Why Paraguay Is the Strategic Partner Japan Can't Afford to Overlook

Japan Forward

05-05-2025

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The world is becoming increasingly uncertain. For Japan, a resource-poor island nation that must always depend on others, strengthening ties with dependable partners is essential. Especially valuable are countries that share values like democracy and the rule of law, and that maintain a consistent diplomatic stance. One such country is Paraguay, in the heart of South America. Not only is it traditionally pro-Japan, but it is also politically stable and potentially a reliable partner in food and energy security.
Japanese media rarely report on Paraguay, despite its location in the very center of the South American continent.
Mario Toyotoshi, Paraguay's Ambassador to Japan, says, "President (Santiago) Pena often says, 'Paraguay's problem is that there are no problems.' That's why we're never in the news."
Ambassador Toyotoshi's father, Naoyuki was the founder of the Toyotoshi Group, which deals in Japanese car sales. He served as ambassador to Japan from 2009 to 2017. Born to first-generation Japanese immigrants, Mario Toyotoshi was raised in Paraguay and graduated from International Christian University (ICU) in Japan.
He briefly worked at Toyota before returning to Paraguay after one year to support the family business. Later, he spent over 30 years in Canada and elsewhere as a businessman, before being appointed ambassador at the president's request. Paraguayan Ambassador to Japan, Mario Toyotoshi (©Sankei)
Paraguay has a population of 6.86 million and a land area of 407,000 km² — about 1.1 times the size of Japan. Around 70% of the population is under 30. Diplomatic ties with Japan began in 1919, and Japanese migration started in 1936.
In 1959, following World War II, the two countries signed a migration agreement that allowed up to 85,000 Japanese immigrants. Today, there are nearly 10,000 people of Japanese descent or Japanese citizens living in Paraguay. Additionally, Japan has long been one of Paraguay's major aid donors.
After the 2011 Great East Japan Earthquake, Japanese-Paraguayan communities donated 100 tons of soybeans. These were turned into tofu and sent as relief supplies to affected areas. It's also well known that soybeans became a major export for Paraguay thanks to contributions from Japanese immigrants.
Paraguay enjoys long-term political stability. Its 2024 GDP growth rate is projected at 3.9%, compared to the Latin American average of 2.6% (before Donald Trump's tariff announcement). Its grain self-sufficiency exceeds 270%, ranking among the world's highest.
Paraguay's electricity is fully powered by hydropower, notably from the Itaipu Dam, one of the world's largest, which it cooperatively shares with Brazil. The surplus electricity that Paraguay cannot use is sold to Brazil, making electricity one of its top exports.
On diplomacy, Ambassador Toyotoshi says: "Paraguay's approach is values-based, so there's little ambiguity. We don't flip policies based on what's popular."
This unwavering stance is most evident in its relationship with Taiwan, with which it established diplomatic ties in 1957. While most countries have switched allegiance to China, only 12 nations still recognize Taiwan diplomatically, and Paraguay is the only one in South America.
Meanwhile, it's surrounded by nations with strong China ties: Brazil, Argentina, and Bolivia.
Also, Paraguay faces daily pressure from China. In December 2023, a Chinese diplomat who had received a visa to attend a UNESCO conference instead met with opposition lawmakers and publicly urged Paraguay to establish relations with China. The government cancelled his visa and deported him for engaging in activities inconsistent with his stated purpose. Such tactics are just a glimpse of Uruguay's broader resolve.
Ambassador Toyotoshi notes: "We've paid a heavy price for a values-based foreign policy."
For example, when Russia invaded Ukraine in 2022, Paraguay clearly condemned the act as a violation of a sovereign nation. In retaliation, Russia slashed beef imports from Paraguay, which had been its second-largest export market. Taiwan stepped in to buy the surplus beef and is now its largest beef importer. Still, China continues direct efforts to win over Paraguayan cattle farmers.
Paraguay's continued support for Taiwan is rooted in its Cold War history. Under dictator Alfredo Stroessner (1954–1989), Paraguay aligned with America in its anti-communist stance and received robust military and economic support. After US aid decreased in the late Kennedy era due to democratization demands, Paraguay deepened ties with Taiwan and Japan. Taiwan's President Lai Ching-te speaks at the Double Tenth Day ceremony in Taipei on October 10, 2024. (©Sankei by Yoshiaki Nishimi)
Even after democratization in 1989, it maintains its ties with Taiwan.
Ambassador Toyotoshi explains, "Paraguay values those who value us," and "After democratization, diplomacy became even more important."
Ties include Taiwan's ODA (official development assistance), EV bus plant investment, and engineer training exchanges.
In August 2023, President Lai Ching-te visited Paraguay to attend President Pena's inauguration. President Pena returned the gesture in May 2024 by attending President Lai's inauguration in Taiwan.
A new East–West corridor across South America, about 3,000 km long, is under construction. It runs roughly the distance from Hokkaido to Okinawa. Once complete, it would improve regional connectivity and reduce dependency on the Panama Canal, which is expensive and congested. Ambassador Toyotoshi estimates it could cut shipping times by three weeks. There are also plans to lay liquid natural gas pipelines along the corridor.
Japan's chance? Paraguay hopes Japan will invest in two free trade zones on the corridor's western end — Iquique and Antofagasta in northern Chile. While they are located in Chile, they are central to Paraguay's Pacific access strategy. These zones could become major logistics hubs but remain underdeveloped.
"Opportunities go to those who seize them," says the ambassador. "Paraguay is looking for investors," he adds. "Many countries are interested, but I believe Japan should recognize the strategic importance of these ports."
One major Paraguayan request is for Japan to lift the ban on Paraguayan beef. Japan prohibits imports from countries with foot-and-mouth disease, and is currently assessing Paraguay's risk.
The Ministry of Agriculture, Forestry and Fisheries says the evaluation is data-based and takes time. However, it's already been seven years since the request, and Paraguay is growing impatient. Even countries with weaker historical ties to Paraguay, like Singapore and South Korea, have shown interest in its beef.
While acknowledging the complexity of the process, Ambassador Toyotoshi says, "I'm personally very concerned. Japan is Paraguay's most important partner, yet we're falling behind other countries."
In February 2025, a tasting event for Japanese companies was held in Taipei. If the beef is processed in MAFF-certified facilities in Taiwan, Japan can legally import it. It was a creative workaround by Japanese, Taiwanese, and Paraguayan stakeholders.
While it may be important for Japan to stabilize relations with countries like China that do not share its values, it is even more urgent to deepen ties with nations that do, before it is too late.
(Read the article in Japanese .)
Author: Makiko Takita, The Sankei Shimbun
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