Singapore and Paraguay to deepen cooperation in sustainability, agri-food trade

There is great potential for deeper cooperation between Singapore and Paraguay in areas like climate action and the agri-food industry, said President Tharman Shanmugaratnam on 23 May.

He was speaking at a state banquet held to host Paraguay’s President Santiago Pena, whose state visit is the first here by a Paraguay head of state.

President Pena separately met Prime Minister Lawrence Wong and discussed the progress in ratifying the Mercosur-Singapore Free Trade Agreement, which was signed in December 2023.

They also discussed potential areas of collaboration, such as in the green finance and energy sectors, and witnessed the signing of an implementation agreement on carbon credit collaboration between both countries. The agreement lays out a framework for generating and transferring carbon credits from carbon mitigation projects, which will make it easier for project developers when they create high-quality carbon credit projects.
 

At the state lunch banquet, Mr Tharman said: “Paraguay’s strategic location at the heart of South America, combined with Singapore’s position as a gateway to Asia, creates natural opportunities for us to serve as bridges between our respective regions.” He also noted that Paraguay has been tenacious in transforming its economy and plugging into global trade and investment flows, even with the constraints of being landlocked.

He pointed to its name, which is said to be derived from Guarani roots that mean “the river that gives birth to the sea”. This is a reminder that even the most inland of nations can contribute to the currents of global progress, he noted.

“These efforts reflect a broader truth: that a nation’s potential is ultimately defined not by its size or geography, but by its ambition and determination to seize opportunities in a connected world,” Mr Tharman said. He added that Singapore’s story as a small nation is also about transformation against the odds, and joining in the currents of global progress.

“Our shared experiences as small states underscore a vital lesson: We gain strength through collaboration. This is reflected in our active pursuit of regional and international tie-ups,” he said.

Mr Pena, in his speech at the banquet, said Paraguay shares Singapore’s vision of
economic freedom.

“We are committed to an economy that is open, competitive, and deeply integrated with the world. We know that when a country does well, through cooperation based on mutual trust, its partners are also strengthened,” he said.

Mr Tharman noted that while trade between Singapore and Paraguay has thus far been modest, the potential for growth is significant.

Paraguay is a top exporter of soya beans and beef, with a reputation for quality and sustainability, he said.

“There are natural synergies with Singapore’s ambition to be Asia’s hub for agri-food innovation and technology. With our Singapore Food Agency’s recent certification, Singaporeans will soon also be able to consume beef, pork, and poultry among several processed products from Paraguay,” he added.
 

The Mercosur-Singapore Free Trade Agreement will also be the catalyst for broader economic partnership, including in the digital economy and sustainable development, he said.

Mercosur refers to the Southern Common Market, which was established by Argentina, Brazil, Paraguay and Uruguay.

Mr Pena said of the pact: “We are confident that its entry into force will soon become a reality, opening up new opportunities for trade, investment and joint innovation between our nations.”

Mr Tharman also said there is growing scope for collaboration in the sustainability space, noting that Paraguay is not only self-sufficient in clean energy but also a significant exporter.

The newly signed agreement for carbon credit collaboration will mean investments in high-quality climate projects in Paraguay – be they in forest conservation, renewable energy, or sustainable agriculture, he said. Meanwhile, this can also contribute to Singapore’s decarbonisation goals.

Mr Pena said: “Paraguay recognises Singapore as a strategic partner in the transition to a greener and more forward-looking economy.

“This initiative materialises a conviction that we firmly hold: that economic growth and sustainability are not only compatible, but inseparable in the path to modern development.”

The agreement will also advance both countries’ climate ambitions by directing financing towards unlocking potential in Paraguay. Minister for Sustainability and the Environment Grace Fu, who signed the agreement, said: “Singapore and Paraguay share warm and growing trade relations, with both countries committed to fostering sustainable development and economic cooperation.

“I look forward to seeing companies leverage this agreement to develop tangible projects that drive real emissions reductions.”

At a separate business roundtable held by the Latin American Chamber of Commerce, Ms Fu added: “By linking Paraguay’s robust carbon credit potential with Singapore’s global platforms, we can unlock significant opportunities, not just for climate action, but also for our businesses to innovate and invest in the green economy.”

Mr Pena and his wife Leticia Ocampos de Pena also visited the National Orchid Garden, where a new orchid hybrid was named in their honour.

Earlier in the day, Mr Pena received a ceremonial welcome at the Ministry of Foreign Affairs.
 

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