By Daniela Desantis

ASUNCION (Reuters) - Paraguay's new president expects the country to be fully reintegrated into the South American Mercosur trade block next year, and he will ask the group to allow his country to negotiate independent bilateral trade pacts.

In an interview with Reuters on Thursday, President Horacio Cartes said he expects Paraguay to rejoin Mercosur, which includes Argentina, Uruguay, Venezuela and Brazil.

Paraguay, Mercosur's smallest member, was suspended last year after the hasty impeachment of President Fernando Lugo. The bloc has welcomed Paraguay back, but conservative Cartes has been reluctant to accept the offer due to Mercosur's 2012 inclusion of Venezuela.

"The predisposition to allow Paraguay re-entry to Mercosur exists," the millionaire businessman said. "If it is a timeframe you are asking, I'd say very early in 2014."

The country of 6.6 million has long been one of the region's most politically unstable. Lugo was impeached in 2012 following civil unrest. Fellow leftists in the region condemned the impeachment.

Mercosur does not permit member states to enter bilateral trade deals outside the bloc, but Cartes would like to see that change.

"It would also be good if Mercosur members had the independence to look for external markets that are not of interest to the other members," he added.

Cartes, a cigarette and soft drink magnate, won the presidency in April on a pro-business platform that includes modernizing and trimming the state sector, which employs about 10 percent of all workers in Paraguay.

A political novice who never voted before 2009, Cartes has vowed to govern for Paraguay's poor masses.

Brazil said in July it wanted to change the way Mercosur negotiates trade agreements with the European Union to speed up talks that began in 1995. The bloc is trying to revive negotiations with the EU to ink a trade deal that would encompass 750 million people and $130 billion of annual trade.

(Writing by Hugh Bronstein; Editing by Stacey Joyce)


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