The United States established diplomatic relations with Paraguay in 1861, approximately fifty years after Paraguay declared independence from Spain. Post-independence, Paraguay experienced a mix of coups, civil war, and dictatorships, with a more recent transition to civilian leadership and democratic elections. The United States supports the consolidation of Paraguay’s democracy and continued economic reform—the cornerstones of cooperation among countries in the hemisphere.
U.S. Assistance to Paraguay
The U.S. Government aids the Government of Paraguay in stemming corruption, creating jobs, reducing rural poverty, and countering international criminal organizations operating in the country. A particular emphasis is placed on supporting vulnerable groups such as women, girls, indigenous peoples, and youth. U.S. assistance is aimed at improving the stability and security of Paraguay by strengthening democratic institutions and the rule of law, increasing economic opportunities, encouraging a more efficient business environment, and institutionalizing democratic reforms.
Bilateral Economic Relations
Paraguay has a small but rapidly growing open economy with a strong macroeconomic position and the potential for continued growth over the next decade. Major drivers of economic growth in Paraguay are the agriculture, retail, and construction sectors. There is a large subsistence sector and a large underground re-export sector, including the import of goods from Asia and the United States for re-export to neighboring countries. U.S.-Paraguay goods trade was $2.7 billion in 2017. U.S. exports to Paraguay include machinery, agricultural equipment, mineral fuels, toys, and sporting goods. U.S. imports from Paraguay include sugar, food oils, animal products, and wood products.