评估巴拉圭在欧盟无森林砍伐监管下的脆弱性

11291 Evaluating Paraguay’s Vulnerabilityto the EU Deforestation-Free Regulation Nicolas Borchers ArriagadaMariana Conte GrandJosé-Daniel ReyesDiego RojasPui Shen Yoong Prosperity and Planet VerticalsJanuary 2026 A verified reproducibility package for this paper isavailable athttp://reproducibility.worldbank.org,clickherefor direct access. Policy Research Working Paper11291 Abstract This paper examines Paraguay’s vulnerability to the Euro-pean Union’s Regulation on Deforestation-Free Products.Drawing on trade data, customs firm-level data, andhigh-resolution geospatial analysis, it assesses exposureat the country, firm, and geographic levels. The resultsshow that Paraguay’s direct export exposure to the Euro-pean Union’s Regulation on Deforestation-Free Productsis modest, but indirect exposure through Argentina’s soyvalue chain could affect up to 13 percent of Paraguay’sexports. Firm-level evidence indicates that soy and rubber exports are concentrated among a few large firms, whereasthe emerging wood and forestry sector is fragmented acrosssmall and medium-sized enterprises with limited capacityto absorb compliance costs. Geospatial analysis suggeststhat only 0.4 to 2 percent of soybean areas may be at riskof noncompliance, concentrated in Itapúa, San Pedro, andAlto Paraná. Overall, Paraguay’s vulnerability stems primar-ily from indirect value-chain linkages, underscoring theneed for targeted support and regional coordination withinMERCOSUR to strengthen environmental governance. The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about developmentissues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry thenames of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely thoseof the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank andits affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. Evaluating Paraguay’s Vulnerability to the EU Deforestation-Free Regulation* Nicolas Borchers Arriagada, Mariana Conte Grand, José-Daniel Reyes†, DiegoRojas, Pui Shen Yoong JEL Classification:F13, Q17, Q56 Keywords:Trade Policy, agriculture, environment and development. I.Introduction The European Union’s Regulation on Deforestation-Free Products (EUDR), adopted in 2023,is alandmark effort to internalize environmental externalitiesofinternationaltrade.By requiringoperators and traders to ensure that key commodities placed on the EU market are not associatedwith deforestation or forest degradation after December 31, 2020, the regulation seeks to aligninternational trade flows with climate and biodiversity objectives. However, its implications arelikely to vary considerably across exporting countries depending on production structures, tradepatterns, and institutional capacities.Poor countries mayface disproportionate adjustment costs.Moreover, by creating asymmetries in environmental regulation across markets, the EUDR couldinduce trade diversion toward other large markets that do not impose similarrequirements. Suchdisplacement would not only weaken the regulation’s global environmental effectiveness butcould also reduce welfare in the EU through lower import volumes andhigher prices. Recent studies highlight substantial cross-country and cross-commodity variation in readiness tocomply with the EUDR. Evidence from Brazil and Indonesia shows that compliance dependslargely on land-governance quality and supply-chain organization (de Oliveira et al. 2024; Solihinet al. 2024). In Brazil, cattle supply chains remain most exposed due to weak traceability systems,while soy exporters are comparatively better prepared. In palmoil–producing countries,smallholders face disproportionate compliance burdens and institutional gaps in verification(Solihin et al. 2024). Similar constraints are observed in Central America’s coffee sector, wherefragmented production structures hinder traceability (FAO 2023). Paraguay provides a particularly relevant case to assess the vulnerability of an upper-middleincomecountry to the EUDR. Thelandlockedcountry is a major exporter of land-use-intensivecommodities, especially soybeans and beef, that are directly covered by the regulation. Althoughthe EU has become a relatively minor destination for Paraguay’s exports, the regulation couldaffect Paraguaythrough indirect effects via regional value chainswhile also imposing significantadjustment costs on small and medium-sized exporters. Moreover, by tightening environmentalmarket access conditions, the EUDR could limit Paraguay’s ability to fully benefit from preferentialaccess under the recently concluded EU–MERCOSUR Free Trade Agreement. This paper assesses Paraguay’s vulnerabi