electricity; the opening of new markets; the expansion of manufacturing; and the rise in construction.

4.135. We acknowledge the work being done by the Government of Paraguay to establish rules in a number of fields to ensure the sustainability of public finances, by increasing tax collection and raising the share of tax revenue in GDP. As regards investment, we note the enactment of new laws to enhance the investment climate, such as the Law on public-private partnership, the Investment Protection Law, and Law on the protection of competition. In the intellectual property sphere, the creation of the National Intellectual Property Directorate is worthy of mention.

4.136. We also take note of the challenges facing the country in simplifying and streamlining the import licensing regime and improving customs management.

4.137. We acknowledge Paraguay's active participation in the WTO and its leadership role as coordinator of the Group of Landlocked Developing Countries in the negotiation of the Trade Facilitation Agreement and its subsequent ratification.

4.138. To conclude, we thank the delegation of Paraguay in advance for its answers to our questions concerning certain aspects of the country's trade policy, which will provide important inputs for strengthening bilateral relations in the area of foreign trade.

SINGAPORE

4.139. The Paraguayan economy has demonstrated resilience in the face of a turbulent regional and global environment. This was due in no small part to its strong macroeconomic fundamentals, as well as continued openness to trade and investment. Paraguay's determination to keep its economy open despite the headwinds has paid off, with GDP growth in Paraguay being one of the fastest in the Latin American region during the period under review. This is the clearest example of how geographical impediments - such as being landlocked – can be overcome, and how one can thrive and prosper as long as one maintains openness to trade, investment and globalization.

4.140. In many ways, Paraguay has also commenced a transition of its economy to better reflect an economy of the future. During the period under review, Paraguay has put in place new laws to reflect its desire to keep pace with the changes in the global economy, including the law on e- commerce, law on MSMEs, law on the protection of investment, as well as the relevant laws, and establishment of a national competition commission. We look forward to the positive impact of these new laws on the Paraguayan economy, including in the strengthening of bilateral economic relations between Singapore and Paraguay.

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4.141. At the WTO, Paraguay has been an active and constructive Member and we are appreciative of all their efforts in advancing the multilateral trading system. We commend Paraguay for their leading role in the conclusion of the Trade Facilitation Agreement, and being the first MERCOSUR country to ratify the agreement. Paraguay has also been a strong advocate for Agriculture market access and reform, which Singapore, too, supports. As Paraguay continues in its active role within the WTO, we hope that Paraguay will also redouble efforts to fulfil its outstanding notifications which are the cornerstone of WTO transparency efforts. We also encourage Paraguay to accept the Protocol of Amendment to the TRIPS Agreement, and to consider joining the Government Procurement Agreement (GPA) as well as the Information Technology Agreement (ITA).

4.142. Finally, we would like to note our appreciation for the positive role played by the Paraguay Mission in Geneva, led ably by Ambassador Juan Esteban Aguirre. Singapore looks forward to continuing our constructive cooperation with Paraguay to advance the multilateral trading system.

NEPAL

4.143. It is appreciable that Paraguay's macroeconomic outlook seems encouraging with sustained economic growth underpinned by sound economic fundamentals. It remained successful in maintaining annual growth in real GDP of over 4% an average during the review period, featuring 14% growth in GDP in 2013 and, thus, establishing record as the fastest growing economy in Mercosur. The 3 strategic priorities, namely: (i) poverty reduction and social development; (ii) inclusive economic growth; and (iii) integration into the world economy, set by the National Development Plan 2030 are important for sustainable development.

4.144. The relations between Nepal and Paraguay have remained cordial and friendly since the diplomatic ties between the two countries were established in 2006. There are rooms to enhance partnership for trade in goods and services, trade facilitation and other development issues, between two countries. As a landlocked country, both countries share some common concerns in many international meetings and conferences regarding the development challenges of LLDCs.

4.145. As the exports and imports of LLDCs are required to transit through at least one coastal neighbouring country, the cost of cross border trade for LLDCs gets substantially high which prevents them from effective integration into the global trading system. The data reveal that the transportation cost is 50% higher for landlocked countries than coastal countries. Similarly, the geographical challenges of LLDCs are often compounded by weak transit-transport infrastructure, inefficient customs operations, and over-dependence on the exports of primary commodities.

4.146. Implementation of the priorities set by the Vienna Programme of Action (VPoA), such as trade, transit, infrastructure, trade facilitation and structural economic transformation are substantially significant to integrate the LLDCs into the multilateral trading system.

4.147. Nepal and Paraguay, along with other Members, could work together, mainly in three areas. Firstly, strengthening the International Think Tank on LLDC, based in Mongolia, to frame the right policies and strategies to better integrate LLDCs into the MTS. Secondly, implementing the TFA to address both software and hardware part of trade related infrastructures by addressing at the border, behind the border and beyond the border issues. Thirdly, working together to convert traditional feature and concepts of landlocked country to land linked country through physical and digital connectivity at the regional and international level. Effective implementation of VPoA could be supportive to this end.

4.148. Finally, I wish Paraguay a great success in your effort as a Chair of the LLDC and also wish a successful Trade Policy Review.

INDIA

4.149. At the outset, I join other delegations in expressing our deep sympathy to the people in the Caribbean and Mexico for the loss and suffering due to the recent natural disasters.

4.150. Paraguay is amongst the fastest growing economies in the region and within MERCOSUR. During the period under review, between 2011 and 2016, the GDP of Paraguay grew at an average

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- 29 - rate of 4.7% with a stable macro-economic environment. The economy of Paraguay is expected to maintain this economic growth rate in 2017 and 2018. The key sectors driving the economic growth include financial services, general Government, construction and agriculture. The Government of Paraguay has also steadily implemented an agenda of economic reforms in several areas including implementing prudent fiscal policy, management on taxation, strengthening public finances and protection of investments etc. We commend the Government of Paraguay for these measures and also for Paraguay's visionary National Development Plan 2030 with the strategic priorities of reducing poverty, social development, inclusive economic growth and integration into the world economy.

4.151. India and Paraguay share close, cordial and friendly relations. The trade between both countries has continued to grow steadily in recent years and stood at US$211 million in 2016. There have also been regular exchanges of business delegations. There is considerable potential for promoting trade and investment between both countries in areas like chemicals, automobiles, pharmaceutical products, machinery, edible oils, aluminum, rubber products etc. Indian companies are also looking for investing in Paraguay in chemicals, plastic, Information Technology, pharmaceuticals and other areas.

4.152. For capacity building in human resources India has been regularly offering slots to professionals from Paraguay under the India Technical Economic Cooperation (ITEC) programme.

4.153. To conclude, we look forward to working with the authorities of Paraguay for further expanding our trade and investment ties for mutual benefit. We wish the delegation of Paraguay a productive and successful TPR.

SRI LANKA

4.154. At the outset, I wish to take the opportunity to convey our deepest sympathies to people who were affected due to the earthquake in Mexico and to the people of the Dominica Caribbean Region who were affected due to the devastating hurricane.

4.155. Let me congratulate the Government of Paraguay for the robust economic performance since its last TPR in 2011. It is noteworthy the real has grown at an average annual rate of 4.7% during the review period, ensuring a stable macroeconomic environment within the country. This healthy economic performance is also reflected in its balance of payments current account, in particular the large surpluses on the goods trade balance. The net balance of international reserves to GDP ratio further supports this outstanding performance.

4.156. My delegation recalls with appreciation the active role played by Paraguay as a founding Member of the WTO, particularly on Agriculture negotiations in the negotiating groups such as the Cairns Group and the G-20. Reaffirming Paraguay's commitment to the multilateral trading system, it became a Member of the WTO Trade Facilitation Agreement in March 2016.

4.157. We also note with great interest that Paraguay has bound 100% of its tariff lines, ensuring business predictability at rates that range from 10% to 35%. The most interesting thing is the simple average applied MFN tariff in 2017 is only 8.4%. The average MFN tariff applied to agricultural products is 9.9%, while for the non-agricultural products it is 8.2%.

4.158. The domestic law in Paraguay for foreign direct investments is highly predictable. It guarantees national treatment for foreign investors, the only exception being the land ownership for foreigners.

4.159. Let me briefly reflect on the bilateral trade and other economic relations between two countries. Although the two way trade between two countries does not demonstrate a persistent pattern, Sri Lanka continues to enjoy trade surplus with Paraguay, with an exception in 2011. Out of Sri Lanka's exports to Paraguay, approximately 50% is represented by Rubber articles, followed by Activated carbon, , Tea and Apparel in small quantities.

4.160. In concluding, my delegation appreciates Paraguay's highly valued contribution to the multilateral trading system and its active engagement in the negotiations in the WTO. The dynamic

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- 30 - role played by Ambassador Juan Esteban Aguirre in proactively engaging in ongoing activities of WTO, is highly admirable.

4.161. We sincerely wish the delegation of Paraguay a successful deliberation at its 4th Trade Policy Review.

EL SALVADOR

4.162. We note from the Secretariat report that the Paraguayan economy has performed robustly since the previous review in 2011. Real GDP grew at an average annual rate of 4.7% during the review period, underpinned by a stable macroeconomic environment which favoured growth and held down inflation expectations. The most vigorous economic sectors were financial services, construction, general government and the agricultural sector, which is the main source of exports. Moreover, Paraguay continued to strengthen its public finances by implementing prudent fiscal policies and improving taxation management, and introduced new legislation to lay down rules aimed at ensuring the stability and sustainability of public finances.

4.163. From the Government report we further note how the design and implementation of market-oriented economic policies made for an excellent business climate, together with good harvests for the main crops, a steady increase in livestock production, the opening of new markets, an expansion of manufacturing and a rise in construction (public and private), among other factors. The Paraguay 2030 National Development Plan with its three major strategic priorities, namely (i) poverty reduction and social development, (ii) inclusive economic growth, and (iii) appropriate integration into the world economy, focuses the Government's efforts on designing and implementing an economic policy aimed at achieving inclusive, environmentally friendly growth featuring innovation and technological development. This has enabled the country to maintain its sound performance despite the unfavourable global environment that has adversely affected most of its neighbours and trading partners.

4.164. At the multilateral level, the delegation of Paraguay has been active in sponsoring various proposals to reduce tariffs, tariff peaks and tariff escalation for agricultural goods, in order to encourage and achieve consensus. It has demonstrated its support for the conclusion of the Doha Round through various negotiating groups, such as the G-20, the Cairns Group and the Group of Landlocked Developing Countries. It is also actively involved in new issues, such as e-commerce and investment facilitation.

4.165. At the bilateral level, precisely one year ago, on 21 October 2016, El Salvador and Paraguay signed a memorandum of understanding to establish a mechanism for political consultation and bilateral coordination between the two countries, with a view to reinforcing their mutual ties at the political, commercial and cultural levels, facilitating the strengthening of trade relations, and intensifying cooperation, especially South-South cooperation.

4.166. Trade between El Salvador and Paraguay has remained stable in recent years. According to data from the Central Reserve Bank of El Salvador, El Salvador's exports to Paraguay in the period 2014-2016 mainly consisted of medicines for human use, fiberglass products and articles of aluminium, while imports from Paraguay over the same period included medicines for human or veterinary use, swimwear of synthetic fibres and footwear.

4.167. In light of the foregoing, it only remains for us to congratulate Paraguay for its outstanding performance and to wish it every success in this exercise.

THE SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU

4.168. First of all, like everybody in this room, our hearts go to Mexico as well as the Caribbean neighbors for the victims of the earthquake.

4.169. As we see from the reports, the Government of Paraguay has successfully implemented its programme of market-oriented economic policies, helping it to become the fastest-growing economy in MERCOSUR. In fact, over the last few years, mainly through the government's prudent macroeconomic and fiscal policies, GDP has risen steadily, public finances are restored to a healthy state, and the economic outlook has been stabilized.

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4.170. It is important now for Paraguay to continue to develop its regional and bilateral cooperative trading relationships, while at the same time participating actively in the regular work of the WTO, expanding trade with other Members, and striving to diversify its own economy.

4.171. We certainly look forward ourselves to greater economic cooperation with Paraguay in the future, especially in the tourism sector. Although the value of two-way trade between us at present is only some US$47 million per year, we are sure that the multilateral trading mechanism that bonds us together through the WTO provides plenty of opportunities for us to develop closer trade and economic links.

4.172. Indeed, it was encouraging that in July of this year, President Horacio Manuel Cartes Jara paid his third officially visit to the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, to celebrate the 60th anniversary of friendship between our two governments and people. This visit not only strengthened the relationship further but also allowed us to explore the possibilities for new business opportunities with Paraguay in the future, which we are sure welcomed.

4.173. I would like to conclude by wishing Paraguay a most successful and constructive Trade Policy Review.

GUATEMALA

4.174. I would like to express my concern and echo the words of the colleagues who preceded me in speaking about the natural disasters that have battered our region, especially Mexico, which suffered two extremely powerful earthquakes, and about the victims of the disasters in the Caribbean, particularly Dominica, with the devastating damage it is facing at this time.

4.175. Relations between Guatemala and Paraguay are based on close ties of friendship, cooperation and convergence, as evidenced by the Tourism Cooperation Agreement signed in 2015, under which our countries established strategies to strengthen community tourism as a factor of economic development.

4.176. It is important to note the robust performance of the Paraguayan economy since its previous trade policy review. The policy of fiscal consolidation established by the enactment of the Law on fiscal responsibility in 2013 has led to an improvement in tax collection.

4.177. As regards intellectual property, Paraguay has made a number of changes to its legislation concerning patents, trademarks, copyright and related rights and has created the National Intellectual Property Directorate (DINAPI), which is actively engaged in taking preventive measures through its Directorate-General of Enforcement to punish counterfeiting and piracy.

4.178. Turning to today's review of Paraguay's trade policies, we note that the review period saw the enactment of the Law on the protection of competition and its implementing Regulations, as well as significant structural reforms that have contributed to economic growth by enhancing fluidity and efficiency in trade with third countries.

4.179. We hope to continue strengthening our important ties with Paraguay and wish its delegation a successful conclusion to its country's trade policy review.

PANAMA

4.180. As did other delegations before me, I would first of all like to express our condolences and sympathy to the countries and above all to the victims of the recent series of natural disasters in the region.

4.181. Panama commends Paraguay for its economic performance during the period under review. The Paraguayan economy has proved resilient in the face of the international fluctuations in food and raw material prices, recording sustained growth and moderate inflation over the past five years, all of which have made it one of the region's leaders in macroeconomic development in recent years.

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4.182. Trade between Paraguay and Panama has increased significantly over the past few years, Panama being a major purchaser of medicines and machinery in Paraguay; Paraguay, for its part, is an important partner and buyer from our Colón free zone.

4.183. We also emphasize Panama's foreign direct investment in Paraguay, where Panama comes fifth worldwide and second in the Latin American region in terms of the amounts invested in Paraguay these past few years.

4.184. We underscore Paraguay's importance as a regional MERCOSUR partner, particularly in agricultural markets, where Paraguay is the fourth largest producer of soya beans and comes sixth as regards bovine meat.

4.185. Paraguay is a committed member of this Organization and others in Geneva, as evidenced by the work done by Ambassador Aguirre and his entire team, particularly in the negotiations and discussions on agriculture. It plays a leading role in various groups, such as Group of Landlocked Developing Countries. It has driven issues critical to this Group, for example electronic commerce as a development tool, and has pushed forward proposals and actively participated in the preparations for MC11.

4.186. We welcome Paraguay's recent initiatives, which include the development of infrastructure to link countries in the region. Paraguay and the region already have infrastructure works such as the continent's two largest dam schemes that supply electricity to Argentina and Brazil. There is also the Government's 2030 plan for the country, which provides a roadmap for stability and a clear strategy to ensure that trade becomes a tool for development in the years to come.

4.187. Although macroeconomic stability and the country's institutional strategies are taking Paraguay forward on the path to development, major challenges still need to be addressed. These include reducing extreme poverty and inequality, whose indicators are high in relation to the country's southern neighbours. Paraguay must also continue diversifying its economy and exports beyond primary food commodities and aim to build an economy based on value-added chains for such products, thus benefiting other economic and social sectors.

4.188. Before concluding, we would like to highlight the significant steps that Paraguay has taken in recent years towards a more open and inclusive economy. Sound management of the national treasury has led to fiscal surpluses in recent years, along with robust economic growth. It only remains for us to wish the delegation of Paraguay a successful review.

HONDURAS

4.189. As other Members have already done, Honduras expresses solidarity with the people who are suffering the consequences of the recent natural disasters. Our thoughts and prayers are with them.

4.190. The Government and Secretariat reports both show that the Paraguayan economy performed robustly during the period under review and that real GDP grew at an average annual rate of 4.7% between 2011 and 2016, underpinned by a stable macroeconomic environment which favoured growth and held down inflation expectations.

4.191. We also note that the unemployment rate remained moderate during the review period, generally fluctuating between 5% and 6%, and that Paraguay's balance-of-payments current account was in surplus every year with the exception of 2012 and 2015.

4.192. Through most of the review period Paraguay added substantially to its stock of international reserves, and at the end of 2016, the net balance amounted to US$7,144 million, or the equivalent of 26% of GDP.

4.193. We further note that the services sector as a whole is still the main component of GDP, as illustrated by the fact that in 2016 it generated 55.4% of current gross value added, and that Paraguay is one of the world's leading producers and exporters of hydroelectric power.

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4.194. Agriculture and livestock are important activities for Paraguay. This has enabled it to become the world's sixth largest producer and fourth largest exporter of soya beans and soya by-products, in addition to being a major producer and exporter of beef.

4.195. We underscore Paraguay's trade strategy, framed by the guidelines of its National Development Plan (PND) 2014-2030, which is influenced by the country's participation in MERCOSUR and is based on key pillars such as the country's traditional exports of agricultural, livestock and forestry products; the export of hydroelectric power to neighbouring countries; and commercial intermediation.

4.196. We further note that the review period saw the enactment of the Law on the protection of competition and its implementing Regulations in 2013, as well as the establishment of the National Competition Commission. As regards intellectual property rights, Paraguay made a number of changes to the laws governing patents, copyright and related rights, and trademarks; it also created the National Intellectual Property Directorate (DINAPI).

4.197. It is relevant to mention that the reforms undertaken included the adoption of a computerized risk management system, the implementation of an authorized economic operator programme, the introduction of the express consignment procedure, electronic transmission of air manifests, and the digitalization of customs documents, as well as the Law on electronic commerce, which contains provisions to protect consumers or users by laying down obligations and responsibilities for suppliers of goods and services and for intermediaries.

4.198. Honduras congratulates the Republic of Paraguay for its substantial efforts and progress over the review period and wishes it every success.

PAKISTAN

4.199. Like others, we want to express our sympathy and condolences to Mexico and other countries of that region which have been adversely affected by the natural disasters recently.

4.200. Pakistan commends Paraguay on its economic performance. Since the last review of Paraguay in 2011, the country's economy has performed very well. Real gross domestic product (GDP) grew at an average annual rate of 4.7% between 2011 and 2016. The most vibrant economic sectors during 2011-2016 were financial services, construction, general government and the agricultural sector, which is also the main source of exports. The unemployment rate remained moderate during the review period, generally fluctuating between 5% and 6%.

4.201. Paraguay continued to implement prudent fiscal policies and improve its management of taxation. New legislation was introduced, establishing rules aimed at ensuring the stability and sustainability of public finances. This policy of fiscal consolidation has led to an improvement in tax collection and an increase in the share of tax revenue in GDP.

4.202. During the review period, Paraguay's balance of payments current account has been in surplus every year with the exception of 2012 and 2015. Exports and imports of goods and non-factor services amounted to the equivalent of 83.7% of GDP in 2016. The structure of Paraguay's merchandise exports remained stable during 2011-2016, with main export items consisting of chemical products, leather articles, and textiles and clothing and imports were machinery and transport equipment, chemical products and mineral products.

4.203. Pakistan appreciates that Paraguay has an investment regime that is open to foreign direct investment. The law guarantees national treatment of foreign investors, the only exception being land ownership in border areas. Paraguayan laws offer tax rebates to investors and permit the full repatriation of capital and profits. During the period under review, Paraguay passed new laws to further enhance the investment climate: The Law on public-private partnership of 2013, the Law on public works of 2013 involving financing or turnkey contracts, and the Investment Protection Law of 2015. The Investment Protection Law protects the repatriation of capital and profits, provides guarantees against administrative and judicial practices that may be deemed discriminatory, and provides for fiscal incentives for up to 20 years.

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4.204. We have keenly observed that Paraguay's intellectual property legislation underwent a number of changes during the review period involving the decrees implementing the laws governing patents, copyright and related rights, and trademarks. The National Intellectual Property Directorate (DINAPI) was created, partly for the purpose of improving the enforcement of intellectual property rights. Another change consisted in the adoption, in 2013, of the Law on geographical indications and designations of origin, which provides a term of protection of ten years as from registration, indefinitely renewable for further ten year periods.

4.205. Pakistan has noted that services are making headway in Paraguay. Financial services are considerably liberalized, however with some limitations. Foreign-owned banks have a significant presence in Paraguay: in February 2017, they held 55.5% of bank assets and 52.2% of deposits. For a company to be able to obtain authorization to provide insurance services, it must be legally established in Paraguay as a public limited company and exclusively devoted to providing insurance. On the other hand, there are no restrictions on the participation of foreign capital, the number of companies or subsidiaries, or the type of insurance services that the foreign insurance companies established in the country may offer. In the telecommunications sector a number of new rules have been approved since the last review in connection with the procedure for obtaining licenses and authorizations for the supply of Internet access and data transmission services, satellite transmission of occasional signals and cable service. The requirements for obtaining licenses and authorizations are the same for domestic and foreign companies. Airlines may be up to 100% foreign-owned. Paraguay is also one of the world's leading producers and exporters of hydro-electric energy. We feel that liberal policies will enhance productivity even further.

4.206. Here in Geneva, we wish to commend the active role of Paraguay in the work of the WTO, particularly in the negotiating groups such as the Cairns Group and the G-20 in the realm of agriculture.

4.207. In the end, we want to wish Paraguay a very successful and fruitful Trade Policy Review.

JAPAN

4.208. Like other speakers, Japan would like to extend its condolences and sympathy to Mexico which is now suffering from the natural disasters. My condolences also go to the Caribbean region which has also suffered from the national disasters.

4.209. Although Paraguay and Japan are geographically distant from each other, we have developed a long friendly relationship. As is still fresh in our memory, last year, we had the 80th Anniversary of the Japanese Immigration in Paraguay. At this occasion, many Paraguayan and Japanese people celebrated this Anniversary and everlasting friendly relationship.

4.210. Japan will make continuous efforts to maintain and further develop the strong ties between us.

4.211. According to the Secretariat report, since the last Trade Policy Review in 2011, the country's economy has performed robustly. GDP grew at an average annual rate of 4.7 %. Inflation rate has been stabilized at less than 5%, thanks to the ambitious Inflation targeting policy by the Central Bank Paraguay (BCP). Exchange rate has also been stable.

4.212. Japan hopes Paraguay will maintain such economic stability.

4.213. In terms of investment regime, Japan commends the country's continuous efforts on improving investment environment as the driving force of economic growth. In addition to the aforementioned macroeconomic stability, its geographic location surrounded by the large consuming areas in South America and the huge young population are now attracting foreign direct investment.

4.214. Moreover, its economic policies, such as low income tax rate, incentive regimes including the "Maquila Regime" and supply of cheap and abundant electric power, contribute to the economy of Paraguay. We commend those investment policies. Also, the appointment of technocrats to ministers has also increased the credibility of the government's economic policy management.

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4.215. However, we are aware that there is room for improvement in the Paraguayan economy. In particular, the stability of electricity supply, further progress of transportation infrastructure, the expansion of investment in education and public health are areas where Japan urges Paraguayan Government to make further efforts.

4.216. In conclusion, I would like to express our strong wish to continue cooperation between Paraguay and Japan. We wish Paraguay a successful and productive TPR.

PERU

4.217. We join those who have expressed solidarity with Mexico and the other countries of the region affected by the recent natural disasters.

4.218. welcomes Paraguay's excellent economic performance during the review period, in particular as regards its annual growth rates, its exports of clean energy and the important role of trade in the country's economy. We also commend Paraguay for its stable public finances, legal developments with respect to public and private investment, social protection programmes, and the promotion of MSME integration. Thanks to Ambassador Casanueva's statement, we are pleased to note the Paraguayan economy's considerable potential for diversification, a challenge that we share along with several other countries in the region.

4.219. Trade relations between Peru and Paraguay are conducted within a special legal framework, Economic Complementarity Agreement No. 58, concluded under the LAIA, which also comprises the other MERCOSUR members, and thanks to which many tariffs have been removed and economic cooperation has been encouraged. Although this Agreement has led to a significant increase in trade between Peru and MERCOSUR as a whole, we can see that much remains to be done in developing our trade relationship with Paraguay, which still shows a major balance-of-trade surplus in favour of the latter.

4.220. Although we did not submit any questions for this review, we have highlighted the points made in the Secretariat report concerning the import licensing system for certain products, the imposition of charges other than the tariff, and the application of some tariffs in excess of the bound levels.

4.221. We would also like to take this opportunity to acknowledge the important work being done by the delegation of Paraguay in this Organization, playing an active role in promoting higher levels of trade liberalization, putting forward its own concrete proposals and submissions, and giving prompt consideration to the initiatives of other Members.

4.222. To conclude, my delegation wishes Paraguay all the very best in pursuing its course of economic and trade development, for which it can count on Peru as a partner, and a successful fourth trade policy review.

INDONESIA

4.223. Indonesia applauds Paraguay for the robust performance of its economy, as underpinned, among others, by a stable macroeconomic environment, by low inflation expectations, and through the implementation of prudent fiscal policies.

4.224. Paraguay is an important trade partner of Indonesia. In the last five years, in the period between 2012 and 2016, Paraguay and Indonesia have been enjoying a good trading relationship. Indonesian exports value to Paraguay has been experiencing a positive average yearly growth compared to the negative values accruing to the other three MERCOSUR economies. And amongst MERCOSUR economies, Indonesian-Paraguay bilateral trade value experienced the largest average growth of 68.9% – a significant growth level compared to that accruing to other MERCOSUR trading partners – which are recorded to accrue at a level below 5% or even at a negative digit.

4.225. But on top of the above-mentioned growth of bilateral trade, Indonesia wishes to highlight that Paraguay has been capitalizing more from this fruitful trade ties. Over the same period of 2012 to 2016, Paraguay's exports into Indonesia experienced a staggering average yearly growth of 199.4%.

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4.226. Indonesia would surely want to balance this export performance. Apart from , Indonesia wishes to diversify our exports of automotive parts and accessories – which have been amongst the main products Indonesia exports to Paraguay.

4.227. In light of Paraguay's new "national automotive policy" (the PAN) introduced in 2012, and in light of the fact that the most recent notification submitted by Paraguay to the Committee of Subsidies and Countervailing Measure was made in 2010, Indonesia urges Paraguay to notify the WTO on its incentives programmes under the national automotive policy.

URUGUAY

4.228. Uruguay extends a most cordial welcome to the delegation of Paraguay in this important forum within the multilateral system. Our country maintains friendly and constructive relations with Paraguay in the various spheres covered by our bilateral relations, which include not only policy, the economy and trade, but also cooperation and culture.

4.229. Political and trade relations between Uruguay and Paraguay have grown stronger since the previous review of Paraguay's trade policies in 2011. In April and June 2015, the President of Uruguay, Mr Tabaré Vázquez, and the , Mr Horacio Cartes, met in the course of official visits. Both reaffirmed their commitment to the adoption at the Common Market Council meeting in July 2015 of a decision aimed at preparing a plan of action to achieve MERCOSUR's goals and further develop the free trade zone. They also reiterated their undertaking to continue advocating for a successful outcome of the negotiations on the signing of a partnership agreement between MERCOSUR and the European Union.

4.230. There is a significant amount of bilateral trade between Uruguay and Paraguay, with Paraguay ranking 11th in 2016 as a destination of Uruguayan exports, which amounted to US$223 million in that year. In 2014-2016, Uruguay's main export products were tobacco, pharmaceuticals, and paper and paperboard. In that same period, imports from Paraguay consisted mainly of cereals, products of the food industry, and tobacco.

4.231. Uruguay would briefly like to mention its interest in having a bilateral meeting with the Paraguayan delegation to discuss the application of non-automatic licences for cement imports, which are facing difficulties when it comes to successfully completing the export process.

4.232. Uruguay commends Paraguay for its ongoing work in the WTO and the Goods Council in particular, its work relating to e-commerce, and the proposals put forward in the Committee on Agriculture, the Cairns Group and the group of Friends of MSMEs.

4.233. Uruguay wishes Paraguay a very successful fourth trade policy review.

H.E. AMBASSADOR LUIS FERNANDO ÁVALOS (HEAD OF DELEGATION)

4.234. This is simply to express thanks for all the statements, comments and observations, which we will, of course, need to take into account. I would kindly ask the WTO Secretariat to remedy an omission, due to my workload and perhaps a little added pressure, by including a mention of Paraguay's solidarity with the Mexican people struck by this devastating earthquake, so that this is recorded in the minutes.

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5 REPLIES BY THE REPRESENTATIVE OF PARAGUAY AND ADDITIONAL COMMENTS

H.E. AMBASSADOR LUIS FERNANDO ÁVALOS

Opening remarks

5.1. Good morning to you all. I would like to extend the Paraguayan Government's renewed thanks to Ambassador Juan Carlos González for conducting this meeting.

5.2. I am also grateful to Ambassador Héctor Casanueva for acting as the discussant in this review and for his valuable and insightful presentation, which covered a number of aspects relating not only to the Paraguayan economy but also to the country's history and culture.

5.3. My thanks go to Members that have expressed interest by offering their comments last Wednesday and submitting advance questions, which have all been answered, including those that arrived after the scheduled deadline.

5.4. It has been an honour for me to spend two days with WTO Members reflecting and sharing points of view on the trade policies implemented by Paraguay over the past six years.

Recognition of the reforms implemented

5.5. I reiterate that Paraguay undertook major trade policy reforms during the period under review in order to consolidate the foundations for high, sustainable and socially inclusive growth. I would like to point out that we have achieved tangible results, whilst recognizing that there is still much to be done. We appreciate the comments received during this review, because they will be very useful in meeting the challenges we have set ourselves for the medium and long term.

5.6. We would like to take this excellent opportunity to clarify a few points that we had no time to address on the first day.

5.7. We will focus mainly on areas highlighted by Members, and if you will allow me, Mr Chairman, I will now give the floor to the members of my delegation, starting with the Vice-Minister for Trade in the Ministry of Industry and Trade, Mr Oscar Stark.

Diversification, export supply and export destinations

5.8. Although Paraguay faces challenges in terms of export supply and diversification of its export markets, the Government encourages policies to address these issues by establishing public-private sectoral roundtables that link and promote export competitiveness and diversification.

5.9. Acting through the Ministry of Industry and Trade, Paraguay has developed a long-term Industrial Development Plan (PDI). The PDI is a management tool aimed at promoting the development of value chains as well as industrial clusters and sectors with clear comparative advantages and an export-oriented approach, through capital and knowledge accumulation, continuous improvement of the business climate and an investment attraction process.

5.10. Paraguay has made major strides in promoting the use of renewable energy, in particular under Law No. 2748/05 on the promotion of biofuels and its implementing Regulations, whose objective is to establish and drive forward programmes that encourage firms and industries to set up in the country's new poles of development under a production chain and cluster approach. Industrial production and agricultural raw materials, as well as the domestic use of biofuels, have thus been declared of national interest.

5.11. There has also been a drive to promote institutional development through the establishment of the Observatory for Renewable Energy and the creation of renewable energy directorates in the binational hydroelectric enterprises (Itaipú and Yacyretá), the National Electricity Authority (ANDE) and the National Institute of Technology, Standardization and Metrology (INTN). In addition, we should mention the enactment of Law No. 5183/14 on incentives for the import of electric vehicles and the installation of recharge stations for electric vehicles.

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5.12. The import licences introduced by Paraguay seek to improve product quality control, compliance with technical regulations aimed at preventing misleading practices, and the protection of human health or safety, as well as that of animal or plant life or health. It is important to emphasize that only a dozen products are subject to licensing in Paraguay.

5.13. In most cases these are automatic licences, which are processed and granted within an average of one to five days. There are also non-automatic licences, which are granted within an average of one to ten days.

5.14. All import licensing procedures are carried out electronically for trade facilitation purposes. The licensing requirements are available on the web and have been notified to the WTO.

Notifications

5.15. As regards the notification obligation under the various Agreements, I would like to report that this year saw the submission of a series of notifications under the Agreements on Technical Barriers to Trade, Subsidies and Countervailing Measures, Anti-Dumping, Import Licensing, and Sanitary and Phytosanitary Measures. I would also point out that we are working on all the notifications outstanding for this year.

5.16. Regarding the question on fossil fuel production, these products are no longer exploited but there are viable technical and economic expectations concerning natural gas extraction; this would make it possible to refine, transport, store and market this fuel. In accordance with the relevant legislation, exploitation will be contingent upon environmental protection and impact.

5.17. Lastly, I am grateful for the offer made by the Government of Japan to work on strengthening services, specifically in the tourism sector. We will be in touch shortly to address the subject. Thank you.

5.18. I now give the floor to the Director of Integration in the Ministry of Finance, Mr José Cuevas Sanchez.

5.19. I would like to refer specifically to comments on the increase in the level of Paraguay's public debt, which in fact grew by only 9.3% of GDP in the five-year period 2012-2017, well below the 13.8% rate in the rest of the region.

5.20. Paraguay's debt-to-GDP ratio is 23.8%, the lowest in Latin America and the Caribbean and far below the regional average of 58%. Furthermore, the World Bank points out that the national debt, in relation to Paraguay's rate of economic growth and tax structure, is sustainable as long as it remains under 45% of GDP.

5.21. The report published by the Inter-American Development Bank (IADB), entitled "Routes to Growth in a New Trade World", places Paraguay among the countries that do not require any increase in tax rates to meet the commitments undertaken.

5.22. Likewise, the latest international bond issue consolidated Paraguay's position as an economically stable and financially sustainable country, as demand largely outstripped available supply and was also reflected in the 6.1% paid interest rate, below the average for 30-year bonds issued by countries with the same credit rating (BB), which stood at 6.29%.

5.23. Lastly, it should be emphasized that at the end of the period, the capital and interest would represent no more than 1.4% of GDP at the most and less than 11% of tax revenue; the weight of the latest bond issue for an amount of US$1,000,000 will be only 0.8% of GDP in the year 2044, when the capital falls due.

Domestic tariffs exceeding the bound levels

5.24. Paraguay has bound all of its tariff lines ad valorem, with a ceiling rate of 35%, and remains committed to applying these levels at the highest to imports in accordance with the most-favoured-nation principle.

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5.25. In most cases, the MERCOSUR common external tariff is the same as the domestic tariff, and Decree No. 6655/16 guarantees that the bound rate is the maximum level applied to each tariff line; its application is guaranteed by the presentation of a certificate of origin.

5.26. On the other hand, it should be pointed out that Paraguay trades with countries all over the world, some of which are not WTO Members and to which Paraguay may apply tariffs above the bound levels.

5.27. I now give the floor to the Director of Customs Procedures in the National Customs Directorate, Mr Américo Pereira Rodi.

5.28. Positive comments were made in this room on Wednesday about some of the numerous processes under way in the National Customs Directorate. I would like to offer some further information in that Paraguay has made significant headway in using technology to fulfil its international commitments regarding trade facilitation, security and the efficiency of tax collection.

5.29. One aspect worthy of mention in that regard is the strengthening of the single window for imports for the electronic processing of documents required for goods entering the country, including electronic payment of fees and taxes.

5.30. I should also mention the entry into operation of the computerized system for receiving advance information on air freight, based on IATA standards, which has substantially reduced the time needed for clearance. Another stage of the system is currently being completed for the purposes of river and land transport operations.

5.31. Likewise, work is under way to complete the automation of the risk management system at Customs, identifying operations that present some type of risk. As the situation stands, the number of physical inspections were reduced from 84% in 2014 to 30% in 2016.

5.32. The authorized economic operator system for streamlining procedures is also in operation. We have started the authorized economic operator migration process provided for under the WTO Trade Facilitation Agreement, which, in addition to streamlining, includes the security component based on the WCO's Framework of Standards to Secure and Facilitate Global Trade.

5.33. Further major strides have been made in the digital management of customs procedures. The express consignment procedure is entirely electronic, that is, without any hard copies. By the end of this year, customs processing by means of digital signature will be extended as a mandatory requirement to all customs regimes, in line with measures to protect the environment and to ensure greater integrity of information.

H.E. Ambassador Luis Fernando Ávalos

5.34. Mr Chairman, there is not enough time to address all the questions raised by Members, but in recognition of the interest they have shown, I would like to highlight a few of the actions currently being or to be implemented in areas in which interest has been voiced in this room.

5.35. The outstanding notifications under the Trade Facilitation Agreement, that is, Categories B and C measures, to which frequent reference was made on Wednesday, are due to be submitted shortly, before the end of this year.

5.36. I should also like to express appreciation for the interest shown in education and innovation and briefly mention the fact that, for the first time in 150 years, Paraguay has incorporated a series of measures under the "Don Carlos Antonio López" (BECAL) National Postgraduate Master's and Doctoral Programme, for an amount of US$71 million, aimed at teachers and university graduates engaged in specialized studies abroad, with an emphasis on science and technology.

5.37. Moreover, the National Council for Science and Technology (CONACYT) has set up the National Research Incentive Programme (PRONII), whose objective is, inter alia, to strengthen, consolidate and expand the country's scientific community. In 2015, the Ministry of Education and Science and the OECD also signed an agreement with a view to Paraguay's participation in the Pisa for Development programme.

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5.38. As regards poverty reduction and inequality, I would briefly emphasize that this is one of the three pillars of the National Development Plan 2030, which details all aspects of the issue and sets tangible goals for specifically attending to vulnerable groups; these goals are consistent with the Sustainable Development Goals.

5.39. Unfortunately, there is not enough time to deal with all the areas mentioned. Should there be any specific questions that were not answered above – I can inform Members that we are in the process of consulting with the competent authorities regarding the issue of sanitary requirements for the importation of meat – replies will be provided promptly. I can also inform the European Union that its additional written question received yesterday will be answered shortly.

Conclusions

5.40. We are greatly encouraged by the fact that Members have acknowledged our efforts and we agree that there are major challenges and opportunities ahead of us. We know that we have achieved significant progress, which is helping us to promote structural changes to the economy, expand production, increase export supply, generate greater value added for our products, and integrate our enterprises in regional and global value chains.

5.41. It has also been heartening to hear positive comments from the States represented by the delegates who are here today regarding Paraguay and its WTO commitments. On behalf of my country, I reiterate our determination to continue contributing actively and constructively to a stronger multilateral trading system.

5.42. To conclude this fourth review of its trade policies, Paraguay wishes to renew its commitment to open and inclusive trade, which we regard as a means of raising standards of living, ensuring full employment and a large and steadily growing volume of real income, as stated in the preamble to the Agreement establishing this Organization. Likewise, we express renewed confidence in the multilateral trading system; we need it to be strong, transparent and predictable, with clear rules and without distortions undermining the competitiveness of economies and especially the least developed economies.

5.43. Our next challenge is the Buenos Aires Ministerial Conference, where, again, we will have to be creative and pragmatic if we are to demonstrate once more that, despite our differences, the WTO can deliver outcomes favourable to all. Thank you.

DISCUSSANT

5.44. Having listened last Wednesday to the statements made by the Vice-Minister and the 27 Missions that took the floor, and looked at the questions raised and answers given during the review, I congratulate Paraguay on the well-deserved compliments it has received.

5.45. This fourth review of Paraguay's trade policies has given us a better insight into the country's trade policy developments since the preceding review. The reports submitted and the statements made by the delegation and the Missions have also enabled us to immerse ourselves more fully in Paraguay's reality in terms of its institutional dimension, socio-economic situation, development trends, and the opportunities and challenges ahead.

5.46. My impression is that Wednesday's discussions were fruitful, not only in highlighting Paraguay's sound economic and trade performance over the review period, but also in encouraging the country to take some of its improvements forward in the future.

5.47. It could be said that the fruitful day spent on Wednesday fulfilled the objective for which this mechanism was created, because it gives Members a transparent and enlightening view of one of their peers.

5.48. When one of us – Paraguay in this case – decides to undergo a comprehensive review of its economy and trade policies, it contributes to strengthening the multilateral system.

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5.49. The Organization gains in cohesion and solidarity, because each of the Members that took the floor to ask questions or offer comments and suggestions did so in the best interest of the country reviewed and the system as a whole.

5.50. For its part, the country under review hears the different perspectives from which its situation is viewed and is rewarded by an objective and cooperative analysis of its strengths, shortcomings and opportunities.

5.51. In my opinion, this system of periodic review is one of the fundamental pillars of the WTO. And since a Member's trade policy is not conducted in a vacuum but reflects a series of institutional, historical and contextual factors, as well as the country's aspirations and day-to-day practices, it is not limited to figures and regulatory frameworks, which are of course very important, but it provides a comprehensive insight into a country's actual circumstances. We can see this from the reports and from the statements made by the authorities and the other Members.

5.52. I wish to express my appreciation for the statements made a little while ago by the delegation of Paraguay, which gave us extensive and substantial replies to some of the questions and comments from Members. I also welcome the new background information that the delegation has just provided. My thanks go to the Vice-Minister for the useful additional details received concerning the reforms, public debt, social policies, customs procedures, intellectual property rights, environmental issues, and certain trade policy measures that have been of concern to Members.

5.53. Overall, the delegations have remarked positively on the progress achieved, the reforms and programmes instituted by the Government, the latter's commitment to the multilateral system, and the country's wellbeing. Some of the features highlighted were: (i) Paraguay' favourable macroeconomic data; (ii) its leading exports of clean and renewable energy and its agricultural exports; (iii) its situation as a landlocked country working on its economic integration; (iv) its efforts to improve connectivity; (v) its role in MERCOSUR; (vi) its valuable contribution to negotiating groups in the WTO, such as the Cairns Group and the G-20; (vii) its strategy to combat poverty and social inequalities under the Paraguay 2030 Development Plan; (viii) its commitment to women's empowerment; and (ix) its leadership and engagement with respect to trade facilitation, a feature almost unanimously singled out by Members as clear proof of the country's commitment to the multilateral system.

5.54. I could go on listing topics but have limited myself to a selection of the comments offered.

5.55. There were also concerns and requests for clarification in areas of particular interest to some Members, such as: (i) continuing to implement reforms in order to diversify exports; (ii) improving infrastructure; (iii) limiting the introduction of import licences; (iv) adopting stronger intellectual property legislation in order to combat piracy; (v) bringing informal labour under control; and (vi) making further progress in overcoming corrupt practices and fostering institutional and cultural transparency as a basis for social coexistence.

5.56. An indication of Paraguay's commitment to and concern about social issues and its efforts to improve matters is the forthcoming organization in Asunción of the Ministerial Meeting on social protection, entitled "Towards Inclusive Social Protection Systems in Latin America and the Caribbean" and held under the auspices of the OECD Regional Programme for Latin America and the Caribbean. The agenda will be centered on adapting the region's social protection systems to the new challenges of globalization as well as the issues of ageing and digitalization that are re-shaping the world of work and challenging the traditional social policy model.

5.57. As we have seen, Paraguay is committed to rules-based free trade, and I am sure that it will continue addressing both the existing challenges and any new ones that lie ahead in order to advance on its path to development.

5.58. I am confident that all the reforms introduced during the review period will continue to strengthen Paraguay's institutional framework, its economy and its social and environmental development. I have no doubt that when the time comes for the fifth review of its trade policies,

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5.59. Mr Chairman, Vice-Ministers, members of the Paraguayan delegation, it only remains for me to encourage the country to maintain its constructive spirit and its contribution and inputs to this Organization.

5.60. Che aguijevete ndéve11 (Thank you very much).

EUROPEAN UNION

5.61. Let me first thank the delegation of Paraguay for the comprehensive overview presented last Wednesday as well as this morning of the main developments occurred during the review period.

5.62. The EU is pleased to note that this review has been very useful for better understanding the trade policy of Paraguay and we hope that Paraguay will duly take into account some of the few challenges highlighted by Members.

5.63. The EU also very much appreciates the timely replies provided to the EU questions in advance of this meeting. We have submitted as already noted one follow-up question regarding the "Representation" Law 194/1993 and we hope to receive the reply in due course.

5.64. In conclusion, the EU thanks the delegation of Paraguay for its very constructive participation in this exercise.

UNITED STATES

5.65. The United States would like to thank the delegation of Paraguay for answers to our previously submitted written questions, and to sincerely express our appreciation for the constructive work that went into the TPR process and to overall preparation by everyone, including the Secretariat, for this Trade Policy Review. Thank you as well to the Honourable Minister Avalos for his statement this morning addressing issues raised on day one of the TPR and Ambassador Casanueva for his very capable insights as discussant.

5.66. The United States very much appreciates its relationship with Paraguay in trade and beyond, and we place great importance on our collaboration with Ambassador Aguirre and his team here at the WTO. We have been following with very great interest news of economic growth, reform, and challenges faced in the country and we applaud efforts to improve education and innovation, the business environment and investment climate, improve transparency, and reduce inefficiencies in bureaucracy. The United States is enthusiastic about a number of cooperative efforts to protect sustainable development, increase security, and develop commercial and cultural connections.

5.67. We have submitted also three follow-up questions through the Secretariat this morning; those questions concern tariff line situations where the applied rate exceeds Paraguay's bound rate, the VAT exemption, and intellectual property in the volume of copyright registration cases. We look forward to receiving answers to those questions in due course.

5.68. We note with particular interest certain issues raised in this morning's statements.

5.69. We would respectfully urge the Government of Paraguay to address outstanding WTO notifications here at the WTO, and has mentioned on day one of the Review, to conclude its regulatory review of the U.S. food safety system and to further work on enforcement and protection of intellectual property rights. In addition, we would encourage the Government to continue improving its transportation infrastructure, diversifying exports, and thoughtfully attracting increased foreign investment.

11 Text in Guaraní as it is pronounced.

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5.70. The United States looks forward to continued active cooperation with Paraguay as a valued partner here in Geneva and elsewhere, and trust that everyone holds the TPR as a valuable exercise.

5.71. Please accept our best regards and our wish for safe travels to those returning to capital.

H.E. AMBASSADOR LUIS FERNANDO ÁVALOS (HEAD OF DELEGATION)

5.72. As regards the very few statements delivered today, namely those of the European Union and the United States, I reiterate our particular interest in the issues raised for consideration. Our country regards both the European Union and the United States as very important partners and allies with whom we pursue our agenda in a very special way through mixed commissions and periodic meetings, in the case of the United States, even through special agreements such as the memorandum of understanding on intellectual property, with which we are rigorously complying so as to focus a little more on developing this area at the bilateral level, both with the European Union and with the United States. We do, however, take note of their comments on this second day.

5.73. It only remains for me to thank the delegations whose presence has borne witness to their interest in the conduct of our economy and trade as well as our compliance with the WTO rules. Many thanks to each of these countries for their questions and participation in this fourth review, to the WTO Secretariat for preparing this meeting with considerable care and attention to detail, to you, Mr Chairman, to our discussant, the Ambassador of Chile, and lastly to our Permanent Mission here in Geneva for its support in cutting our task to the minimum. Please allow me a few more words of thanks to the delegation that accompanied us, made up of representatives of Paraguayan government institutions and other entities, such as the Ministry of Industry and Trade, the Ministry of Finance, the Directorate-General of Customs, the Central Bank of Paraguay, and to other bodies for their active cooperation, within their respective spheres of competence, in preparing the replies to Members' questions.

5.74. We are very satisfied with this review. The burden is certainly a heavy one but at the same time it represents an opportunity, since it prompts us to commit to forging ahead on this upward economic and social path, which will undoubtedly make us even more successful in running our country, so many grateful thanks to all.

5.75. Thank you.

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6 CONCLUDING REMARKS BY THE CHAIRPERSON

6.1. This fourth Trade Policy Review has provided us with the opportunity to deepen our understanding of Paraguay's trade and investment policies, and in particular, of the several reforms and changes introduced since the last Review in 2011. I would like to thank the Paraguayan delegation led by Ambassador Luis Fernando Ávalos, Vice-Minister of Foreign Affairs and Integration, for their constructive engagement throughout this exercise. I would also like to thank our discussant, Ambassador Héctor Casanueva of Chile, for his interesting and thought-provoking remarks, as well as the 27 delegations which have taken the floor the first day, for their active participation in this review.

6.2. Paraguay was commended for its commitment to trade liberalization and for achieving sustained growth during the review period, with real GDP expanding at an annual average rate of 4.7% between 2011 and 2017, while maintaining a relatively low level of inflation, a current account surplus and a high level of foreign exchange reserves. Members also praised Paraguay for the fiscal rule implemented under its Fiscal Responsibility Law of 2013 and encouraged it to continue on this path in order to consolidate sustainable growth. Members were also appreciative of Paraguay's National Development Plan 2030, which aims at poverty alleviation, social development and economic growth, and integration into the world economy. Members highlighted that Paraguay is among the world's ten largest exporters of soybeans, meat and electrical power. However, they also noted that trade continues to be concentrated in a few trading partners and products, and encouraged Paraguay to continue to seek the diversification of its export base to mitigate vulnerabilities to potential external shocks.

6.3. Members acknowledged Paraguay's strong commitment to the multilateral trading system and its active participation in the WTO. In particular, they praised its leadership as coordinator of the Group of Landlocked Countries and its valuable contribution to the negotiation of the Trade Facilitation Agreement and to the Negotiations on Agriculture. While been commended for having ratified the Trade Facilitation Agreement in March 2016, Paraguay was invited to submit its list of pending commitments under the agreement. I have taken note of Paraguay's commitment to submit them by the end of the year. Paraguay was also invited to accept the Protocol of Amendment to the TRIPS Agreement. Some Members also encouraged Paraguay to put up to date its notifications in areas such as domestic support in agriculture, import licensing, and customs valuation. I have also taken note of Paraguay's commitment to update its notifications. With respect to regional integration and trade agreements, some Members highlighted Paraguay's participation in MERCOSUR through which it is currently holding trade negotiations with a number of trading partners.

6.4. Regarding trade facilitation, Members noted the progress made by Paraguay with respect to the adoption of a risk management system, the introduction of an Approved Economic Operator programme and the digitalization of customs documents. They expressed interest to further their information about other measures Paraguay intends to take to facilitate trade, including the use of digital certificates of origin and the use of the Single Window for imports. Several Members commended Paraguay for the adoption of its recent E-commerce Law.

6.5. Members expressed their appreciation for the recent measures adopted by Paraguay aimed at improving the business environment and attracting investment, in particular the Law on Public- Private Partnership, the Investment Protection Law, and the Law on Public Works, which were seen as providing new opportunities for foreign direct investment. Appreciation was also expressed with respect to the new Law on Small and Medium Enterprises and regarding Paraguay's acceptance to the OECD's Global Forum on Transparency and Exchange of Information for Tax Purposes. However, some Members were of the view that further regulatory reforms would improve Paraguay's business environment and help address informality.

6.6. Members appreciated that Paraguay has an open trade regime with a relatively low applied average MFN tariff of 8.4% in 2017. Nevertheless, some Members expressed concern with respect to the fact that for some 80 tariff lines the applied rate exceeded the bound rate. Paraguay has explained in the course of this TPR that in accordance with national legislation, the WTO bound rate is applied in these cases.

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6.7. Paraguay was commended for making limited use of non-tariff measures. Members noted, however, that there were certain areas where improvements could be made, including with respect to some SPS restrictions and the use of non-automatic import licences for certain products, such as textiles and clothing, footwear, cement, agrochemicals and cell phones. Some Members expressed concerns over the use of reference values for imports of clothing products and requested information on plans to eliminate them. Paraguay replied that this was a temporary, precautionary measure. Some Members also expressed concern about the use of other duties and charges on imports, in particular of consular fees.

6.8. Members commended Paraguay for having implemented competition policy legislation and having created a competition authority. They raised questions on a number of issues related to the new legislation, including its scope and application, the review of mergers and acquisitions and its relationship with MERCOSUR legislation on the area.

6.9. Noting that Paraguay maintains several incentives programmes, including a National Automotive Programme, some Members enquired about the reasons for not notifying them to the WTO. Paraguay has explained that it had recently updated its subsidies notification and that it considered that the incentives it grants are not subsidies in the terms established in the Subsidies and Countervailing Measures Agreement. Members acknowledged the changes introduced by Paraguay to its legislation on government procurement to enhance transparency. Some Members encouraged Paraguay to make more use of international tendering procedures; others invited it to become a party to the GPA.

6.10. Members commended Paraguay for the improvement achieved in the enforcement and protection of intellectual property rights (IPRs) since the last review, mainly through the introduction of legislation, the creation of the Intellectual Property National Office (DINAPI) and the introduction of a National Intellectual Property Plan. However, some Members were of the view that more work is needed to tackle remaining enforcement concerns, including with respect to the protection of patents, copyright and trademarks, as well as of undisclosed test results or other data. In this respect, Paraguay acknowledged that further efforts were required and expressed hopes that the strengthening of the intellectual property system would become a tool to promote economic development.

6.11. Members noted Paraguay's role as a major producer and exporter of electricity. In this respect, Paraguay was praised for being at the forefront of the production and exportation of renewable energy. Members commended Paraguay for maintaining an open services regime, with virtually no restrictions on foreign investment. They raised specific questions regarding: cross- border trade in services, including in insurance services; national treatment for foreign banks; the supervision, regulation and resilience of the financial system; market access in telecommunications; access for foreign broadband service suppliers; and incentives granted to the tourism sector, among others.

6.12. Paraguay has provided answers to the more than 150 advance written questions raised by Members. This TPR will be successfully concluded once Paraguay has replied to all outstanding questions that emerged during the meeting in a month's time. I believe Members will feel encouraged by the reforms undertaken, the good results achieved and the action plans outlined in Paraguay's presentation to deal with the remaining challenges. I hope that the discussion held during this review will prove useful to Paraguay in the continued implementation of economic and trade reforms and in its pursuit of policies to achieve sustainable growth and increase competitiveness.

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