Analysis: Between Taiwan and Chinese vaccines; predicament for Paraguay

RIO DE JANEIRO, BRAZIL – After the triumph of the Chinese Communist Party led by Mao Zedong in the 1949 Civil War, the nationalist side led by Chiang Kai-shek retreated to the island of Taiwan (south), from where the Republic of China was established in defiance of the recently formed People’s Republic.

More than seven decades have passed since the establishment of the People’s Republic of China and yet the diplomatic struggle between the Asian giant and the small island of Taiwan for international recognition has not ceased. Both claim not only the territory of the other, but also to be the legitimate republic of China.

In South America, this tension can be found in Paraguay, one of the 14 states in the world that recognizes and maintains diplomatic relations with Taiwan and, therefore, does not recognize the People’s Republic of China. It is the only country in South America holding this status but not the only one in Latin America, since Central America’s Guatemala, Haiti and Honduras – whose future government announced that it would initiate contacts with China – also do.

WHY TAIWAN?

International Relations graduate and Paraguayan foreign policy specialist Julieta Heduvan explained that Paraguay’s diplomatic path should be considered in the context of the Cold War, where the openly declared anti-communism of Paraguayan dictator Alfredo Stroessner (1954-1989) tipped the scales towards Taipei over Beijing.

Although Lugo established as one of his campaign pillars to change the relationship, he did not find a very propitious moment at the international level. “At that time there was a kind of truce between China and Taiwan, in which they agreed in some way not to modify or ‘steal’ allies,” she said.

In geopolitical terms, it is still very convenient for Paraguay to have Taiwan as an ally, considering also that the United States is one of its main partners.

TRADE AND GLOBAL POSITIONING, WHAT DOES PARAGUAY LOSE?

The paradox is that, in terms of trade, there are no impediments to imports of any kind from China. The problem for Paraguayans lies in the loss of a giant destination market for its main export products: soybeans and beef.

The trade flow is not affected by this lack of recognition, but the greatest loss is in infrastructure, in the context of regional and far-reaching projects. “Like Argentina has, for example, with nuclear power plants and dams. The Silk Road itself, are projects where Paraguay is left out,” Heduvan pointed out.

“Taiwan has never had such large projects, but it provided Paraguay with economic assistance on a smaller scale. China’s many more resources and capabilities are the main difference, because Taiwan, despite being a rich state compared to Paraguay, does not have the same resources as China, and this is a limitation much more noticeable now than before,” she said.

Politically, there are several issues affected by the lack of recognition of China, such as in MERCOSUR, which has become an obstacle to the signing of free trade agreements with the Asian giant promoted by Argentina and Brazil.

The Covid-19 pandemic created a new context in which Paraguay felt the consequences of its foreign policy.

“The relationship between Paraguay and Taiwan is very much based on economic aid and cooperation, but when the vaccines became available, a major conflict arose because Taiwan was a vaccine client and China was a producer. This lack of social and political recognition played a major role, when China began its ‘vaccine diplomacy’ in the region and Paraguay had no way of supplying itself,” Heduvan said.

PANDEMIC AFTERMATH: IS TAIWAN WORTH IT?

In a difficult pandemic context for Paraguay, the absence of diplomatic relations with China resulted in a lack of access to vaccines, which led to complaints and social protests in a conservative society. “It was the first time, perhaps, that society began to really ask itself if a change in recognition was worth making,” the expert said.

“There is still this idea in society that change means supporting a dictatorship, and this is used politically. Although there are sectors of the opposition that communicate with China and every now and then mention the possibility of changing the recognition, Paraguayan society is very conservative and I think it is very difficult for this to occur while the [Colorado Party] government is in power,” the expert in Paraguayan foreign policy emphasized.

With the U.S. as one of its main allies, it is very difficult for Paraguay to propose a change of recognition, even more so with the escalation of the Washington-Beijing conflict.

“If there is an opportunity to change this recognition, it will be through a change of government which could propose a new relationship with the United States from scratch, and which would prevent so much criticism,” Heduvan replied.

THREE-WAY NEGOTIATIONS, PARAGUAY’S RESOURCE

With no direct negotiations with China, the vaccines against Covid-19 finally reached Paraguay through three-way negotiations with countries that had vaccines and decided to donate part of them to the country. This occurred with Chile, Colombia and, through CONMEBOL (South American Football Confederation), with Uruguay. In these cases, the countries delivered vaccine doses from Sinovac laboratory.

The Paraguayan government also made agreements to secure the Sinopharm vaccine: it received 40,000 doses through the Covax international mechanism and 250,000 doses through the United Arab Emirates. In fact, the Paraguayan government signed a contract to acquire 1 million of these vaccines, but Sinopharm’s subsidiary in Abu Dhabi terminated the contract without further explanation.

“The contract was terminated without any explanation, with the Minister of Health arguing that it was politically motivated,” Heduvan recalled.

“There are still Chinese vaccines in Paraguay. The fact that they were unable to negotiate directly was not an impediment, they had to come through three-way negotiations, but that does not mean that they didn’t come,” Heduvan said.