Paraguay a key gateway for Vietnamese exports to Mercosur
VOV.VN - Paraguay is seen as an important gateway for Vietnamese goods to enter the Mercosur market, offering ample room to expand market share as negotiations on a Preferential Trade Agreement (PTA) move forward.
Strong growth potential
According to the Vietnam Customs, two-way trade between Vietnam and Paraguay rose from US$73.81 million in 2021 to US$211.02 million in 2025, showing a significant expansion in bilateral trade over the period.
Total trade reached US$211.02 million in 2025, down 9.5% from 2024, mainly due to a decline in Vietnam's imports from Paraguay. The Southeast Asian nation’s exports, however, maintained solid growth, rising 13.9% to US$131.55 million.
Industrial products continued to play a leading role in Vietnam's exports to Paraguay. Exports of electrical and electronic machinery, equipment and components hit US$15.88 million in 2025, while footwear exports totalled US$26.24 million, remaining one of Vietnam's most competitive product groups thanks to consistent quality, diverse designs and competitive prices. Mechanical machinery, textiles and garments, rubber and plastic products, and optical equipment also provide considerable room for expansion.
According to the Vietnam Trade Office in Argentina, which also covers Uruguay and Paraguay, Paraguay is one of South America's most consistently growing economies, maintaining annual GDP growth of around 3.5-4%. Inflation has remained below the 4% target, while the Paraguayan guaraní has remained relatively stable compared with the currencies of many countries in the region.
With limited manufacturing capacity, Paraguay imports more than 80% of its demand for machinery, equipment, industrial products and consumer goods. The country's annual imports totalled between US$17.2 billion and US$19.1 billion in 2024-2025.
The trade office estimates that Vietnamese goods currently account for only about 1% of Paraguay's total imports, suggesting substantial room to expand market share. In addition to traditional export products, smart home appliances, construction materials, electric motorcycles, vehicle tyres, ceramic tiles, construction glass and energy-efficient equipment all have strong growth potential.
Opportunities ahead
Paraguay is accelerating investment in infrastructure, urban development and housing construction, boosting demand for steel, construction materials, electrical equipment and machinery. At the same time, high internet and smartphone penetration in major cities such as Asunción and Ciudad del Este is boosting demand for consumer electronics, smart home appliances and technology products.
The country's abundant hydropower resources and efforts to promote green transport also present opportunities for Vietnamese companies to expand exports of electric motorcycles and energy-efficient technologies.
The biggest opportunity lies in ongoing negotiations on a Preferential Trade Agreement between Vietnam and Mercosur. If the agreement is signed, Mercosur's common external tariff, which currently ranges from 10% to 35%, would be gradually reduced, giving Vietnamese goods a stronger competitive edge. Paraguay could also serve as a springboard for Vietnamese exports to expand across the wider Mercosur market rather than serving only domestic demand in the country.
Challenges and outlook
Despite the opportunities, exports to Paraguay continue to face several challenges. The geographical distance keeps logistics and ocean freight costs high, while international developments, particularly in the Middle East, continue to put pressure on shipping costs and delivery times.
Paraguay is also a price-sensitive market. The absence of a trade agreement between Vietnam and Mercosur means many Vietnamese products remain subject to relatively high import tariffs, affecting their price competitiveness. Vietnamese businesses also face difficulties due to the lack of bonded warehouses, local distribution networks and limited Spanish-language capabilities.
According to the trade office, export prospects can be divided into two phases. During 2026-2028, exports are projected to grow by around 5-7% annually, depending largely on global logistics conditions and geopolitical developments. Between 2028 and 2030, once the PTA takes effect, Vietnam's exports are expected to grow by 15-20% a year, supported by tariff advantages and deeper access to the Mercosur market.
To capitalise on these opportunities, the trade office recommends speeding up PTA negotiations, improving payment cooperation mechanisms, and expanding cooperation on quarantine procedures and technical standards. Businesses are also incentivized to invest in logistics systems, strengthen their presence at major trade fairs in Paraguay, develop Spanish-language branding and promotional materials, and build complementary commercial partnerships with local companies.
These measures will provide an important foundation for Vietnamese goods to increase their market share in Paraguay and gradually expand across South America.
Paraguay, Vietnam reinforce friendship and cooperation
VOV.VN - Vietnam always attaches importance to its relations with Paraguay, a key partner in Latin America and a member of the Southern Common Market (Mercosur), Vietnamese Ambassador to Argentina, concurrently accredited to Paraguay and Uruguay, Ngo Minh Nguyet has said.
