Switching diplomatic allegiance from Taiwan to China has not brought the economic benefits that some countries have hoped for, the president said.
Paraguay President Santiago Peña said his country enjoys a “strong alliance” with diplomatic ally Taiwan, and countries that have made the diplomatic switch to China have not fared as well as they had initially anticipated.
In a recent interview with EpochTV’s “American Thought Leaders,” Peña said that his country does not prioritize economic interests over its values and principles, and he described the relationship between Paraguay and Taiwan as that of “good friends.” Paraguay and Taiwan established diplomatic ties in 1957.
Peña pointed to his country’s history, specifically the Paraguayan War that started in 1864, and said that he understood the threat Taiwan faces from the Chinese regime’s influence.
Since the Democratic Progressive Party (DPP) came to power in Taiwan in 2016, the Chinese Communist Party (CCP) has been stripping Taiwan of its diplomatic allies and stepping up diplomatic, economic, and military pressure on the self-governing island. The CCP views Taiwan as a breakaway province and labels Taiwanese President Lai Ching-te and his predecessor, Tsai Ing-wen, both DPP members, as “separatists.”
Taiwan has 12 diplomatic allies, including Eswatini, Haiti, Guatemala, and the Vatican. In the Western Hemisphere,
Panama,
the Dominican Republic,
El Salvador,
Nicaragua, and
Honduras were once Taiwan’s allies, but all chose to recognize China diplomatically in recent years.
South American countries like Argentina, Brazil, and Peru switched their diplomatic recognition from Taiwan to China in the 1970s.
Diplomatic Switch
In the last couple of years, Peña said he had spoken to the leaders of South American countries that made the diplomatic switch from Taiwan to China. According to Peña, the leaders said they felt misled by Beijing’s false promises.“Many of them said, ‘Look, I thought five, ten years ago, that if I was making this [diplomatic] move, my country will be much more developed. And the reality is not that. It’s quite the opposite,’” he said.
Peña explained the leaders had believed that their countries would benefit by tapping into China’s huge market. Instead, they said their diplomatic decisions have exposed their countries to a Chinese manufacturing base that doesn’t abide by the same labor laws, environmental standards, and regulations that their countries abide by.
Now, these countries “are less developed,” Peña said, and “they rely more on manufactured goods from Asia and less on the capacity to create jobs in their own country.”
“So that’s why we have decided to follow a different path, a relatively small country that develops an industrial base [that can manufacture] high-quality products, that [is] able to compete with any country of the world,” he said.
Honduras has experienced economic troubles after severing ties with Taiwan in May 2023, particularly in its shrimp farming industry. The diplomatic breakup has also
ended the free trade agreement between the two countries.
Honduran newspaper El Heraldo
reported in April 2024 that at least 250 shrimp farms had stopped production due to the lack of access to markets in Taiwan and Mexico. In November, the outlet
reported that shrimp exports to Taiwan totaled 7.4 million pounds for the first 10 months of 2024, down from 22.1 million pounds during the same period in 2023.
Earlier this month, the outlet
reported that local merchants in the country’s Central District, which includes Tegucigalpa and Comayagüela cities, saw their sales drop by up to 70 percent because they couldn’t compete against the new Chinese businesses selling low-cost Chinese goods.
The U.S. State Department has warned countries about seeing China as a more favorable diplomatic partner than Taiwan. In a
statement in January last year after
Nauru made the switch, the department said China “makes promises in exchange for diplomatic relations that ultimately remain unfulfilled.”
Paraguay–Taiwan Ties
The CCP’s attempt to undermine the Paraguay–Taiwan ties recently came to light. Last month, Paraguay’s foreign ministry
canceled the visa of a Chinese diplomat over what it called “interference in internal affairs” for his remarks urging the South American country to switch its diplomatic allegiance to China.
Peña recently
spent a few days in Washington to attend President Donald Trump’s inauguration. During his visit, he met with Sen.
Rick Scott (R-Fla.) and then-Sen.
Marco Rubio (R-Fla.), who is now the secretary of state.
Peña also met with Alexander Yui, Taiwan’s top diplomat to the United States. In a
post on social media platform X on Jan. 18, Paraguay’s presidential office said the two discussed the importance of their diplomatic relations and that “collaboration with the United States can be key to the development and growth of both nations.”
Bilateral trade between Paraguay and Taiwan reached $250 million in 2022,
according to Taiwan’s Ministry of Economic Affairs.
Peña traveled to Taiwan in May 2024 to take part in Lai’s inauguration, and the two leaders subsequently held talks.
According to a
press release from Taiwan’s presidential office at the time, Peña said that his country and Taiwan are similar in that they both wish to defend freedom, democracy, and human rights. He said that his trip “reaffirms 66 years of strong diplomatic ties” between the two sides, according to the release.
“Paraguay and Taiwan have a history of cooperation that has allowed us to strengthen the friendship between our countries,” Peña
wrote on X on May 21, 2024, while sharing a photo of him and Lai.
“We spoke about the fraternal ties that unite our countries and about continuing to work together for the well-being of our nations.”
