EU-Mercosur Deal: Paraguay Eyes $420M in Industry

The signing of the trade agreement between the European Union and Mercosur could open a significant opportunity to attract new industries to Paraguayan territory. The information was originally published by ABC Color, based on a survey carried out by the Center for Economic Studies (CEE) of the Paraguayan Industrial Union (UIP).

The study uses the so-called RIAE 1.0 Model (Industrial Relocation by Efficiency Arbitrage), developed to estimate the volume of productive investment that could migrate to the country due to the relative advantages of operating costs and new conditions for access to international markets.

The impact of the RIAE 1.0 Model

The economic model analyzes variables such as labor, energy, tax, and logistics costs within the South American bloc region. According to the business association, the trade agreement has the potential to alter the strategic decisions of companies already operating in Mercosur and supplying the European market.

• Initial investment potential estimated at approximately $420.6 million.
• Concentration of new contributions focused mainly on the electrical-electronic and plastics sectors.
• Projection of generating nearly $738.5 million annually in production and exports from the new installed capacity.
• Expected direct impact on added value, job creation, and local remuneration.

Prospects for the business community

For investors and business owners following the Paraguayan production landscape, the projections indicate that the country's cost competitiveness remains on the radar of large regional corporations. The analysis reinforces the trend of relocating industrial plants in search of fiscal, energy, and logistical efficiency.

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