Also in 2006, Paraguay signed and ratified an agreement with the U.S. under the Tropical Forest Conservation Act that provides Paraguay with $7.4 million in relief and zeroing out its remaining bilateral debt in exchange for the Paraguayan Government's commitment to conserve and restore tropical forests in the southeastern region of the country.

Separately, the U.S. Agency for International Development (USAID) supports programs to strengthen Paraguay's democratic institutions in the areas of civil society, local government and decentralization, national reform of the state, rule-of-law, and anti-corruption.

The Peace Corps has about 160 volunteers working throughout Paraguay on projects ranging from agriculture and natural resources to education, rural health, and urban youth development.

The U.S. Department of Defense (DoD) provides technical assistance and training to help modernize and professionalize the military, including by promoting respect for human rights and obedience to democratically elected civilian authorities.

A military training agreement with Asunción, giving immunity to US soldiers, caused concern after media reports initially reported that a base housing 20,000 US soldiers was being built at Mariscal Estigarribia within 200 km of Argentina and Bolivia, and 300 km of Brazil, near an airport which could receive large planes (B-52, C-130 Hercules, etc.)

[5][6] In September 2009 Paraguay's President Fernando Lugo revoked plans for US troops to hold joint military exercises and development projects after stating that he no longer thinks that hosting troops taking part in the US department of defence's "New Horizons" programme was worthwhile.

President Lugo referenced strong regional opposition from countries such as Argentina, Brazil, Venezuela, Bolivia and Ecuador to the expansion of US military bases in Colombia in his decision.