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Mercosur and Paraguay's trade agreements: preferences, origin rules, the EU and Singapore deals

Argentina. For full detail on Argentina, go to The Argentine Thread.

Last verified: 2026-10-28 · Status: Changing

Paraguay trades inside the Mercosur customs union with Argentina, Brazil and Uruguay, applying the common external tariff to third countries and Mercosur's network of agreements with Chile, Bolivia, Peru, Colombia, Israel, Egypt, India, SACU and others. The Mercosur Singapore FTA took effect for Paraguay on 1 February 2026, and the Mercosur EU agreement signed in Asunción on 17 January 2026 is listed by MIC as in force from 1 May, with Paraguay specific quotas for biodiesel, organic sugar and pork. Preferences only apply with proof of origin, which customs can check after release.

USD figures use PYG 5,868.31 per US dollar, the Banco Central del Paraguay reference quotation in the planilla of 28 October 2026. Conversions are for orientation only.

Key facts

Customs union membershipMercosur (Argentina, Brazil, Paraguay, Uruguay), common external tariff Tratado de Asunción art. 1, as of 2026-10-28 · in force
Trade framework with ArgentinaMercosur free movement of goods and common external tariff Tratado de Asunción art. 1, as of 2026-10-28 · in force
Mercosur EU interim trade agreementSigned 17 Jan 2026; in force from 1 May 2026 per MIC MIC agreement sheet, as of 2026-10-28 · in force
Mercosur Singapore FTA in force for Paraguay2026-02-01 dateLey 7522/2025; MIC Circular 001/2026, as of 2026-10-28 · in force
Paraguay biodiesel quota in the EU at 0 percent50000 tonnesMIC agreement sheet, as of 2026-10-28 · in force
Paraguay exclusive organic sugar quota in the EU at 0 percent10000 tonnes per yearMIC agreement sheet, as of 2026-10-28 · in force

The rule

1. Mercosur customs union. Paraguay, Argentina, Brazil and Uruguay agreed in the Treaty of Asunción to form the Mercado Común del Sur, with free movement of goods, services and factors among the members, a common external tariff and a common trade policy toward third countries. Paraguay's customs duty is the tariff rate applied to the customs value, and trade agreement preferences apply where the goods qualify.Tratado de Asunción (Tratado para la Constitución de un Mercado Común), Art. 1, 1991-03-26 official text · verified 2026-10-28
2. Origin rules decide preferences. Customs applies the origin rules of the agreements Paraguay has signed to decide preferential and non preferential treatment, and verifying origin is DNIT's exclusive competence. A certificate of origin is required, but for small shipments up to a value set by regulation an importer's declaration can replace it. Goods from Paraguayan free zones entering the country pay import duty unless they meet the origin rules.Ley Nº 2422/2004 Código Aduanero; Ley Nº 523/1995, Code art. 256, 258 to 260; Ley 523 art. 20, 2004-07-30 official text · verified 2026-10-28
3. Network of agreements listed by the Ministry of Industry and Commerce. MIC publishes a sheet for each agreement in force for Paraguay, with the approving norm and year: Mercosur ACE 18 (since 1991), Chile ACE 35 (1996), Bolivia ACE 36 (1997), Peru ACE 58 (2006), Andean Community ACE 59 (2005), Colombia ACE 72 (2019), Mexico ACE 55 automotive (2011) and AAP.R 38 (1994), Israel (2010), Egypt (2017), India (2009), Southern African Customs Union (2016) and the bilateral economic cooperation agreement with Taiwan (2017). Each sheet says the benefit requires meeting the agreement's specific origin rules.Ministry of Industry and Commerce agreement sheets, Each agreement and its approving norm, 2025-10-04 official text · verified 2026-10-28
4. Mercosur Singapore free trade agreement. Signed on 7 December 2023, covering goods and services trade, investment, government procurement and intellectual property, approved by Ley 7522/2025 (promulgated 11 September 2025). MIC Circular 001/2026 of 19 January 2026 announced its entry into force for Paraguay and Singapore on 1 February 2026, with its own certificate of origin form.Ley Nº 7522/2025; Circular VMCS/DGCE/DOCE Nº 001/2026 (MIC), Whole law; circular, 2025-09-11 official text · verified 2026-10-28 · changed: In force for Paraguay and Singapore from 1 February 2026 (MIC Circular 001/2026).
5. Mercosur European Union agreement. Signed in Asunción on 17 January 2026. According to the MIC sheet it is in force from 1 May, with self certification of origin from the sixth year after entry into force, more flexible origin rules (including up to 55 percent non originating inputs for auto parts during an extended period of up to eight years), exclusion of river transport services and preserved procurement policy space. Paraguay obtained specific treatment: an exclusive organic sugar quota of 10,000 tonnes a year at 0 percent in quota, a 50,000 tonne biodiesel quota at 0 percent from entry into force and an extra 1,500 tonnes within the Mercosur pork quota.Acuerdo de Asociación Mercosur Unión Europea (MIC sheet), Sheet sections 1, 4 and 6, 2026-01-17 official text · verified 2026-10-28 · changed: Signed 17 January 2026; MIC lists it as in force from 1 May 2026 (sheet published April 2026).
6. Certificates of origin for Paraguayan exports. The Ministry of Industry and Commerce issues certificates of origin under the conditions set by the Executive, without discrimination between products made in the customs territory.Ley Nº 523/1995 Que autoriza y establece el régimen de zonas francas, Art. 46, 1995-01-16 official text · verified 2026-10-28
PartnerInstrumentIn force for ParaguayScopeApproving norm or reference
Mercosur (Argentina, Brazil, Uruguay)ACE 18, ALADISince 1991Intra zone preferences; automotive and sugar sectors excluded per MICACE 18
ChileACE 35Since 1996Whole tariff universeACE 35
BoliviaACE 36Since 1997Whole tariff universeACE 36
PeruACE 58Since 2006Free trade areaACE 58
Andean CommunityACE 59Since 2005Free trade areaACE 59
ColombiaACE 72Since 2019Free trade areaACE 72
MexicoACE 55 automotive; AAP.R 382011 (ACE 55); 1994 (AAP.R 38)Sectoral and partial scopeACE 55, AAP.R 38
IsraelFTAFor Paraguay since 2010Free tradeLey 3.857/10
EgyptFTAFor Paraguay since 2017Free tradeLey 5.563/16
IndiaPreferential trade agreementSince 2009Partial preferencesLey 3.317/07
Southern African Customs UnionPreferential trade agreementFor Paraguay since 2016Preferences on 1,064 linesLey 4.560/12
SingaporeFTAFor Paraguay since 1 Feb 2026Goods, services, investment, procurement, IPLey 7522/2025
European UnionInterim trade agreement under the Partnership AgreementSigned 17 Jan 2026, in force from 1 May 2026 per MICTariff elimination with Paraguay specific quotasMIC sheet
TaiwanEconomic cooperation agreement (bilateral)Since 2017Cooperation and investment facilitationLey 5932/17

Trade agreements in force for Paraguay as listed by the Ministry of Industry and Commerce (October 2025 and 2026 sheets)

Worked example

  • A Paraguayan biodiesel exporter selling to the EU can ship within Paraguay's 50,000 tonne quota at 0 percent duty from entry into force, provided the product meets the agreement's origin rules (Annex 3) and is documented with the required proof of origin.
  • A Paraguayan importer bringing machinery from Argentina pays the intra Mercosur preference on goods that qualify under Mercosur origin rules with a certificate of origin; without it, the common external tariff applies. For the Argentine side of the same shipment see The Argentine Thread guide.

Step by step

  1. 1. Classify the product in the Mercosur common nomenclature and find the preference under each relevant agreement.
  2. 2. Check the agreement's specific origin rule and gather supplier cost and process data to prove origin.
  3. 3. Request the certificate of origin from the Ministry of Industry and Commerce for exports (Ley 523 art. 46) and obtain the supplier's certificate for imports (Code art. 258 to 260).
  4. 4. For the EU and Singapore, use the agreement's own origin form or procedure announced by MIC.
  5. 5. Keep origin evidence for at least five years for customs post clearance checks (Code art. 51 and 126).

Common traps

  • No preference without origin: a missing or defective certificate means the full tariff applies, and customs can review origin after release (Code art. 126 and 258).
  • Intra Mercosur free trade does not cover everything: MIC notes the automotive and sugar sectors are outside the ACE 18 preference.
  • Mercosur negotiates external agreements as a bloc; entry into force can differ by member, as with Singapore (Paraguay from 1 February 2026).
  • The DNIT list of double tax agreements (Chile, Taiwan, UAE, Uruguay, Qatar and transport only agreements) has no comprehensive income tax treaty with Argentina; trade preferences do not change income tax on cross border profits.

Sources

Related pages

Related: Paraguay country profile · live dashboard · central bank and release calendar · our posts on X · where Argentina is involved, see The Argentine Thread guide

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