Paraguay is a founding member of the Mercosur common market, formed in 1991. Mercosur’s full members are Argentina, Brazil, Paraguay, and Uruguay.
Mercosur’s Common External Tariff (CET) averages 11.5 percent and ranges from zero to 35 percent ad valorem, with a limited number of country-specific exceptions. Paraguay’s average bound tariff rate in the WTO is significantly higher at 33.5 percent. Paraguay’s applied import tariffs tend to be much lower than the CET, ranging from zero to 30 percent, with an average applied tariff rate of 10.1 percent. Paraguay is permitted to maintain a list of 649 exceptions to the CET until December 31, 2023.
According to current Mercosur procedures, any good imported into any member country must pay the CET to that country’s customs authorities. If the product is re-exported to any other Mercosur country, the CET must be paid again to the second country upon importation there. Thus, for any U.S. good imported into landlocked Paraguay via any other Mercosur country, all of which have ocean ports, the CET is effectively doubled.