Since gaining independence, Paraguay's fortunes have been largely determined by its relationships with its immediate neighbors. Like Uruguay to the south, it is a buffer state separating Brazil and Argentina--the two largest countries in South America--and, like Bolivia to the west, it is landlocked. ThÍÍÍÍe circumstance of being landlocked has historically led the country alternately into isolationism and expansionism its buffer status has underwritten its sovereignty. Paraguay's foreign policy has traditionally aimed at striking a balance between the influence of its two large neighbors.

Foreign policy under Stroessner was based on two major principles: nonintervention in the affairs of other countries and no relations with countries under Marxist governments. The only exception to the second principle was Yugoslavia. Paraguay maintained relations with Taiwan and did not recognize China. It had relations with South Africa but not with Angola or Mozambique. Paraguay broke diplomatic relations with Cuba in 1959 after the Castro government provided support to Paraguayan radicals. It terminated relations with Nicaragua in 1980 after the assassination in Asunción of Anastasio Somoza Debayle, the deposed Nicaraguan dictator. It was a member of the United Nations (UN), the Organization of American States (OAS), and the Latin American Integration Association, and a signatory of the 1947 Inter-American Treaty of Reciprocal Assistance (Rio Treaty).

Data as of December 1988