A five-day "truce" announced by Argentine unions was received in Asuncion with dismay because, critics pointed out, it solved nothing for the exporters or importers of goods in more than 7,000 containers stranded in Buenos Aires docks.
An unspecified number of the containers are carrying perishable goods, critics said.
Paraguayan officials and diplomats Friday initiated further talks to defuse the crisis after warnings of a political backlash in the two countries' relations and the Mercosur trade bloc went unheeded.
Paraguayan port workers blame their Argentine counterparts for instigating the dispute and accuse the Argentine union leaders of seeking to aggravate the situation as part of a wider plan to take over most of the transport business on the Parana and Paraguay rivers.
The river transport trade extends into Bolivia and Brazil and is considered highly lucrative for the Argentine unions. The Paraguayans argue their jobs will be at risk if the Argentine unions succeed in having a sway over the river traffic.
Argentine union leaders said they blocked Paraguayan container traffic in protest at alleged mistreatment of their Paraguayan colleagues, a charge denied in Asuncion.
Paraguayan union leaders said the Argentine union leaders had the blessing of Argentine government officials in continuing their blockade with the aim of wearing down the opposition. Argentine President Cristina Fernandez de Kirchner said she wanted an amicable and early resolution of the conflict.
A senior spokesman for Paraguayan President Fernando Lugo put the onus on Fernandez when he warned that failure to end the block by this weekend would mean he would stay away from the next Mercosur summit, due to start next Thursday.
Paraguayan Foreign Affairs Minister Hector Lacognata summoned the ambassadors from Argentina, Brazil and Uruguay -- all full Mercosur partners -- to tell them Lugo wouldn't attend the summit or accept the leadership of the organization if things don't change favorably for Paraguay.
"Mercosur in these conditions, makes no sense," said Lacognata, MercoPress reported.
"We believe conditions are not appropriate to continue signing Mercosur agreements and documents until Article 1 of the treaty -- free circulation of goods and products -- is fully complied with," he added.
When asked about Argentine ambassador Rafael Roma's statement the blockade was a "labor conflict" and not a "bilateral conflict," Lacognata said the Argentine government "has the obligation under International law to guarantee free circulation of goods and produce. Things can't be left to the whim of a union; we're talking of foreign trade."
Lacognata indicated the dispute directly affected Mercosur's aim of regional integration. "We demand this conflict be addressed as a Mercosur problem which affects all of its members."
Mercantile transport through Parana and Paraguay rivers handles about 80 percent of all Paraguayan foreign trade.