Upcoming Paraguayan Election a Bellwether for Taiwan’s International Standing

The outcome of this month’s hotly contested Paraguayan election will likely determine whether Asuncion maintains diplomatic relations with Taipei or switches recognition to Beijing, a move that would leave Taiwan with formal ties to only 11 sovereign states. Taiwan’s diminished recognition raises doubts about Washington’s strategy to shore up the island nation’s standing, one predicated upon supporting Taipei’s international participation while still opposing Taiwanese statehood.

Paraguay is Taiwan’s last formal diplomatic ally in South America, having established relations with Taipei in 1957. While corruption remains voters’ top concern ahead of Paraguay’s April 30 presidential election, Paraguay-Taiwan relations have emerged as a wedge issue between the opposition Authentic Radical Liberal Party (PLRA) and the ruling Colorado Party.

PLRA presidential candidate Efrain Alegre’s website acknowledges that Paraguay maintains “very important” relations with Taiwan. However, it also notes that, if elected, Alegre will “weigh this situation carefully” because Paraguay “cannot continue losing the commercial opportunities of the Chinese market or the flow of potential investments.” More specifically, Alegre believes switching recognition could boost Paraguay’s soy and livestock sectors, which account for five of its top six export categories. For his part, Colorado’s candidate, Santiago Pena, claims he will maintain relations with Taiwan if he wins.

Paraguay’s election occurs mere weeks after Honduras severed relations with Taiwan. Honduran President Xiomara Castro’s decision was based on her desire to secure financing for several infrastructure projects, including the Patucca III hydroelectric dam. Now, Honduras can join China’s Belt and Road Initiative and gain access to concessional loans that are difficult to obtain from the World Bank or International Monetary Fund. Honduras can also now export commodities — such as seafood, coffee, and bananas — to China.

Besides Honduras, São Tomé and Príncipe, Panama, the Dominican Republic, Burkina Faso, El Salvador, Kiribati, the Solomon Islands, and Nicaragua have all severed ties with Taipei since 2016, when Tsai Ing-wen of the Democratic Progressive Party (DPP) became president. Taiwan lost a comparable number of allies between 2000 to 2008, the first time the nationalist and center-left party governed the island.

China’s campaign to degrade Taiwan’s standing relies on “checkbook diplomacy,” characterized by Beijing pledging huge sums of aid and other development assistance to countries in exchange for recognition. Taipei refuses to compete dollar-for-dollar with China, arguing instead that Taiwan must win other countries over by supporting projects that benefit their “governments and the people.” Despite China’s efforts, Taiwan retains robust informal ties with more than 100 countries and remains central to global semiconductor supply chains.

Regarding Paraguay, the Biden administration should consider dispatching U.S. Special Presidential Advisor for the Americas Chris Dodd to Asuncion immediately after the election to assess the next government’s plans and discuss incentives for maintaining ties to Taiwan.

Similar missions should be considered with Taiwan’s other recognition partners, even while accepting that China may succeed in winnowing down that number even further.

More broadly, Taiwan’s growing isolation demands a new approach, one that strengthens Taiwan’s informal links to other countries and the international system. Such efforts should include binding Taiwan to U.S. value chains by ratifying a long-delayed bilateral free trade deal. Washington should encourage other countries, particularly in Europe, to do the same.

The U.S. should also wield its significant multilateral influence to fulfill Secretary of State Antony Blinken’s promise to secure Taiwan’s participation in various international fora, such as the World Health Organization. To assist those efforts, Congress should consider conditioning a portion of Washington’s future voluntary financial contributions to these organizations on Taiwan’s eventual inclusion.

Craig Singleton, a national security expert and former U.S. diplomat, is a senior fellow at the Foundation for Defense of Democracies (FDD), where he serves as the deputy director of FDD’s China Program. For more analysis from Craig and the China Program, please subscribe HERE. Follow Craig on Twitter @CraigMSingleton. Follow FDD on Twitter @FDD. FDD is a Washington, DC-based, nonpartisan research institute focused on national security and foreign policy.