While many governments trade principles for quick money, Paraguay is choosing a harder path. It is the only country in South America that still recognizes Taiwan instead of China, and that decision now comes with both new opportunities and heavy pressure.
Taiwan sees Paraguay as more than a friendly flag at the United Nations. In Taipei, Foreign Minister Lin Chia-lung met Paraguayan deputy foreign minister Víctor Alfredo Verdún Bitar under a “Project of Prosperity of the Diplomatic Allies.”
The goal is to turn a long diplomatic friendship into a serious investment and technology partnership so that any future government in Asunción will think twice before walking away.
The plan focuses on smart farming, new energy, carbon markets and public health. Taiwan brings capital, know-how and access to Asian value chains; Paraguay offers land, food exports and a doorway into South America.
A carbon-credit deal will let Taiwanese companies, which must start paying a carbon fee from 2026, buy credits from Paraguayan projects such as reforestation.
At the same time, a zero-tariff arrangement has helped turn Taiwan into one of Paraguay’s top buyers of beef and its main market for pork. Meat exports and trade between the two partners have more than doubled in the past year.
Behind these numbers sits a geopolitical tug-of-war. Beijing has courted Paraguay’s business and political elite, promising larger soybean and beef markets if the country drops Taiwan.
A Chinese envoy was expelled in 2024 after urging lawmakers to switch sides. For a small, export-driven farming nation, that kind of offer is tempting.
Paraguay’s current leadership is betting that predictable rules, long-term investment and like-minded partners will be worth more than quick deals with governments that use trade to buy silence.
President Santiago Peña has used his speech at the UN to defend Taiwan’s right to be present in international institutions, calling its exclusion an injustice.