RESTRICTED  
  
WT/TPR/G/297  
15 April 2014  
(14-2331)  Page: 1/17  
Trade Policy Review Body  Original: English  
 
 TRADE POLICY REVIEW 
REPORT BY 
MONGOLIA  
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism (Annex 3 of the 
Marrakesh Agreement Establishing the World Tr ade Organization), the policy statement by 
Mongolia is attached. 
 
 
Note: This report is subject to restricted circulation and press embargo until the end of the first 
session of the meeting of the Trad e Policy Review Body on Mongolia. WT/TPR/G/297 • Mongolia 
 
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  Contents 
1   INTROD UCTION  .......................................................................................................... 4  
2   MONGOLIA AND MULTILATERALISM ........................................................................... 4  
3   ECONOMIC AND TRADE DE VELOPMENTS (2005-2013) ................................................ 4  
3.1   Current Macro ec onomic situation ................................................................................ 5  
3.2   External trade, fore ign direct in vestment ...................................................................... 6  
3.3   Legal and Structural Changes in Exte rnal Trade ............................................................ 10 
4   MAJOR ECONOMIC SE CTORS OF MO NGOLIA .............................................................. 11  
4.1   Mining .................................................................................................................. .. 11 
4.2   Agriculture ............................................................................................................. . 11 
4.3   Industry .................................................................................................................. 12 
4.4   Energy .................................................................................................................. .. 12 
4.5   Communications ....................................................................................................... 12 
4.6   Tr anspor t ............................................................................................................... . 13 
4.7   Construction an d Urban development .......................................................................... 13 
4.8   Banking and finance.................................................................................................. 13 
4.9   Tourism ................................................................................................................. . 14 
5   MULTILATERAL TR ADE COOPER ATION ...................................................................... 14  
5.1   Mongolia and the World Trade Organization .................................................................. 14 
5.1.1   Mongolia and Do ha Development agenda .................................................................. 14 
5.1.2   Agriculture ............................................................................................................ 15 
5.1.3   Non-agricultur al market access ................................................................................ 15 
5.1.4   Services .............................................................................................................. . 15 
5.1.5   Trade facilitation .................................................................................................... 16 
5.1.6   Rules an d regulations ............................................................................................. 16 
5.1.7   Trade Related Aspects of Intellectual Prop erty Rights .................................................. 16 
5.1.8   Special and differential treatment ............................................................................. 17 
5.2   Regional  Cooperation ................................................................................................ 17 
5.3   Free Trade Ag reements (FTAs) ................................................................................... 17 
5.4   Free Trade an d Economic Zones ................................................................................. 17 
6   FUTURE TRADE AND ECONOM IC POLICY DI RECTIONS .............................................. 17  
 
Charts 
 
Chart 3.1 GDP growth  rate, 2005- 13 ................................................................................... 5  
 
Tables 
 
Table 3.1 Foreign tr ade turnover ......................................................................................... 6  
Table 3.2 Main part ner countri es ......................................................................................... 7  WT/TPR/G/297 • Mongolia 
 
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  Table 3.3 Mongolian expo rts, by co untries ............................................................................ 8  
Table 3.4 Mongolian impo rts, by co untries ............................................................................ 9  
Table 3.5 Foreign dire ct investment ..................................................................................... 9  
 
 WT/TPR/G/297 • Mongolia 
 
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  1  INTRODUCTION 
1.1.  Mongolia joined the World Trade Organization in 1997, will have equal rights to trade with 
many countries of the world wide, was contribute to the decision-making in their global trade and economic cooperation. 
1.2.  This is the second trade policy review of Mongolia and the main objectives of which are, to 
bring to the attention of the Members the major results and changes that occurred in trade policy 
within the reporting period, as well as the current economic and trade situation of the country, 
issues, constraints and policy directions in the future. 
1.3.  The Government believes, that the review shall play an important role in determining and 
bringing the economic development objectives to the right path, in coherence with rules and regulations of the WTO. 
1.4.  This report attempted to reflect current economic liberalization issues, external trade and 
foreign direct investment (FDI) environment and structural changes therein, changes in major economic sectors, multilateral and bilateral trade situation and trends and directions in trade and 
economic development.  
2  MONGOLIA AND MULTILATERALISM 2.1.  The Government of Mongolia consider that multilateral trading system plays an important 
role in economic development and bringing the living standards of the population up, especially for 
Mongolia, 37.1% of the GDP of which account for exports.  
2.2.  Mongolia has been implementing liberal trade policies and does not belong to any regional 
trade and economic agreements. The Government of Mongolia studies the possibilities of acceding 
to and/or initiating any such multilateral and bilateral agreements. As such Mongolia has 
successfully concluded the negotiations with all participating States for its accession to the Asia-Pacific Trade Agreement (APTA) and star ted the negotiation of an Economic Partnership 
Agreement with Japan.  
2.3.  The Action Plan of the Government of Mo ngolia for 2012-2016 set to thoroughly study the 
possibilities that arise from regional cooperatio n agreements, possible accession to APEC and other 
similar agreements, as well as to increase Mongolia's role in regional development, promote and 
intensify trade and investment cooperation wi thin the region and to negotiate free trade 
agreements with trading partners.  
3  ECONOMIC AND TRADE DEVELOPMENTS (2005-2013) 
3.1.  Mongolian economy has recovered significantly, after global financial and economic crisis 
in 2009. In 2006-2008, the economy grew significan tly, due to the increase of world gold and 
copper prices. In 2009, commodity price decline has led to a significant decline in real GDP. The 
increase in the trade deficit led to a depreciation  of the exchange rate and the banking sector's 
non-performing loan ratio has risen. A combination of support from the International Monetary Fund through a Stand-By-Arrangement and donors as well as a rebound in copper prices was 
effective in reversing the deterioration in the trade balance, stabilizing the currency, and providing 
much needed budget support.  WT/TPR/G/297 • Mongolia 
 
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  Chart 3.1 GDP growth rate, 2005-13a 
-505101520
2005 2006 2007 2008 2009 2010 2011 2012 2013%
 
a Preliminary data.  
Source: National Statistical Office.  
3.2.  Parliament of Mongolia adopted the Law on the Development Bank of Mongolia in 2011 
created legal environment for the Bank. The Development Bank of Mongolia was established to 
support economic growth and finance development projects with strategic importance such as "New Construction" mid-term target program, State policy on Railway transport, Sainshand 
industrial complex.  
3.3.  In the past few years, the Government paid more attention to develop mining sector, 
commercialize mineral raw materials and started its exploit major gold, copper and coal deposits. 
For example: The Investment agreement was signed to use Oyu Tolgoi copper and gold deposits 
in 2009.  
3.4.  For the first time, Mongolia issued Go vernment guaranteed securities of Mongolian 
Development Bank equal to 7.4% of GDP on the international financial markets successfully.  
3.5.  Development Bank of Mongolia issued its first Samurai bond that will be backed by a 
guarantee from the Japan Bank for International Cooperation (JBIC).  
3.6.  In order to create a legal environment for the Secondary market, a draft 
"Law on Asset-backed securities" and amendments to other relevant laws developed and approved 
by the Parliament in 2010. 
3.7.  The government sold a US$500 million tranche as a five-year bond with a yield 
of 4.125%, and another US$1 billion tranche at 5.125% successfully to the financial institutes.  
3.8.  Within framework of implementation of State policy on food, agriculture and light industry to 
enhance sustainable economic growth, increase in vestment in the sector and mature the market 
system and create favorable environment, related la ws such as "Law on legal status of Industrial 
and Technological Park", "Law on agricultural  commodity exchange", "Law on custom tax 
exemption", "Law on Value-added tax exemption" , amendments to the "Law on agriculture", 
"Law on personal income tax", "Law on value added tax" are approved.  
3.1  Current Macro economic situation 
3.9.  In 2013, Mongolian economic growth has reached 11.7% compared with previous year and 
an inflation rate was 12.5%, the unemployment rate was 7.6%, GDP per capita reached US$3,972 
and increased by 22.7% compared with previous year. The foreign trade balance was a deficit of 
US$2,082 million, decreased by 13% compared to 2012. Trade sector produced 17.4% of total 
GDP and accounted 12.4% of workforce and its considered as high workforce absorbing sector. Thus, trade sector plays significant role in employment and national workforce development.  WT/TPR/G/297 • Mongolia 
 
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  3.10.  Intensifying economic development-means structures funded by Chingis bond and 
Development Bank continuing public investment e nhanced construction work and it has increased 
by 2.6 times from the previous year. It is expect ed to support further economic growth in coming 
years.  
3.11.  Promoting development of the private sector has been one of the key objectives of the 
Government of Mongolia. In order to improve the legal environment, to direct Public- and Private 
partnerships for economic development, the Concession Law was adopted in 2010. The 
Government implemented actions such as promote private investment in infrastructure projects, 
transfer some of the Government functions to th e non-governmental organizations, professional 
association. A particular attention was paid to privatization of state-owned enterprises and privatization guidelines for 4 years have been planned.  
3.2  External trade, foreign direct investment 
a. Foreign trade 
3.12.  By becoming the Member of the WTO in 1997, Mongolia has chosen the path of multilateral 
trading system and made its principles the en gine for development. Mongolian foreign trade 
turnover 92.3% to compared with GDP in 2013. Th is shows that the country's economy is still 
heavily depend upon external trade. Therefore, it  is important for the country like Mongolia land-
locked in-between the two giant states, to correctly  identify and accurately implement trade policy. 
The choice of multilateral trading system and its principles, on the basis of which the pursuance of a more liberal trade policy in general has had positive reflection on the economy.  
3.13.  The total trade turnover of the country accounted for US$10,627 million in 2013, that is 
compared to that of 2005 the increase by 4.7 times. 
3.14.  Although the total trade turnover has stead ily been increasing, trade remains in deficit for 
the whole period except for 2006. For instance, trade deficit in 2007 accounted for US$221 million, 
in 2013 US$2,082 million and which compared to the 2007 increased by 9.4 times. The reasons 
lying behind the increase of trade deficit over years, on the one hand trade dependency on few 
export commodities, high percentage of raw materials in exports, heavy dependency of these raw 
materials on world market prices caused the trad e deficit, on the other hand due to investment, 
there are significant increase of importation of equipment and machinery and mechanism.  
Table 3.1 Foreign trade turnover 
(US$ million) 
 2006  2007  2008  2009  2010  2011  2012  2013a 
Total turnover : 3,028.4 4,119.3 5,779 4,023.1 6,108.6 11,415.9 11,123 10,627 
Export 1,542.8 1,949.1 2,534.5 1,885.4 2,908.5 4,817.5 4,384.6 4,272.6 
Import  1,485.6 2,170.1 3,244.5 2,137.7 3,200.1 6,598.4 6,738.3 6,354.6 
Balance 57.2 -221 -710 -252.3 -291.6 -1,780.9 -2,353.7 -2,082 
a 2013 preliminary.  
Source: Statistic of Customs General Administration.  
3.15.  In 2013, Mongolia trade with 135 countries. The PR of China, Russian Federation, 
the United States, Canada, the EU, Republic of Korea and Japan are our main trading partners, accounting for 90% of total foreign trade turnover.  
3.16.  Table 2 below shows our major trading partners and their share in total trade.  WT/TPR/G/297 • Mongolia 
 
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  Table 3.2 Main partner countries 
(%) 
 2006 2007  2008  2009  2010  2011 2012 2013a 
The PR of China 48 51 44 48 56 57 53 52 
Russian Federation  20 20 23 21 18 15 17 15 
U.S 5 4 3 3 3 5 5 5 
Canada 6 5 3 4 3 2 2 2 
EU 7 7 12 12 7 7 7 9.3 
Republic of Korea 3 4 4 4 3 3 4 5 
Japan 3 4 5 3 3 4 5 4 
a Preliminary data.  
Source: Statistic of Customs General Administration.  
3.17.  In order to make the customs procedures more appropriate, the Customs and the Customs 
Tariff Laws were revised in 2008. In 2012, the Law on Customs was amended in order to reduce 
number of documents required for customs clearance. Total of 8 documents reduced to 4 documents. The web based CAIS system was used since 2010, which is facilitated a more simplified and speedy customs clearance procedures. As well, a "one-stop" service principle was 
introduced to fasten the customs services and to reduce the bureaucratic ladder for businesses.  
3.18.  The national standards are adopted by the National Standards Council on the basis of 
consultation between the Government, producers, businesses and the consumers. The Law on 
Standards and Conformity Assessment was renewed in 2008 to ensure the compliance with the 
WTO Agreement on Technical Barriers to Trade.  
b. Mongolia's bilateral trade relations 
3.19.  Russian Federation, The PR of China and th e United States, and the European Union and the 
Republic of Korea and Japan are the major trading partners of Mongolia. More than 70% of our total foreign trade accounts for trade with the Russian Federation and the PR of China. The main export products of Mongolia to Russia are mainly products of animal origin and minerals, including 
horse meat, fluorspar and copper concentrates and gold and to The PR of China are coal, iron ore, 
copper and molybdenum concentrates, wool, cashmere, hides and skins.  
3.20.  The share of the U.S. in the country's tota l trade was about 5% as at the end of 2013, that 
is compared to 2005 is the increase by 2.8 times. However, since 2010 there was no export has 
made to the U.S. Mongolian imports from the U.S. machinery and equipment such as bulldozers, levelers, truck and air transportation equipment. In September of 2013, Mongolia and the U.S. 
signed an Agreement on Transparency in Matters Related to International Trade and Investment to 
increase further bilateral trade and investment. The Government of Mongolia believes that, mutually committed to ensure transparency in trade and economic relations between the two countries will lead positive steps.  
3.21.  Trade with the EU accounts for about 9.3% of our total trade. In 2013, trade between 
Mongolia and the EU increased by 3.2 times, compared to 2005. Gold, textiles and cashmere goods are the main export goods of Mongolia to the EU. From 2006, Mongolia became eligible for 
GSP+. However, due to technical barrier and requirements and high standards, trade deficit 
in 2005 was US$26.1 million and reached US$702 million in 2012. The objectives in bilateral trade 
cooperation with the EU in the near future include the registration of Mongolian traditional export 
goods as geographical indications, as well as increasing export products.  
3.22.  Japan and Republic of Korea accounted fo r around 10% of our total sales. In 2005, trade 
with Republic of Korea is 6% of our total foreign trade turnover has dropped to 5% in 2013. In 2006, trade between Mongolia and Japan was 3% of total trade turnover and has increased to 
5% in 2013. There remain enough constraints in  the increase of Mongolian exports to these 
countries as their tariffs and import requirements for animal products are still very high. Mongolia launched Negotiation of Economic Partnership Agr eement with Japan in 2012, as a result of the 
agreement, trade turnover between two countries, especially export to Japan expected to increase.  
3.23.  High costs for transportation through the territories of the Russian Federation, as well as of 
the PR of China and other obstacles in transportation make the transit transportation costly, thus WT/TPR/G/297 • Mongolia 
 
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  difficult to access the markets in the EU, the U.S. , Japan and the Republic of Korea. Taking this 
into consideration, expediting the negotiations of the tripartite Agreement on Transit Transportation between Mongolia, Russian Federation  and The PR of China is more than important 
for the country. Addressing these problems also requires additional technical assistance.  
c. Exports 
3.24.  Mongolian exports are composed of few items, namely minerals such as copper, 
molybdenum and fluorspar concentrates and gold, coal, crude oil, natural stones, textiles and 
animal originated raw materials such as wool, cashmere, hides and skins, meat and intestines.  
3.25.  Exports of mineral products was 42.7% in 2005, increased to 81.8% in 2013. Exports of 
Non-mineral products was 57.3% in 2005 and has been constantly declining and reached 18.2% in 2013.  
3.26.  The country's main export destinations are The PR of China, Canada, European Union, 
Russian Federation and Republic of Korea.  
Table 3.3 Mongolian exports, by countries 
(%) 
Country 2006  2007  2008  2009  2010  2011 2012 2013a 
The PR of China 68 72 65 74 85 92 93 87 
Canada 11 9 7 8 5 2 3 3 
EU 6.2 5 1.6 1.2 0.2 1.7 1.1 6.7 
Russian Federation 3 3 3 4 3 2 2 1 
Republic of Korea 1 2 1 1 1 1 0 0 
a Preliminary data.  
Source: Statistic of Customs General Administration.  
3.27.  With the purpose of increasing exports and their diversification, taxes are eliminated on 
exports of metal scraps and raw cashmere. Law of customs duty rate imposed on some goods 
amended in 2005 and 2009. Currently export tax on  male and female camel wool and wood, sawn 
has been continuously implemented, in order to protect forest wood and to retain camel wool, which is main raw material to make rope which encircles the ger (nomadic herder home).  
3.28.  Some of the Mongolian export items enjo y preferential tariffs under the GSP schemes of 
the U.S., the EU, Canada, Japan and Russian Federation. From 2014, Mongolia is eligible to "GSP Plus" of European Commission on sustainable development and good governance, and around 
7,200 products may be exported to European Union member countries duty-free for 10 years and 
it enhance a possibilities, that our export products to access to the EU market.  
3.29.  The Government aims to pursue the trade policy that would facilitate the one-sided 
structure of exports. Within this framework, the objectives are to diversify exports, promote new 
products, improve their competitiveness, reduce tr ade barriers, develop business relations with the 
South and North Eastern Asia and Europe, as well as actively work towards including more Mongolian products in the GSP schemes of developed countries.  
d. Imports 
3.30.  The country's imports are more diverse and less centralized compared to its exports. For 
instance, in 2013, heavy machinery, equipment, el ectrical appliances counted for 8.6% of total 
imports, fuel 20.7%, vehicles 12.5%, textiles 10.4% and food and foodstuffs 7.7%. The imports of 
these goods account for more than 60% of total imports. 
3.31.  From 2002, the current tariff rate of 5.0% was imposed, which compared to many countries 
is a fairly low level and this shows that the country is committed to more liberal trade. On the 
other hand, such a low tariff is followed to prom ote the capacity of producers and traders to allow 
them to compensate for high transit transportation  costs. In other words, higher import duties 
would particularly increase the consumer prices, thus make the supply of food and consumer 
goods difficult to access. The Government aims to impose differentiated import duties in order to WT/TPR/G/297 • Mongolia 
 
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  promote domestic production, encourage the transfer of advanced technology, as well as for the 
concerns related to food security and better quality foodstuffs. 
3.32.  The share of imports in the GDP in 2008 accounted for 57.7% and in 2013 it increased 
reaching 66.5%. 
3.33.  The main importing countries to Mongolia are the Russian Federation, the PR of China, 
the EU, the Republic of Korea and Japan. Imports from the above five countries account for more than 80% of the total imports in 2013.  
Table 3.4 Mongolian imports, by countries 
(%) 
Country 2006  2007  2008  2009  2010  2011 2012 2013a 
Russian Federation 37 34 38 36 33 25 27 25 
The PR of China 28 31 28 25 30 31 28 28 
EU 8.2 10.1 9 11.6 11 11.1 11.2 11.08 
Republic of Korea 6 6 6 7 6 5 7 8 
Japan 7 6 7 5 6 7 7 7 
a Preliminary data.  
Source: Statistic of Customs General Administration.  
e. Foreign Direct investment (FDI) 
3.34.  Law on the Regulation of Foreign Investme nt in Business Entities Operating in Sectors of 
Strategic Importance enacted in 2012, caused sign ificant decrease of investment. New Investment 
Law, which is approved in 2013, has replaced the controversial Law of Mongolia on the Regulation of Foreign Investment in Business Entities Operating in Sectors of Strategic Importance and has 
made it easier for foreign investors to invest in Mongolia. The law on Investment provides a 
general regulation for both Mongolian and Foreign investors not classifying as local and foreign. In the scope of the law, investors will be guarante ed with stabilized tax environment if invested 
MNT10 billion. Moreover, an investor will be issued a Tax Stabilization Certificate for projects over 
MNT15 billion, conforming with economic development, introduced eco-friendly new technologies, increase of employment and the Government of Mongolia believes, it creates favorable condition to 
promote FDI.  
Table 3.5 Foreign direct investment 
(US$ million) 
 Share 
in FDI 2006 2007  2008  2009  2010  2011 2012 2013.10a 
Total 
amount 34.4 366.54 499.96 708.92 801.15 1,025.9 4,986 3,198.7 1,076.1 
The PR of 
China 71.31 172.01 339.61 497.8 613.06 176.04 1,015.2 243.19 30.9 
Canada 7.44 72.18 0.5 2.74 1.03 147.81 72.28 18.62 7.1 
Republic 
of Korea 6.35 16.43 22.99 41.77 31.67 38.76 54.97 54.02 14.4 
Japan 3.12 4.73 2.45 46.62 5.59 7.13 21.46 34.24 12.9 
USA 5.93 37.17 4.29 6.47 2.57 13.91 127.23 62.59 2.7 
Russian 
Federation 5.84 11.65 39.77 3.8 6.14 2.27 58.01 129.58 1.8 
a 2013 preliminary.  
Source: Information provided by MED.  
3.35.  In 2012, foreign direct investment has reached US$3.2 billion and it declined by 33.6% 
to US$1 billion in 2013.  
3.36.  To protect and promote FDIs, the Governme nt has concluded Agreements on the Promotion 
and Mutual Protection of FDIs with about 43 countries and Agreements on the Avoidance of Double 
Taxation with 24 countries.  WT/TPR/G/297 • Mongolia 
 
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  3.37.  Mining, information and technology, agricultural production and tourism have been 
identified by the Government as priority sector s for development and FDIs. The imports of some 
equipments and heavy machinery in these sectors enjoyed customs and VAT tax exemption.  
3.38.  The Government considers FDI as an import ant thrust in the economic development of the 
country. In reaching its objective to ensure ec onomic growth, the Government in its Action 
Programme stated to create an environment that protects FDIs. Within the framework of this Programme, a policy that creates incentives for both foreign and domestic investment and a more 
stable legal environment, attracts new sources of FDIs, as well as to ensure a more effective use 
of FDIs will be carried out.  
3.3  Legal and Structural Changes in External Trade 3.39.  Since its accession to the WTO, the Go vernment has undertaken a number of measures 
directed towards refining and making trade laws  in line with the WTO rules, regulations and 
requirements. the Trademarks and Geographical Indications Law, Customs law, Land law, The 
Insurance Law, Company law, General tax law, Investment law, the Food Law were recently 
adopted. Also, necessary amendments were made to the licensing law, the Minerals law, the 
Environmental protection law, the Customs tariff  law, the Bankruptcy law, the VAT Law, the 
Accounting Law, the Excise Tax Law, the Pate nt Law, the Standardization and Conformity 
Assessment Law, the Labor Law, the laws on the Legal Status of Altanbulag and Tsagaannuur Free 
Trade Zones, the Free Zone Law.  
3.40.  The Parliament Resolution No. 5 of 1998 on  the "List of goods prohibited to cross the 
borders and the goods subject to non-tariff regulation" and the Government Resolution No. 219 of 
2002 on the "List of licensed goods", together with this "Regulation on export and import licensing 
of goods subject to state control" set the list of prohibited goods and goods allowed for import and export with licenses. In accordance with the Re gulation, breeding animals, rare and very rare 
animals, raw materials there from, semen of anim als, cultures of micro-organisms, uranium and 
thorium ores and concentrates, poisonous chemical s, human blood and organs for therapeutic and 
prophylactic purposes, explosives and guns are subject to licensing. Licensing is carried out by 
sectoral ministries. In order to create genetically modified organism, use and enter into the 
country cross border, ensure bio security within te rritory "Law on Genetically modified organism" is 
adopted in 2007.  
3.41.  According to the current regulations, ther e are 901 types of licenses issued by sectoral 
ministries and working group headed by Cabinet Se cretary, is working on formulating proposal to 
make some amendments to the related laws and regulations to eliminate 367 unnecessary 
licenses.  
3.42.  A number of projects implemented in trade and industry fields in the last years with the 
financial assistance of international organizations and donor countries, including the UNDP on trade and human development, GIZ on enhancing capacity of bilateral negotiations, USAID on 
Economic policy reform and its competitiveness. Also Mongolia has been actively participated 
meeting and programs organized by CARE C and ESCAP and expressed its position. 
3.43.  Mongolia has set up bilateral intergovernmental foras in the form of committees and 
roundtables with some of its trading partners to discuss relevant issues concerning trade, 
economic, cultural, scientific and technical cooperation. For instance, such committees are 
established with the Russian Federation, the PR of China, the EU, Bulgaria, Hungary, the Czech 
Republic, Austria, Finland, the Republic of Korea,  France, India, Kazakhstan, the Kyrgyz Republic, 
Ukraine, Belarus, Viet Nam, Cuba and Turkey and with the UK, Canada and the DPR of Korea 
discussions are organized as roundtables.  
3.44.  On the purpose of establishing an institutional framework in order to increase Mongolia’s 
export revenues, ensuring proper structure for foreign trade, supporting exports and providing 
efficient funding for export activities, Export Pr omotion Program is adopted in 2013 and started its 
implementation.  
3.45.  A specific attention was paid by the Government to the importance of the private sectors 
participation in developing and formulating trade policy. With the purpose of creating partnership WT/TPR/G/297 • Mongolia 
 
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  and cooperation between governmental and non-governmental organizations and enhance active 
participation on formulating promotion policies on industry, service and investment, close cooperation is maintained between the Mongolia n National Chamber of Commerce and Industry, 
the Mongolian Employers' Federation and other professional associations.  
4  MAJOR ECONOMIC SECTORS OF MONGOLIA 
4.1  Mining 4.1.  Mining is one of the major sectors that plays an important role in the economy of the 
country. As of 2013, the share of the sector in the GDP accounts for 28%. 
4.2.  Since 2005, there was a substantial changes in the structure of minerals exports and in 2009, 
26.64% of exports were copper concentrate, 17.7% - gold, 16% - coal, 6%- crude oil and in 2013 22.2% were copper concentrate,7.3% - gold, 26.1%- coal and 12.1%- crude oil, 15.3%-iron ore 
etc.  
4.3.  To develop private sector driven, transpar ent, responsible mining sector and in order to 
create balanced diversified economy in short and medium term, Mining sector policy until 2025 
adopted by Parliament resolution No. 18, 2014. The Government set out the policy and directions 
in mining sector and have been organizing Annual Investment forum such as Coal-Mongolia and Metals-Mongolia since 2009, in order to attract and increase investment in geological and mining 
sector. As a result of a number of specific measures , investment in the sector in the last four years 
has increased by about 3.4 times.  
4.4.  Government of Mongolia aims to establish Oil refinery based domestic crude oil deposit. 
Within framework of this objective, export crude oil mined from oil deposit to the PR of China and 
in return for importing petrol “Mongol 93”, centralize export revenue from crude oil to state 
budget, increase production of crude oil year by  year. In 2013, mined 5.42 million barrel crude oil 
and exported 5.13 million barrel crude oil, prod uction increased by 38% and export increased 
by 43.5%.  
4.5.  Mongolia supplies its domestic demand by 100% imports and 1,408 thousand ton petroleum 
products imported in 2013 and is 15.2% increased compared to the previous year. In 2013, 74.7% 
of petroleum products imported from Russian Fede ration, 8.5% from Belarus, 7.4% from Republic 
of Korea, 1.7% from Malaysia, 5% from the PR of China, 1% from Lithuania and 0.7% from Kazakhstan.  
4.6.  There are 22,629.8 hectare land is registered as damaged due to mining operation. In 2013, 
technical restoration in 10,878.4 hectare land, biological restoration in 4,812.6 hectare has made 
and spent MNT68.7 billion. In the future, a particular attention is to be paid to environmental rehabilitation of mining areas, the increase of minerals' exports, the increase of oil extraction and 
the creation of processing capabilities of crude oil.  
4.2  Agriculture 4.7.  The main foundation of Mongolia’s econ omy, pasturing livestock husbandry plays an 
important role in the economy, employment and export revenues of Mongolia. For the preliminary 
estimates of 2013, 27.9% of GDP was produced by the agriculture sector, of which 77.5% accounts for livestock husbandry. As well, 35.0% of total labor force of the country is engaged in the agricultural sector and 7.0% of export income is contributed by the agriculture sector. 
Production of livestock husbandry industry for 2013 preliminary estimates was MNT2,531.2 billion 
at 2005 constant prices. Compared to 2012, it increased by 27.9% at current prices, by 13.5% at constant prices.  
4.8.  In 2013, in total 45.1 millions livestock he ads were counted, grown by 4.2 million heads or 
10.3% compared with the previous year.  
4.9.  The Government proclaimed Year 2008 as "Year of Food supply and security" and aimed to 
ensure a self sufficiency of major stable food pr oducts such as meat, milk, wheat flour, potatoes 
and vegetables. Within framework of the food security goals, "A third National Crop rehabilitation" WT/TPR/G/297 • Mongolia 
 
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  campaign was launched. As a result of this campaign, in 2013, 80% of domestic demand of wheat, 
100% of potatoes, 54.9% of vegetables supplied by domestic harvest.  
4.10.  In 2003, the Government adopted the "Food  and Agriculture Policy" until the year 2015, 
which aims to create a better economic and business environment, increase production capacity 
and capability, ensure stable development and growth of livestock, crop and food sectors, produce 
a more ecologically clean and safe foodstuffs and improve their quality and distribution. A detailed work-plan was developed to ensure the implementation of the policy, which is being monitored. 
Law on Food products and food security was adopted in 2012.  
4.3  Industry 4.11.  The total output at current prices of the industrial sector was MNT7.3 billion in 2013 and 
was increased by 7.3% compared with 2012.  
4.12.  In order to strengthen competitiveness of products, introduce modern management, 
techniques and technology in priority sectors such as mining, meat, wool, cashmere and hides and skins processing industries, various concepts an d programmes such as “State policy on food and 
agriculture sector" (2003), “State policy on minerals" (2014), “State policy on Petroleum sector 
until 2017" (2011) have been implemented and positive results have occurred in the development of the industrial sector.  
4.13.  The Government's policy in the industrial se ctor is directed towards the implementation and 
establishment of free economic and trade zones, industrial parks to promote small and medium-
sized enterprises (SMEs), expansion of micro-cred it system and promoting the use of industrial 
machinery and equipment via soft loans and leasing.  
4.4  Energy 
4.14.  Within framework of major restructuring of the Energy sector, enhance 
Public-private-partnership in order to ensure stable operation and supply national energy demand, 
which is increasing constantly, "Energy law" wa s amended in 2011. With Technical assistance of 
ADB, renewing of "Energy sector system" progra m is started based on revised "Energy sectors 
development plan". "Law on Energy saving" is dr afted in order to create mechanism to promote 
energy efficiency and energy saving.  
4.15.  Importation of electricity was 156.5 million Kwt/h in 2009, it reached 393 million Kwt/h in 
2013 and mostly imported from Russia. Share of im ported electricity was 8% of total consumption 
and Power plant based on coal deposits is planned, for instance in Tavantolgoi power plant with 
capacity of 450 MWatt in near future.  
4.16.  Within framework of the implementation of Law on Renewable Energy adopted in 2007, 
“National Renewable energy program (2005-2020)”, policy is followed to promote production of 
renewable energy. Renewable energy resource prov ide 8% of total energy supply by its capacity 
and 2% energy production. According to the “N ational Renewable energy program (2005-2020)”, 
the Government of Mongolia has set the target to increase electricity generation from Renewables 
20-25% by the year 2020. Wind power plant with 50 MWatt capacity in Salhit is operating 
properly.  
4.5  Communications 4.17.  The establishment of Information an d Communication Coordi nation Committee was 
established in addition to several measures such as liberalization of the information and 
communication sector, promotion of fair competition and establishment of public service fund. The Committee carries out such activities as issuing of licenses, eliminating restrictions, deepening the 
openness of the market, promotion of fair competition.  
4.18.  The medium-term development strategy within the Information technology sector has been 
developed and implemented in 2013. Moreover, programs such as "National e-Governance 
Program," and "National broadband network," and "Radio and television broadcasting to digital 
transfer" are also being implemented.  WT/TPR/G/297 • Mongolia 
 
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  4.19.  Taking into account the rapid enhancement of various services based on information 
technology the "Law on E-signature", was adopte d in 2011. Also "Law on Information Security", 
"General Law on Information Technology", "Law on E-agreement", as well as "Law on E - governance" have been drafted. Citize ns are provided with the opportunity to follow 
the activities of the Government and to participat e in drafting of laws by giving their comments 
through open government website on www.zasag.mn  operating within the framework of the law.  
4.20.  As a result of the above mentioned measures and introduction of new technologies into the 
communication sector the income of communication service increased dramatically in the few last 
years, reaching MNT563.1 billion in 2012, which 22.7% increase in comparison with the previous year. The number of mobile telephone users has in creased reaching 3.4 million in 2012. This is an 
increase of 4.4% comparing to 770 thousand which was calculated in 2006. The number of 
internet users has also increased continuously and reached 696 thousand subscribers in 2012 
which is 50% increase compared to the previous year.  
4.6  Transport 
4.21.  As of today, Mongolia has signed 7 international convention and inter-governmental 
agreements on transportation with 8 countries such as Kazakhstan, Ukraine, Russian Federation, DPR of Korea, Turkey, Belarus, Kyrgyzstan and The PR of China.  
4.22.  Transit-Mongolia program is adopted by Government resolution No. 183 of 2008, in order to 
developing transit transportation and logistics, by using its geographical advantages, based on market demands, with the active participation of private sector and foreign investors.  
4.23.  Mongolia has concluded agreements on the utilization of Mongolian air space with 
34 countries and with EU and 43 foreign air companies and provided flight administrative services 
and ensured safety.  
4.24.  Mongolia is geographically a bridge between two giant countries. Thus, Mongolia aims to 
create a reliable, inexpensive, efficient road  and transportation network by developing 
international transport corridor.  
4.7  Construction and Urban development 
4.25.  Construction and maintenance work has increased steadily since 2006. For example, the 
construction and maintenance work performed in 2006 was MNT266.8 billion and has increased to MNT1,452.2 billion in 2013 which is a growth of 5.4 times.  
4.26.  The "Law on Construction" and the "Law on Water Supply of Urban Area and Utilization of 
Cleaning Pump" and "Law on Addressing" were adopted in 2008, 2011, and 2013 respectively. 
Package of Law on Land is drafted. Amendments to the "Development plan for Ulaanbaatar city 
until 2020", "Development guidelines until 2030" "Regulation on addressing streets, roads, 
immovable properties" adopted by Government resolutions.  
4.27.  Currently there are 3,181 licensed construction companies of which 52 are foreign invested 
companies.  
4.28.  The Government of Mongolia aims to ensure  conditions of secure and convenience living by 
increase efficiency of policy on construction mate rials, urban development, land relations, geodesy 
and housing.  
4.8  Banking and finance 
4.29.  As of 2013, there are 12 banks operating in the banking sector. Local currency deposits rose 
by 19.8% at the end of 2012 compared to 2011, due to increased citizens deposits by MNT522.6 billion.  
4.30.  The banking sector accounts for 95% of the country's financial sector. Thus, gross domestic 
product growth in the financial sector relies on the growth of the banking sector. The gross WT/TPR/G/297 • Mongolia 
 
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  domestic product of financial sector was 143.6 billion in 2010 which has increased two times in the 
following two years adding up to 277.0 billion in 2012.  
4.31.  As a result the stability in the financial sector and other positive trends strengthening bank 
activities in accordance with international stan dards and public transparency, as well as methods 
of inspecting measures such as implementation of monetary policy are clear within the outcome.  
4.32.  At the end of 2012, 329 companies were registered at the Mongolian Stock Exchange, 52 of 
which are state-owned companies and 277 private companies.  
4.33.  State Property Committee, the Mongolian Stock Exchange and the London Stock Exchange 
have created the "Master contract" in order to reform capital market. In 2012, the Millennium IT commercial system was installed and implemented in order to assemble international standards and capital market infrastructure. The Millennium IT is used by London Stock Exchange and other 
major exchanges commercial centers.  
4.9  Tourism 4.34.  The Government of Mongolia prioritizes the tourism sector as Mongolia's development goals 
and inter-sectoral coordination and management of development, infrastructure development, 
pursuing policies aimed at ensuring international standards of service quality.  
4.35.  The number of tourists in Mongolia was 386 thousand in 2006, and increased 
up to 417 thousand in 2013 with the average annua l growth rate of 9% within the last 10 years. 
Tourists are mainly interested in Mongolia's natural environment, traditional cultures, as well as the history of Chingis Khaan.  
4.36.  As of 2013, there are 212 tour operators, 400 hotels and 349 tourist camps operating in 
Mongolia and of which 85 are foreign invested companies.  
4.37.  Mongolia is a member of the World Tourism Organization and facilitates tourism and tourist 
receptions to eliminate encountered obstacles, ensu re the safety of tourists and tourism industry 
in order to improve the legal environment. Cooperation in the tourism sector with 
intergovernmental agreements have been signed wi th the PR of China, Republic of Korea, India 
and Kyrgyzstan.  
4.38.  The Government of Mongolia is planning specific measures to undertake in order to preserve 
national, historical and cultural heritage, develop of environmentally friendly tourism policy, and create international - class tourist complexes and their essential services.  
5  MULTILATERAL TRADE COOPERATION 
5.1  Mongolia and the World Trade Organization 
5.1.  Mongolia has continuously been encouraging multilateral trading system. Mongolia has, in the 
past, pursued a more open and liberal trade polic y, eliminating step-by-step trade barriers by 
cutting high tariffs and reducing non-tariff measures. Although these measures resulted in the 
increase of the number of our trading partners and the advantage for Mongolia to trade with other countries on MFN-basis, our trade deficit does not decrease. This, in major part, is related to the 
high tariffs and tough non-tariff measures maintained by our trading partners. As such, due 
attention was paid to the use of advantages of multilateral trading system and strengthening the national capacity. Despite the successful im plementation of a German-funded project on 
International Trade Policy/WTO, considering the complexity of the WTO agreements, additional 
technical assistance is required to ensure the full implementation of the agreements.  
5.1.1  Mongolia and Doha Development agenda 5.2.  The Government of Mongolia is convinced that trade liberalization plays and should play a 
vital role in improving the living standards of no t only Mongolians, but the world population as a 
whole, and fighting poverty and positively affect the development of all countries. From this point of view, the Government is working to make the necessary contribution to successful WT/TPR/G/297 • Mongolia 
 
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  implementation of the Doha Development Agen da. Government of Mongolia thinks, every 
members contributions is necessary to bring forward stuck negotiations. Mongolia actively participate G-33, Small, vulnerable economies (SVEs), Recent new members (RAMs) groups and expressed our interests.  
5.1.2  Agriculture 
5.3.  Agriculture as one of the essential components of the DDA is an influential part in building a 
fair trading system. Agriculture, specifically livestock, is the major economic sector of the country. 
Therefore, the Government attributes major importance to the liberalization of trade in agriculture. 
In the past, the Government has eliminated export subsidies and domestic support systems in the sector and imposed a single tariff of 5% across the board, except for certain strategic goods, on which seasonal tariffs are followed. The support measures have been taken within the framework 
of the Green Box and the Agricultural Agreement requirements.  
5.4.  High tariffs, strict sanitary requirements, as well as huge export subsidies and domestic 
support provided to the sector by the develope d and the developing countries create unnecessary 
barriers to access their markets and increase agricultural exports of developing countries. It is 
more than necessary to take measures directed towards improving the quality of agricultural products of mainly developing countries, thus incr easing their competitiveness. For this purpose, 
more technical assistance is sought from donors. In addition, a joint effort is called to make the 
unnecessary barriers to trade, in terms of stan dards and other requirements, appropriate.  
5.5.  Mongolia, as developing country has been supporting the non-trade related issues as food 
safety, agricultural development and environment protection and Mongolian delegation attended 
the Ministerial meetings, meeting of "G-33" grou p and the Landlocked countries to express the 
position in recent changes in the negotiations of Doha, approach to continue the negotiations, which took place in 2009, 2011, and 2013.  
5.1.3  Non-agricultural market access 
5.6.  The Government of Mongolia is in support of "negotiations, which shall aim, by modalities to 
be agreed, to reduce or as appropriate eliminate tariffs, including the reduction or elimination of 
tariff peaks, high tariffs, and tariff escalation, as well as non-tariff barriers, in particular on 
products of export interest to developing countries" as stipulated in the Doha Declaration. Mongolia, despite the deficit of its budget, within its commitments and to comply with the WTO agreements, maintains a single duty rate of 5% on almost all products across the board that is a 
fairly low rate compared to other countries and it is of the position to cut the tariffs in 
differentiated form for non-agricultural goods, in other words, high tariffs should be subject to 
more reduction.  
5.1.4  Services 
5.7.  Since its accession to the WTO, Mongolia has not taken additional commitments in services. 
In the services negotiations, Mongolia has not yet expressed its positions, although it carefully 
studies the process of negotiations and the positions of other countries. In the future, the 
Government intends to express the Government's views and ideas upon it.  
5.8.  It is appropriate that the negotiations in services be directed towards ensuring the promotion 
of all participants' economic growth, as well as the development of developing countries and the 
land-locked developing countries in particular. At this point, the Government of Mongolia is still of 
the position that the negotiations should be directed to open the markets of developed countries to developing countries in terms of the issues related to the movement of the population and 
increasing the types of services.  
5.9.  Mongolia's the market of trade services is totally open without any restriction as of today.  
5.10.  There are many difficult issues as stan dards and quality of services, differences of 
achievements on technical regulation level and shor tage of skilled staffs to develop trade services 
of the developing countries. So it indicates that technical assistances from the international organizations and donors are need to be increased for these matters.  WT/TPR/G/297 • Mongolia 
 
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  5.1.5  Trade facilitation 
5.11.  This is an issue that has a particular importance in increasing trade especially for small 
island and land-locked developing countries with vulnerable economies. The Government of Mongolia pleased, that agreement has been completed successfully and believes that, members 
pay more attention to the implementation of the agreement.  
5.12.  Transit transportation costs for land-locked developing countries is relatively high (double) 
than for countries with access to the sea. Thus, the Government of Mongolia considers that 
provision of special and preferential tariffs for transportation by transit countries to land-locked 
developing countries would greatly contribute to fair competition.  
5.13.  High-level meeting for land-locked developing countries (LLDCs) was organized jointly by 
the Government of Mongolia, UNESCAP, Under-Secretary-General and High Representative for the 
Least Developed Countries, Landlocked Developing Countries and Small Island Developing States 
on 28th-29th August, 2007 and Ulaanbaatar Declaration was issued. During this meeting, Government of Mongolia initiated to establish International think-tank of LLDCs. Moreover, next 
High-level meeting for land-locked developing countries was held by the Government of Mongolia 
in collaboration with the Economic and Social Commission for Asia and the Pacific. Participants from 12 land-locked countries, donor and partner countries and representatives from international 
organizations attended the high-level meeting.  
5.14.  Multilateral agreement establishing "International think-tank for Land-locked developing 
countries" has been submitted for signatures in 2010. A total of 7 countries have signed and 4 countries have ratified. The government of Mongolia has invested MNT540 million in establishing 
the think-tank center.  
5.15.  Removing technical barriers to trade and reducing non-tariff measures will further 
contribute to trade liberalization and making trade freer in this globalizing world. the Government 
of Mongolia notes the necessity of technical assistance to build the capacity of developing countries 
in this particular issue. In the past, the Govern ment of Mongolia jointly with the WTO and the ITC 
organized a national seminar on trade facilitation, as well it invited experts from these organization 
and the UN for making recommendations to the Government.  
5.1.6  Rules and regulations 5.16.  With regard to anti-dumping, subsidies and countervailing duties, Mongolia has not up to 
now taken any measure against any country and no country has taken similar measures against 
Mongolia. Presently, the Government is working on draft laws on these issues. Within the 
framework of the WTO Agreements on Anti-Dumpi ng and on Subsidies and Countervailing Duties, 
it is necessary to refine the domestic rules and regulations and relevant laws need to be drafted. 
The Government considers that the implementation of present WTO Agreements and 
commitments, more and effective technical support is required in general.  
5.1.7  Trade Related Aspects of  Intellectual Property Rights 
5.17.  Since its accession to the WTO, Mongolia has attributed due importance to the 
implementation of the TRIPS Agreement, thus bringing the national legislation into compliance with the Agreement and acceding to internatio nal IP conventions. In 1999, the Patent and 
Copyright Laws were amended and in order to ensure the implementation of IP laws, State IP 
Inspection Unit was established in 2000. A new law on Trademarks and Geographical Indications 
was adopted in 2003. Mongolia became a party to the Berne Convention for the Protection of Literary and Artistic Works in 1998 and in 2002, the decision was made to sign the WIPO 
Copyright and Phonogram Producers Treaties. Ho wever, there remain difficulties in the 
implementation of some of the provisions of th e TRIPS Agreement, namely with regard to the 
control of IPR-infringing goods, strengthening th e border control for and border measures against 
such goods. In this relation, technical assistance is required in these particular enforcement 
measures.  WT/TPR/G/297 • Mongolia 
 
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  5.1.8  Special and differential treatment 
5.18.  S&D treatment, as one of the major inst ruments of the multilateral trading system to 
diminish the disparities in development between the Member States, it is considered that it should have a legally binding effect on all Members. 
5.2  Regional Cooperation 
5.19.  Besides supporting and promoting the prin ciples of the multilateral trading system, the 
Government of Mongolia it attributes due importance to the regional cooperation in the Asia and 
the Pacific. At present, Mongolia is the sole country that does not belong to any of the regional 
agreements. However, the Government attentively follows the activities of the ASEAN, the APEC and the PECC and maintains the observer status in some of them. As well, Mongolia participates in the economic cooperation in North-Eastern and Central Asian countries and actively participates 
"Greater Tumen initiatives" project. In the future, it is intended to ensure a more active 
participation of the country in working groups of the APEC and possible accession to it.  
5.3  Free Trade Agreements (FTAs) 
5.20.  It is noted herein that the support from th e bigger trading partners of the country plays an 
important role in the development of trade relations of such countries like Mongolia, land-locked with small and vulnerable economy and dependent on  external trade. As such, the Government is 
making efforts to resolving trade issues that ar e hindered within multilateral trading system 
through bilateral mechanisms. For instance, the negotiations of Economic partnership agreement with Japan has launched and studies for possibilities to launch of free trade agreements with other major trading partners.  
5.4  Free Trade and Economic Zones 
5.21.  With the objectives to increase trade, attract more investment and promote export-oriented 
industries, the Government is working towards establishing free trade and economic zones, as well 
as industrial and technological parks. The legal basis for such endeavors has been established by 
adopting the General Law on Free Zones, the Laws  on the Legal Status of Altanbulag (in the 
northern border) and Tsagaannuur (the western part) FTZs and of Zamyn-Uud (southern border) 
FEZ. "The legal status of Industrial and Technological Parks" was approved in 2009, it has 
launched Sainshand Industrial park establishment. Wi thin industrial park, projects including a coal 
gasification power plant, oil refinery, and mineral processing facilities is planned to build and it required US$10,986 million of investment.  
6  FUTURE TRADE AND ECON OMIC POLICY DIRECTIONS 
6.1.  As a result of Parliamentary election in 2012, the Government set key economic policy 
objective to reduce dependency on the mining sector, achieve a long term sustainable 
development and create a competitive and diversified economy. In order to enhance economic 
development, promote sustainable growth, action s regarding infrastructure, urban development 
are included in the Government programs. Trade an d economic policy has resulted the stabilization 
of a macro economy. To strengthen these positive  results, ensuring further stabilization of the 
economy and its growth remain the objective of the Government. 
6.2.  In order to achieve the key objective, impl ementing policies to ensure economic growth by 
increasing well balanced export and FDI, promote industry, agriculture, service sector, increase 
number of export products, create FDI protective environment. Government of Mongolia thinks, 
these policies will increase role of foreign trade and FDI's in economic growth.  
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