Paraguayan President Andres Rodriguez asked President Bush yesterday for restoration of special trade benefits that were suspended several years ago because of systematic human rights abuses in the South American country, White House officials said.
Bush sought increased Paraguayan anti-drug efforts, officials said.
The two met briefly in the Oval Office during a stopover by Rodriguez en route to Taiwan and South Korea.
"President Bush told President Rodriguez that we would like to cooperate more intensively with Paraguay to prevent drug traffickers from establishing a foothold in that country," said White House press secretary Marlin Fitzwater.
U.S. officials have expressed concern that Paraguay is becoming an increasingly active transshipment point for drugs produced elsewhere in South America. Drug trafficking planes have been reported using dozens of private airstrips in remote sections of Paraguay.
Rodriguez's cooperation so far with U.S. anti-drug efforts has not been effective, said one official who spoke only on condition of anonymity.
Rodriguez asked Bush to restore for Paraguay the system of Generalized Special Preferences (GSP) trade benefits, which allows third-world nations to ship products to the United States duty free or with low tariffs.
Under U.S. regulations, countries that violate basic labor rights can be denied GSP privileges. Paraguay is among nations sanctioned in recent years on such grounds.
Rodriguez also expressed hopes Bush would help his country's new move toward democracy.
Rodriguez, a military general, was elected last year after he overthrew dictator Gen. Alfredo Stroessner.
A 1990 State Department report on human rights in Paraguay noted significant steps by the Rodriguez government to reverse repression that was prevalent under Stroessner, but it said greater strides are needed.