Strong Growth in Maquiladora Exports
The Paraguayan maquiladora sector recorded a 34% increase in exports during January 2025, reaching a total of USD 100 million, marking a robust start to the year. This export surge consolidates the maquiladora industry as a pillar of Paraguay’s foreign trade, demonstrating its resilience and competitive edge in the global and regional markets. The maquiladora sector, which operates under a special tax and customs regime that allows the importing of raw materials and components for export-oriented manufacturing, continues to play a crucial role in the country’s economic development.
Mercosur as the Primary Destination
An analysis of Paraguayan maquiladora exports highlights a significant regional concentration, with Mercosur countries absorbing 86% of total shipments under this regime. This underscores the strong trade ties between Paraguay and its Mercosur partners, particularly Brazil and Argentina, which serve as the primary buyers of Paraguayan manufactured goods.
Beyond Mercosur, Paraguayan maquiladora exports also reached other markets, albeit in smaller volumes. Bolivia accounted for 3.2% of total exports, followed by Chile with 2.9% and the United States with 2.7%. While still marginal compared to the overwhelming share of Mercosur, these figures indicate an incipient yet consistent diversification trend as Paraguayan producers seek to expand their presence in global markets beyond South America. This diversification is essential for reducing dependency on Mercosur and mitigating risks associated with economic fluctuations in the region.
Trade Balance Remains Positive Despite Rising Imports
Alongside export growth, imports related to the maquiladora sector also saw a sharp rise, increasing by 45% year-on-year to reach USD 77 million in January 2025. This uptick in imports reflects the growing demand for raw materials, machinery, and intermediate goods required for maquiladora operations. Despite this higher import growth rate, the sector maintained a positive trade balance, with exports exceeding imports by USD 23 million, a 29% surplus.
The positive trade balance confirms the efficiency of the maquiladora model in adding value to imported inputs and transforming them into export-ready goods. This contributes positively to Paraguay’s overall trade performance, strengthening the country’s foreign exchange earnings and reinforcing the maquila regime as an effective strategy for industrialization. The continued expansion of maquiladora activity suggests that companies operating under this framework successfully integrate into global and regional supply chains while maintaining competitiveness.
Geographic Distribution of Maquiladora Companies
The Paraguayan maquiladora sector is geographically concentrated in strategic regions of the country, where logistical advantages and proximity to key markets influence industrial location decisions.
Alto Paraná Department leads with 48% of all approved maquiladora companies, benefiting from its border position with Brazil, the primary consumer market. The presence of well-developed infrastructure, industrial parks, and trade routes makes it the epicenter of maquiladora activity in Paraguay.
The Central Department follows with 28% of maquiladora firms. It is a hub for industrial and logistical operations due to its proximity to the capital, Asunción, and key transport routes.
Asunción (Capital) hosts 9% of the maquiladora companies and benefits from administrative and financial services supporting industrial operations.
Amambay Department accounts for 6% of the total, leveraging its border position with Brazil and emerging as a growing industrial hub.
This distribution highlights the importance of border regions in maquiladora operations, as proximity to major consumer markets like Brazil enhances trade efficiency. At the same time, the concentration of maquiladora firms in Central Paraguay reflects efforts to develop diversified industrial clusters beyond traditional border trade zones.
Job Creation and Economic Impact
The maquiladora sector remains a significant job creator in Paraguay, reinforcing its role in providing stable and formal employment opportunities. In January 2025 alone, 734 new jobs were generated, bringing the total employment in the sector to 30,690. This represents a 22% increase compared to January 2024, highlighting the sector’s dynamism and ability to absorb labor in a growing economy.
The continued expansion of Paraguayan maquiladora exports is particularly relevant in the current economic climate, as it provides stable employment and contributes to social stability by offering jobs in the manufacturing, logistics, and service sectors. The sector’s strong labor absorption capacity ensures that more Paraguayans have access to formal employment opportunities, which often include training programs, skill development, and job security—key factors in promoting long-term economic growth.
Key Employment Sectors in the Maquiladora Industry
A closer look at employment distribution within Paraguayan maquiladora exports reveals that five main subsectors account for 72% of total employment:
Auto Parts Industry – The leading subsector benefiting from Paraguay’s integration into regional automotive supply chains, particularly within Mercosur.
Textile Industry – A significant employer that produces garments and textiles primarily for export.
Intangible Services – Including software development, call centers, and business process outsourcing (BPO).
Plastics Manufacturing – Producing a wide range of plastic goods for various industries.
Chemical Products – Supplying essential industrial and consumer chemicals.
This sectoral composition illustrates the evolution of the maquila regime in Paraguay. Initially dominated by labor-intensive industries, the sector has gradually diversified into higher-value industries, including technology and automotive manufacturing. The growing presence of technology-driven maquiladoras reflects Paraguay’s ambition to move beyond basic assembly work and integrate into more complex global value chains.
Challenges and Opportunities for Future Growth
The positive performance of Paraguayan maquiladora exports in January 2025 underscores the effectiveness of this industrial and trade policy framework. However, several challenges and opportunities remain for the sector’s long-term sustainability.
Challenges
High Dependency on Mercosur—While regional trade integration has provided growth opportunities, Paraguay’s reliance on Mercosur markets exposes it to potential economic fluctuations in Brazil and Argentina.
Infrastructure Gaps—Continued investments in transportation, energy, and digital infrastructure are needed to support the expanding maquiladora sector.
Global Competition – Paraguay must enhance its competitiveness by diversifying exports and increasing technological sophistication to compete with larger manufacturing hubs like Mexico and Brazil.
Opportunities
Market Diversification – The modest but increasing exports to the United States, Bolivia, and Chile signal potential for further expansion beyond Mercosur. Trade agreements and promotional strategies can facilitate access to new markets.
Industrial Upgrading – Encouraging investment in automation, digitalization, and innovation will enable Paraguayan maquiladoras to produce higher-value goods and remain competitive.
Sustainability Initiatives – With rising global demand for eco-friendly manufacturing, Paraguay can leverage its renewable energy resources to attract sustainable and green manufacturing investments.
Conclusion
The sustained expansion of Paraguayan maquiladora exports confirms the effectiveness of the maquila regime in promoting industrialization, job creation, and trade growth. While the sector faces challenges in diversifying its export destinations, the early signs of expansion into new markets suggest promising opportunities for Paraguay’s manufacturing industry. The country can further consolidate its maquiladora sector as a long-term economic growth and development driver by strengthening trade agreements, investing in technology, and enhancing infrastructure.