Argentina and Paraguay reach truce in waterway dispute

The Paraná-Paraguay waterway, spanning 3,681 kilometers in South America, has been a vital trade route for landlocked Paraguay and a key export channel for Argentina. However, a dispute arose when Argentina imposed a toll on the waterway, leading to tensions between the two nations.

After more than a month of disagreement, Argentina and Paraguay recently reached a temporary truce following negotiations involving Brazil, Bolivia, and Uruguay. During the next 60 days, they will establish a technical committee to analyze toll rates, and Argentina will not pursue legal action for late payments during this period.

The toll dispute began in November 2022 when Argentina set a rate, citing infrastructure investments. Paraguay rejected the toll, leading to its implementation on January 1, 2023, resulting in invoicing of logistics companies. Tensions escalated in May when Argentina detained a Paraguayan barge over unpaid tolls.

The situation worsened in August, as contradictory accounts of a high-level commission agreement emerged after a meeting between Argentine and Paraguayan officials. This led to a public disagreement, with Paraguay accusing Argentina of unilateral action.

The dispute broadened regionally, with Bolivia, Brazil, and Uruguay expressing their displeasure. Paraguay’s decision to control the Yacyretá dam’s power output affected Argentina’s power supply, further escalating tensions. Argentina also detained fuel trucks at the Paraguayan border.

At the height of the conflict, a U.S.-based trade association called for U.S. government intervention to quantify the damages Argentina caused Paraguay. The situation remains unresolved.

Source: Buenos Aires Herald

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