Paraguay open to China trade, but says Taiwan ties are non-negotiable

Paraguay is open to trade with China as long as it does not have to sever ties with Taiwan, its foreign minister said Tuesday.

Leaders of the South American Mercosur bloc are meeting in Paraguay to launch trade negotiations with Japan following the sealing of a deal with the European Union in January.

During the summit, Brazilian President Luiz Inacio Lula da Silva suggested that talks with China were also in the pipeline.

Paraguay, Taiwan's lone South American ally, is the only Mercosur member that does not maintain diplomatic relations with the Asian giant.

"Paraguay does not refuse to establish trade relations with China, as long as there are no conditions regarding the diplomatic relationship that Paraguay has and maintains with Taiwan," Foreign Minister Ruben Ramirez said at the meeting on the outskirts of Asuncion.

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"If those are the conditions, we have no restrictions," Ramirez said.

Taipei has only 12 diplomatic allies after Beijing -- which claims Taiwan is part of its territory -- systematically poached the others in a bid to isolate the self-governed island.

China has urged Paraguay "make the right choice" and cut ties with Taiwan.

The summit in Asuncion also saw Paraguayan President Santiago Pena criticize the "bitter taste" left by the EU-Mercosur deal.

Twenty-five years in the making, the agreement created one of the world's biggest free-trade zones.

"The playing field is not level for everyone," Pena said, suggesting that his country felt slighted by the accord's export quotas, which it believes favors other members of the bloc.

Under the deal, the European Union offers Mercosur import quotas with tariff benefits, leaving the bloc to decide how to distribute them among its partners.

Pena has called for quotas to be shared equally between Mercosur's partners before the EU ratifies the deal, calling it a "question of justice."

"If Mercosur wants to be credible outwardly, it first has to be fair inwardly," he added.

Brazil's Luiz Inacio Lula Da Silva, Bolivia's Rodrigo Paz and Uruguay's Yamandu Orsi attended the meeting, as did leaders of associate countries Chile and Ecuador.

Argentine President Javier Milei, whose country also belongs to the bloc, cancelled his attendance as he was grappling with the domestic fallout of his top governmental aide's resignation.

(Except for the headline this story has not been edited by Firstpost staff.)