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Investigación Agraria

On-line version ISSN 2305-0683

Abstract

ENCISO CANO, Víctor Ramón. Paraguay–EU bilateral trade: A description with trade indicators. Investig. Agrar. [online]. 2011, vol.13, n.1, pp.53-60. ISSN 2305-0683.

The negotiation of a Free Trade Agreement between EU and MERCOSUR has been the subject of several studies in both Europe and the Americas and joint institutions on both continents. However, today (May 2011) there are only two studies on the impact of the agreement on the economy of Paraguay. Hence the overall objective is to analyze the evolution of trade between Paraguay and the EU during 2000-2006, before the start of the financial crisis. More specifically, by using trade indicators the paper aims to identify the intensity of bilateral trade flows and trade complementarity between Paraguay and the EU. The results show that the relative decrease of Paraguayan exports to the EU in relation to this block imports from around the world (net of Paraguay), was not caused by the mismatch between supply and demand but due other factors. Trade between Paraguay and the EU reflects the comparative advantages with extreme specialization where there has been no intra-sectoral trade. The trade pattern between the parties has remained constant, so that, in general, it can be said that the composition of trade structure has not changed, but a strong specialization of Paraguay in the agri-food trade in goods has taken place over the past decade.

Keywords : Paraguay; European Unión; trade intensity index; trade complementarity index; intra industry trade index.

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