EU - Mongolia Trade
10.11.2010 / 08:10
The Trade and Cooperation Agreement entered into force in 1993.
The Trade and Cooperation Agreement entered into force in 1993. It was initially concluded for a period of five years and is now tacitly renewed every year. The two Parties accorded each other’s exports most-favoured-nation treatment and engaged themselves to examine appropriate measures to foster trade and economic relations.
Mongolia joined the World Trade Organization on 29 January 1997 and was thus the first TACIS country to develop actively economic relations with the world trading partners. Mongolia’s first WTO-Trade Policy Review (TPR) took place in March 2005. The results were generally very positive. Mongolia was commended for its very significant progress in its transition from a centrally planned to a market-based economy. Mongolia’s efforts to create a favourable environment for FDI resulted in a substantial FDI increase: The investment volume has been increasing dramatically since 2000. The total FDI between 1990 and 1999 was equal to 12.77% of total investments, whereas the total FDI in 2000-2007 was equal to 87.2% of the total 1990-2007 FDI.
For Mongolia, the EU is one of its main trading partners and has lately been quoted as Mongolia’s third-largest trading partner. In 2009, the total trade value between the EU and Mongolia reached EUR 184.3 million, of which Mongolia’s exports to the EU were EUR 44.9 million and EU exports to Mongolia totalled EUR 139.4 million. The main exports from Mongolia to EU are cashmere, wool and related products, EU exports to Mongolia are consisted of mainly machinery and transport equipment, chemicals and related products.
Mongolia has an ambitious trade agenda, with the goal of diversifying and enhancing exports. The EC supports Mongolia’s efforts to create an enabling environment for business, policies aiming at product diversification, and the improvement of product quality. This would help increase Mongolian exports increase the value added of its goods, and at the same time would make Mongolian products more competitive in the domestic market.
Mongolia, eligible since 2006 for the specific General Preferential Scheme for sustainable development and good governance (GSP+), is interested in fully utilising the incentive to further increase exports to the EU. Mongolia is also interested in the identification of possible products for the development of Geographical Indications, as a means of product labeling in the context of its export product diversification strategy.
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