Evaluating Paraguay’s Vulnerability to the EU Deforestation-Free Regulation

Nicolas Borchers Arriagada, Mariana Conte Grand, Daniel Reyes, Diego Rojas and Pui Shen Yoong

No 11291, Policy Research Working Paper Series from The World Bank

Abstract: This paper examines Paraguay’s vulnerability to the European Union’s Regulation on Deforestation-Free Products. Drawing on trade data, customs firm-level data, and high-resolution geospatial analysis, it assesses exposure at the country, firm, and geographic levels. The results show that Paraguay’s direct export exposure to the European Union’s Regulation on Deforestation-Free Products is modest, but indirect exposure through Argentina’s soy value chain could affect up to 13 percent of Paraguay’s exports. Firm-level evidence indicates that soy and rubber exports are concentrated among a few large firms, whereas the emerging wood and forestry sector is fragmented across small and medium-sized enterprises with limited capacity to absorb compliance costs. Geospatial analysis suggests that only 0.4 to 2 percent of soybean areas may be at risk of noncompliance, concentrated in Itapúa, San Pedro, and Alto Paraná. Overall, Paraguay’s vulnerability stems primarily from indirect value-chain linkages, underscoring the need for targeted support and regional coordination within MERCOSUR to strengthen environmental governance.

Date: 2026-01-12
References: Add references at CitEc
Citations:

Downloads: (external link)
https://documents.worldbank.org/curated/en/0995250 ... f70-06abda9a9056.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:11291

Access Statistics for this paper

More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().