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Paraguay and the asymmetric integration in South America: what is

next? Crisis of Paraguay’s international relations in the MERCOSUR and UNASUR context

and its effects on negotiations with the European Union

Luis A. Fretes Carreras1

ABSTRACT

South America has been the seat of fast and widespread social, economic and political

change for several decades. Between the states, socioeconomic development and

consolidation of democracy are heterogeneous, and the constitutional forms and

productive systems are diverse, but they coincide in the importance of regional

integration.

Recently, some of them, like Brazil and Venezuela, have increased their “global”

dimension and reinforced their influence on multilateral organisms through a series of

alliances and strong international activism, using the power of their economic resources.

The visibility of these states is obvious and the contemporary superpowers – such as the

United States, China, Russia or Germany – have made huge efforts to rely on their

alliance and have a larger presence in their economies.

The formation of new regional blocs like the UNASUR and the CELAC under the

impulse of regional powers pressures more classical projects such as the MERCOSUR

and the CAN to review their objectives. The ALBA initiative lead by Hugo Chavez has

consolidated a deeply political and ideological alliance between states considered as

peripheral like Bolivia, Cuba, Ecuador, Venezuela and Nicaragua which is making the

MERCOSUR member states, particularly Argentina and Brazil, review and change their

external relations in the region, while keeping in mind that other reasons, at least as

important, also motivate this change. The recent formation of the Pacific Alliance is

becoming another instrument answering the need of integration, one with a seemingly

more economic concept, but which also incubates a response of the countries unaligned

with the ALBA and the MERCOSUR.

In this context, the smaller and less internationally influential states such as Paraguay,

Bolivia, and Ecuador, are submitted to intense internal shifts, of which the expectations

of regional integration and international recognition must contend with domestic

conflicts, consolidation of their democratic institutions, and guarantee social stability

just as it is the case with conflicts coming from the outside such as the financial crisis in

developed states and the emergence of regional hegemonic powers.

In this case, Paraguay maintains an ambiguous and distrusting position with regard to

regional integration, fruit of its history of armed conflicts with its neighbors, the

1 Luis A. Fretes Carreras. Lawyer (UNA-Paraguay 1989), Master in Politics (UNA-Paraguay 1993),

Diploma in Regional Development (ILPES / CEPAL - Chile 1995), Master in Political Action and Citizen

Participation in the State of Law (UFV-Spain 2004) . PhD in Politics (ICS / University of Lisbon –

Portugal 2010). Professor of Contemporary Politics and Director (on leave) of the Public Politic Center of

the Catholic University Nuestra Sra. De la Asunción. Current Ambassador of Paraguay in Portugal.

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difficulties typical to its Mediterranean condition and the inequality and poverty of its

inhabitants.

Paraguay’s negative support as to Venezuela’s fulltime membership in the

MERCOSUR just like the objections interposed to the Ushuaia II agreements in the area

of democratic protection of UNASUR constitute the most concrete proof confirming the

institutional differences and asymmetries that exist between the signatory states of these

multilateral integration agreements, which have resulted in a severe crisis of

international relations in South America following Paraguay’s suspension from these

bodies following the destitution of President Fernando Lugo in June 2012.

The objective of this speech is to point out – from the Paraguayan case in particular,

considering that it is a state of relative minor development and Mediterranean – the

importance of the geography, the history, the politico-institutional differences and the

social, cultural and economic asymmetries that exist in each state in the process of

integration and institutional consolidation of the MERCOSUR and UNASUR.

Key words: Regional Integration, MERCOSUR, UNASUR, Asymmetries, Paraguay.

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1. INTRODUCTION.

Historically, and particularly in the 20th century, the links between South American

states have suffered from very unsettle times, in which however, they shared projects of

economic development of large undertaking, which would markedly affect the economy

and society of these nations.

The advent of democracy, the development of supranational institutions such as

CARICOM, CAN, MERCOSUR have changed the commercial relations of the past, but

today other organizations are appearing, with the objective to implement actions in

order to overcome inequalities and poverty in the continent.

Nevertheless, despite good intentions, continue conflicts derived from the policies

of the past and disparate conditions between the parties that in the present are being

threatened by growing globalization. As an example of this kind of situation, the

experience of the Paraguayan Republic in the processes of integration in political and

regional economy in South America (MERCOSUR and UNASUR) will be presented.

This analysis could cooperate towards distinguishing the similarities and differences

with the integration process of the European Union and its implication in the negotiation

of a free trade agreement with the MERCOSUR.

In order to present the Paraguayan experience adequately, one must previously

explain its cultural, historical and geographical characteristics to be able to understand

the objectives of its external policy. In this sense, it is necessary to consider with

attention the geopolitical situation of Paraguay; that being a Mediterranean state without

a maritime littoral, it is exposed to vulnerabilities that imply complex challenges for the

success of its regional and global integration.

2. THE PARAGUAYAN REPUBLIC. CULTURE, GEOGRAPHY AND

HISTORY.

Paraguay (Para= All the colors; Gua= that run; Y= water) is located in the center-

south of the American continent, and with Bolivia is one of the only two South

American states without a maritime littoral. To its benefit, it has a vast network of

navigable rivers, two of them very plentiful (the rivers Paraguay and Parana) which

naturally connect it to the Atlantic Ocean.

It is a nation mostly identified with the millenary Guaraní culture and whose

population is a product of an intense ethnic and cultural mix. The geographical space of

influence, particularly the Guaraní language, extended to a vast territory that today is

part of four states. Although the Guarani language is today in common use in all strata

of society and has official status, the Hispanic European culture imposed itself in its

literature as well as in its institutions. A relevant point is the decision of its first

independent authorities to declare in 1813 the first Republic in South America inspired

from the Roman model and more importantly to maintain such condition unalterable for

200 years.

Presently, Paraguay is one of the smallest states in territory and with the least

population in South America. Its geographical limits and survival as a state were

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achieved with huge sacrifices and substantial loss of human life during three wars that

were among the bloodiest in Latin America between the 18th and 20th century. 2

2.1. Initial characteristics of its foreign politics relations

2.1.1. From the Independent Autonomy to subordination

The independence of Paraguay was from the Spanish Crown and also from the

Viceroyalty of Rio de la Plata, and particularly from the latter because it was the

institutional political entity that exercised its predominance and subordinated the

inhabitants of the Province. Paradoxically, the only battles that were fought, the battles

of Cerro Porteño and Tacuari, were fought against the Porteño army and not the Spanish

army as was the case with all the other American nations.

The relations with the Portuguese realm and then with the Empire of Brazil,

oscillated between friendship, trade and distrust. Nevertheless, the action of the

Brazilian Empire for the recognition of the Paraguayan Republic was determinant in the

European courts in the first half of the XIX century.

The postulates of the Paraguayan external politics since its independence were three:

1) the Self-Determination and Sovereignty of the peoples, 2) the Free Navigation of the

Rivers and 3) the balance of the nations. With these postulates, it defended its territorial

integrity and survival as an independent state. In addition, under these principles it

participated in the Uruguayan civil war, which broke out into a bloody war against three

adversaries ending in a military defeat, the destruction of its entire infrastructure and the

loss of two thirds of its population.

From 1870 to 1880, Paraguay was occupied by the Brazilian and Argentinian

armies, new borders with Argentina and Brazil were established with the loss of one

third of its territory and a heavy war debt was imposed. In order to pay this enormous

debt and rebuild infrastructure, most of the public lands were sold to companies or to

large estates connected to the victorious states.

Then, between 1931 and 1935, a war with Bolivia took place which demanded a

huge human and financial effort but which in the end determined the modern-day

borders between both states.

One can state that in the time period between 1870 and 1940, the Paraguayan state

experienced widespread shortages and its external relations were subordinated to

Brazilian and Argentinian interests.

2.1.2. From the Dictatorship to the Democracy

During the times of the Cold War, the Paraguayan governments were military

dictatorships and as for external policy, it concentrated its relations in an exclusive form

and aligned with the National Security Doctrine that defended a social system based on

democracy without communism led by the US.

In the sixties, a border disagreement took place with Brazil because of the usufruct

of the hydrological channel of the Parana River that culminated in a series of imposed

2 It is important to point out that the limits of Paraguay were subjected to three wars that were fought

over a period of 185 years, the first one in the eighteenth century "Guarani Wars" in which the Jesuits and Indians faced the Portuguese and Spanish troops that had modified the boundaries of both colonies through the 1750 Permuta Treaty held in Madrid between the crowns of Spain and Portugal. The other two were: "The Great War" or the "Triple Alliance" and the "Chaco War".

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agreements and the signature of the Treaty of Itapúa for the construction of the biggest

hydroelectric dam known until now.

In exchange it signed another treaty with Argentina to build a large dam

downstream on the same river leading to the creation of the Yacyreta dam.

The decline of Argentina as a power, materialized with the military defeat of the

Falklands in 1982, signified the pre-eminence of Brazil in the hegemonic dispute over

Paraguay.

The democratization of the regimes in the Southern Cone pressured the fall of the

dictatorship and superficially changed Paraguayan international policy.

With the creation of MERCOSUR, Paraguay formally acquired a status of equality

in the process of economic and commercial integration. Nevertheless the asymmetric

relations with Brazil and Argentina remained, specifically regarding the management of

the Yacyreta and Itapúa dams and the restrictions to free trade.

During the period of transitional governments, Paraguayan external policy was

characterized by seeking a balance with Brazil and Argentina and looking for the

support of the US and the European Union in order to insert itself and justify itself as

legitimate and democratic in the international context.

Between 1996 and 2000, Brazil’s pre-eminence in Paraguay increased, situation that

consolidated with the Argentinian crisis of 2001. In this new decade, Brazil exercises a

powerful tutelage on Paraguay’s external relations.

2.1.3. From the democratic consolidation

In the period of 2006-2011 a big change in the external politics was observed due to

the relative stability of the institutional system, the boost of agricultural development,

the increase of investments and of trade with states outside of the region as like –

particularly in the last two years – an increase of its prominence in UNSAUR.

The main characteristics of the Paraguayan external politics during this period are:

a) Abandon of the ideological fight and rapprochement to Cuba, Venezuela,

Russia

b) International demand of cooperation for development and fight against

poorness

c) Request for compensations from its partners of the MERCOSUR for

asymmetries

d) Increase of trade with Venezuela, Russia and continental China

e) Continuity of the diplomatic relations and support to Taiwan

f) Bigger activism in the regional organisms and especially the UNASUR

This period turns out to be very relevant so a different perspective of the most

conflictive problems with the neighboring countries is deled with, such as: the

negotiation of the Itapúa treaty, the definition of the debt for the construction of

Yacyreta.

2.2. The current conflicts

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Existing divergences between Paraguay and its neighbors can be identified in the

following themes:

2.2.1. In the bilateral field:

a) BRASIL:

- The renegotiation of the Itaipu treaty, that implies the definition of the price that

Brazil has to pay Paraguay for the sale and transfer of energy.

- The illegal situation of the Brazilian occupants in the Paraguayan border and the

appropriate regulations to contain the irregular trade of the “sacoleiros” or small-

scale smuggling.

b) ARGENTINA:

- The exact definition of the amount of the debt by the construction of the

Yacyreta and the fulfilment of the complementary work.

- The suspension of the control measures in the international navigation roads.

2.2.2. In the MERCOSUR field:

- The refusal of the Paraguayan Congress to the admission of Venezuela.

- The appropriate implementation of the Funds for the Structural Convergence of

the MERCOSUR (FOCEM).

- The compensations for the implementation of the duty unification and the

annulation of the double charge for 2019.

- The refusal to establish diplomatic relations with Continental China.

2.3. En el ámbito del UNASUR: In the UNASUR field

- The refusal from the Paraguayan Congress to ratify the Ushuaia Democratic

Clause II.

- Differences with the Venezuelan and Brazilian project energy integration.

3. PARAGUAY AND ITS INTEGRATION IN REGIONAL ORGANIZATIONS

3.1. Principales of Paraguaya’s foreign relations

Foreign relations are governed by the principles enunciated in the Constitution of 1992

which are defined in the following terms:

"ARTICLE 143 - The Republic of Paraguay, in its international relations, international

law accepts and conforms to the following principles:

1) National Independence

2) Self-determination of nations;

3) Legal equality of states;

4) Solidarity and international cooperation;

5) International protection of human rights;

6) Free navigation on international rivers;

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7) The non-intervention, and

8) The condemnation of all forms of dictatorship, colonialism and imperialism. "

Under these regulations, organizations such as MERCOSUR, UNASUR or any other

supranational body that is constituted and shall be valid for the Paraguayan legal system

if there is a foreground of equality between states and their rules will be valid in a

hierarchy inferior to the Constitution. (Art.137 and 144 of the Constitution).

As well as, it is explicit in the Constitution that every international treaty must be

submitted and approved by the Congress by absolute majority in each chamber (Art.

145). Thus, all international agreements must be approved by the National Congress for

its validity.

3.2. Suspension of Paraguay from the MERCOSUR and the UNASUR.

The government of Paraguay was suspended from the MERCOSUR and the

UNASUR in June 2012 as motive of the destitution by the Congress of President

Fernando Lugo, in implementing the clauses of defense of the democracy known as

Ushuaia I and II. This suspension was justified by the President of Uruguay as a

political action and it would not affect the economic exchange. For this reason the

Paraguayan government has been unable to attend many meetings and summits such as

in China, Arab States, European Union and more recently the summit CELAC-EU.

As for the UNASUR, during the times of dismissal Paraguay exercised the

Presidency Pro-Tempore, it was retired from quoted presidency and it was assigned to

Peru, and it also expanded its sanctions by promoting Paraguay’s suspension in all the

international forums due the rupture to the democratic order through a coup done by the

Parliament. By following these guidelines, in many occasions’ representatives of

Ecuador, Argentina, Uruguay, Venezuela and Brazil have tried to prevent the presence

of Paraguayan representatives in OAS meetings, FAO, UNESCO and other multilateral

organizations.

It is noted that in these conditions the government of Paraguay has severe

difficulties to participate in the defense of their interests in forums where members of

the UNASUR and the MERCOSUR are present, as they condition their participation to

the exclusion of Paraguay. The proof is the absence of Paraguay in the summit EU-

CELAC that was recently held in Santiago, Chile.

3.3. Background and reasons for the suspension of Paraguay.

In 2008 the duo Lugo-Franco win the elections with 42% of the votes and breaks a

68-year hegemony of the Colorado Party (ANR). This duo led the Patriotic Alliance for

Change (APC) agreement sui generis and varied with over 17 organizations and

political parties, each of which was presented with separate lists of delegates. As a result

of this procedure, the President was elected with two deputies and five senators

organizations related to his leadership as Vice President was elected with fourteen (14)

senators and twenty nine (29) deputies out of a total of one hundred twenty five (125)

legislators and, Governors 8 of 17 members of his party.

The enormous challenges to change the management towards pluralism and guide

the public policy towards the safeguarding of social rights generated many conflicts. On

top of all of this must be added the tensions caused by a) disputes with neighbors

including the renegotiation of the Treaty of Itaipú and b) the refusal of Congress to

permit ratification of the democratic clause of UNASUR and the entry of Venezuela

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into the MERCOSUR. It should be noted that the inability to articulate a political

alliance with the capacity to ensure the stability of government and projecting future

changes initiated increases the fragility of the government when it launched the

campaign for the elections in 2013.

After countless conflicts, the distance with its main ally and the accusation of being

associated with the Bolivarian social movement of the “Socialismo del siglo XXI”, a

peasant occupation of public lands usurped by a landowner resulted in the slaughter of

11 farmers and 7 policemen which shocked the country and exposed the weakness of

the President.

The immediate dismissal of the minister of the interior, support to the President and

his replacement by a controversial figure linked to the Colorado Party and the

promotion to Chief of Police responsible for killing police generated a definitive break

with the greater political support available in the Congress and resulted in a procedure

called Political Judgment.

Knowing the beginning of the process, a delegation of over 12 Latin American

foreign ministers and the Secretary-General representing the UNASUR was formed in

Paraguay with the intention to mediate, without success in its mission.

3.4. Dismissal and Suspension.

In a summary proceeding, accompanied by a huge fear of renewed fighting and the

rumor of foreign intervention, the National Congress by an overwhelming majority of

votes removed from post the President “for bad execution of functions” and conform to

the constitutional term of office he automatically took possession of the functions of

Vice President. This decision of the Congress was accepted by the President dismissed

although he expressly disagreed and the Vice President took office as President.

The dismissal of the President of the Republic by the overwhelming majority of

both houses of Congress and the assumption to the power of his duo elected as the Vice

President, led to the suspension of the Paraguayan state's rights and responsibilities in

the MERCOSUR and UNASUR, just like the determination to prevent the current

government from participating in multilateral organizations. Among the most radical

reactions Venezuela's government announced the suspension of diplomatic and trade

relations, which involves cutting on oil supplies.

Unlike Japan, Korea, Russia, U.S. and all States of the European Union agreed to

the dismissal as a normal process and constitutional governments of Argentina, Brazil,

Bolivia, Colombia, Cuba, Chile, Ecuador, Uruguay, Mexico, Peru suspended diplomatic

relations and called their ambassadors to consult, turning from Colombia, Mexico and

most recently Chile.

Within the OAS, Venezuela, Brazil, Argentina, Uruguay among others requested

sanctions from the new Paraguayan government. In response, a commission headed by

the Secretary General was approved to visit in situ and met with all the political and

social actors bringing a report that was discussed in plenary and concluded that in

Paraguay there was a political conflict resolved in the framework of its and regulations

and that would accompany the government in the normal development of the electoral

political process that began in the last half of 2012.

Then a delegation of the European Parliament made a similar visit, except that its

members met separately according to the political sign that they belonged to and which

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resolved in the need to support the political process until the elections scheduled for

April 2013. Later this became a mission of the UNASUR, which after conducting

interviews with the actors of the internal conflict and meeting with exponents of the

civil society to express that its conclusions would be presented to the Secretary General

to evaluate the actions to follow in the meeting of foreign ministers of the member

countries not suspended.

As a result of these visits, the quoted organizations have decided to send observer

missions to the electoral process and support the work of the Electoral Justice until the

elections on April 21.

3.4. What do the suspensions consist of?

3.4.1. The suspension in the MERCOSUR

The suspension of the Paraguayan government in the MERCOSUR, prevents it

from attending and participating in all organizations and events being sectorial like in

the internal summits or with other states or agencies as it was in the negotiations with

China, the Arab States, the European Union and more recently the CELAC-EU summit.

Nevertheless all the agreements and privileges set forth in the common regulations of

the MERCOSUR were kept.

Uruguay's President in office of the President Pro-Tempore recently expressed

that they could well represent Paraguay in the negotiations leading to a response that

Paraguay is independent since 1811 and can defend its interests.

3.4.2. Sanctions from the UNASUR.

The Council of Heads of State and Government of the UNASUR decided to suspend

the right of the representatives of Paraguay to attend to the meetings of the UNASUR

implementing the Additional Protocol to the Constitutive Treaty on commitment to

democracy known as Ushuaia II and urge to promote the suspension of Paraguay in all

the multilateral forums.

3.5. What are the effects of the sanctions?

In our opinion the effects of the suspension of Paraguay in the MERCOSUR and the

UNASUR are legal, political, economic and social.

From a legal perspective the suspension of the MERCOSUR and the UNASUR

imply a serious legal problem because, although the suspension of a state is a figure that

exists in the order of both regional bodies the "Protocol of Ushuaia on Democratic

Commitment in the MERCOSUR, the Republic of Bolivia and the Republic of Chile

"has legal validity as it was accepted and ratified by the Congress of Paraguay.

Considering that the decision to suspend the Paraguayan government in the

MERCOSUR was adopted by a summit of three Presidents, such authority does not

exist in the organization of the MERCOSUR, because according to what was

established by the Article 2 of the Protocol of Ouro Preto a summit of Presidents do not

constitute an institutional body to take binding legal decisions.

Nor can it invoke the "Protocol of Ushuaia on Democratic Commitment in the

MERCOSUR, the Republic of Bolivia and the Republic of Chile" because it requires

the states parties to do consults with the affected State before proceeding to a penalty of

any kind. This procedure was not met in any of the bodies established as the transfer to

Paraguay of a delegation of South American Foreign Ministers in time of the crisis was

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made on the behalf of the UNASUR and was headed by the Secretary General of the

entity and, neither did this procedure get accomplished at the summit of Mendoza -

event where the decision was made to suspend- because no Paraguayan delegation was

accepted and even refused the entry of the Vice President of the Parlasur by the mere

fact of being from Paraguay.

As in the UNASUR, the legal problem arises for not being valid because the

standard applied at the time of the decision to suspend, the Additional Protocol to the

Constitutive Treaty on commitment to the democracy of the UNASUR was not

approved by the Paraguayan Congress and therefore it is not valid for Paraguay or for

other UNASUR member states for not meeting the number of ratifications required for

the effect. 3

Another legal issue of great importance is the incorporation of Venezuela to the

MERCOSUR, held in the same Summit of Presidents in Mendoza without having met

the requirements of the Article 20 of the Treaty of Asuncion and the Article 12 of the

Protocol of Accession of Venezuela to the MERCOSUR.

From what has been exposed the Paraguayan government confirms that in terms of

international law none of the requirements established by both regional organizations

have been carried out and it raises issues of legal validity to the actions and decisions

that dictate the bodies of the MERCOSUR and the UNASUR without the presence and

participation of their representatives.

From a political perspective, the controversy refers to the validity of the

democracy and its institutions. The states of the MERCOSUR and the UNASUR argue

that the destitution of the President Lugo was a parliamentary coup that generated the

breakdown of the Paraguayan democratic process to be an arbitrary of the Parliament

that overwhelms the Executive Power with a trial that was done in record time without

giving appropriate right to the defense.

The Constitution assigns to the Congress the power to impeach the President and

the members of the Supreme Court of Justice among others under the generic charge of

badly exercising his functions. This legal authority has already been used on other

occasions and in the Congress the votes for impeachment was overwhelming, 116 voted

for the dismissal, 4 were absent and there were only 5 votes against. In the absence of

the President the Vice President who took over was elected in the same election makes.

Subsequently the Supreme Court ruled and declared valid the decision of the Congress.

In the political sense of cataloging constitutional coup to the dismissal of the

Paraguayan President is an incurable contradiction because if it is constitutional it is

allowed and if it was a coup in the broader political sense it should be out of the Law.

Regarding the defendant breakdown of the democratic process, there are contradictions

since the Vice President elected on the same formula that the President enabled and

deposed by the Constitution occupies the vacant position, constitutional guarantees and

public freedoms are in place, members of other branches have not been dismissed,

broken electoral processes or rescheduled partisan primaries or national elections.

Another policy issue relates to the refusal of The Paraguayan Congress to the

admission of Venezuela in the MERCOSUR, which being suspended the representation

3 Ministry of Foreign Affairs of Paraguay. "Press Release on Council decision of the Heads of State and

Government of UNASUR." Asuncion, June 28, 2012.

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of Paraguay in the Mendoza summit, the Presidents following the suspension approved

its admission that materialized itself in the summit of Brasilia. Bolivia’s formal

invitation to join as a fulltime member was also announced.

These decisions, generate a political controversy difficult to resolve, as the

Paraguayan Congress's refusal to Venezuela's entry into the Mercosur is a continuity

that almost has ten years that is verified in two constitutional mandates where the

Governments were favorable to its admission. The opposition to the entry of Venezuela

in this is very strong and should be a big change in the internal composition of the

Congress in order to change this position.

As for the economic effects of the suspensions, a decrease in trade and exchange

with the MERCOSUR is not noticed with MERCOSUR and the demand of the

President Chavez to implement an economic blockade did not influence most of the

South American nations. While some investors have decided to await the outcome of

the next elections, the suspension did not impact on the domestic economy as feared.

Paradoxically, Paraguay is experiencing a period of exceptional growth due to increased

agricultural production and the expansion of extra-regional markets for its traditional

products. International markets have favorably reacted to the expectations of the

Paraguayan economic growth by improving their qualification and predicted GDP

growth of two digits for the next few years.

From a social perspective, an increasing criticism of the MERCOSUR can be

observed in the Medias, in manifestations of social and political leaders, in particular for

the few benefits obtained like the establishment of a parallel with the War of the Triple

Alliance. It is common to observe output campaigns for the MERCOSUR and the

reestablishment of low tariff policies and the re-triangulated Asian products. As well as

media campaigns that resemble the heads of state of Argentina, Brazil and Uruguay

with those who in the nineteenth century committed serious crimes and abuses during

the war period. These campaigns have increased the suspicion and sometimes

aggression against the neighbors that it is possible to note during sports events.

4. CONCLUSIONS.

In our opinion the reintegration of Paraguay in the MERCOSUR and UNASUR will

be part of a review process that depends on internal and external factors.

The internal factors which determine the reintegration of Paraguay in these regional

organizations depend on the results of the general elections on April 21 and the

composition of the new Congress. Although all of the groups are campaigning without

restrictions, including the former President Lugo himself who is running for Senate, the

political confrontation is troubled by what will determine the transparency and good

organization of the general elections of April 21. The role of the observer missions of

the OAS, the Carter Center and the European Union will be crucial, as well as the action

of an observer mission aimed to install the UNASUR.

As for the possible outcomes of future elections, according to early polls the parties

that are questioning the suspension would have the majority and this presents a complex

negotiation in the future. In particular compensations could be reclaimed facing the

effects of the suspension and the entry of Venezuela into the MERCOSUR since broad

agreements and economic interests are at stake.

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The external factors that would condition Paraguay’s full return to these

organizations are related to how to solve the existing bilateral and multilateral conflicts.

At the bilateral level, special attention will be paid to negotiations with Brazil since six

pending claims to change the Itapúa Treaty whose has as center the modification of the

electricity rates and the compensation in public construction. As in Argentina, the

negotiations will also be delicate because this country currently has a debt in arrears

with Paraguay for energy supply and is waiting for the audit and review of the amount

of the debt for the construction of the Yacyretá dam.

The normalization of the status of Paraguay in the MERCOSUR and UNASUR also

presents legal difficulties because the penalties are not recognized as legally valid and

the decisions taken in their absence must be reviewed or in the worst scenario ratified.

That is why, the position that Paraguay assumes will be decisive regarding the

conceptualization of these organs and the modification or not of its foreign policy

doctrine that considers (MERCOSUR and UNASUR) as organizations composed by

sovereign states whose aim should be the convergence of the public trade policies,

customs, immigration, taxation to achieve socio-economic development but that do not

imply the assignment, or loss of sovereignty.

In this context the development and integration projects of infrastructure and public

policies, such as councils of communication, transport and security and its infrastructure

projects of the UNASUR are understood as instances of consultation and conciliation of

interests and not imperatives to follow.

The balance of interests and the compensation mechanisms with richer states

considering the notorious and growing imbalance with Brazil, Argentina and

Venezuela, is also relevant for Paraguay.

Another factor is the regional political stability, the harmony and compatibility

between the institutions of each state as the conceptual difference of interpretation

prevents agreements. Hence the need to count on Legal Framework of legal

compatibility and legal interpretation that ensures the legal and institutional stability and

unconditional implementation without circumstantiates conditioning of shared public

policies circumstantial.

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5. BIBLIOGRAPHY

- CONSTITUCION NACIONAL.

- PNUD Programa de las Naciones Unidas para el Desarrollo. Informe 2011.

http://hdr.undp.org/es/estadisticas/

- FAO Organización de las Naciones Unidas para la Alimentación y la

Agricultura. Clasificación de Países de Bajos Ingresos y con Déficit de

Alimentos (PBIDA). http://www.fao.org/countryprofiles/lifdc.asp?lang=es

- GRANELL TRIAS, Francesc. “La primera conferencia sobre la cooperación

con los países en desarrollo sin litoral.” en Boletín Económico del ICE No.

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