RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/TPR/G/145 
15 February 2005  
 
(05-0551) 
Trade Policy Review Body Original:  English 
  
 
   
 
TRADE POLICY REVIEW 
 
Report by 
 
MONGOLIA 
 
 
 
 
Pursuant to the Agreement Establishi ng the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), the policy statement by Mongolia is attached. 
 
 
Note: This report is subject to restricted circ ulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on Mongolia. Mongolia WT/TPR/G/145 
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CONTENTS 
    P a g e  
I. INTRODUCTION 5 
II. MONGOLIA AND MULTILATERALISM 5 
III. ECONOMIC AND TRADE DEVELOPMENTS: 1997 - 2003 5 
 (1) C URRENT MACRO ECONOMIC SITUATION  5 
 (2) E XTERNAL TRADE AND FOREIGN DIRECT INVESTMENT  7 
 (3) L EGAL AND STRUCTURAL CHANGES IN EXTERNAL TRADE  11 
IV. MAJOR ECONOMIC SECTORS OF MONGOLIA 13 
V. MULTILATERAL TRADE COOPERATION 19 
 (1) M ONGOLIA AND THE WORLD TRADE ORGANIZATION  19 
 (2) R EGIONAL COOPERATION  21 
 (3) F REE TRADE AGREEMENTS (FTA S) 22 
 (4) F REE TRADE AND ECONOMIC ZONES  22 
VI. FUTURE TRADE AND ECONOMIC POLICY DIRECTIONS 22 
 
 Mongolia WT/TPR/G/145 
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I. INTRODUCTION 
1. Mongolia is one of the first economies in tran sition that became a Member of the World 
Trade Organization (WTO). By becoming the Memb er of the WTO in 1997, Mongolia has proven to 
support the concept of multilateral trading system and the trends of global economic development. 
2. This is the first review of Mongolia's trade policy since its accession to the WTO, the main 
objectives of which are, as the Government of Mongo lia considers, to bring to the attention of the 
Members the major results and changes that occurre d 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. 
3. The Government of Mongolia is ascertained that th is first 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. 
4. This Report by the Government 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 bila teral trade situation and trends and directions 
in trade and economic development. 
II. MONGOLIA AND MULTILATERALISM 
5. It is the consideration of the Government of Mongolia that cooperation in multilateral trading 
system will play a significant role in economic de velopment and bringing the living standards of the 
population up, especially for Mongolia, 50% of the GDP of which account for exports. 
6. As of present, Mongolia does not belong to any of regional trade and economic agreements. 
This is the indication that Mongolia promotes open and liberal foreign trade policy. Nonetheless, the 
Government does not exclude the possibility of acce ding to and/or initiating any such multilateral and 
bilateral agreements and with this pu rpose careful studies are being undertaken. 
7. The Action Programme of the Government of  Mongolia reflects to thoroughly study for 
possibilities that arise from regional cooperation ag reements, 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 within the region and to negotiate free trade agreements 
with some of the countries in the region. 
III. ECONOMIC AND TRADE DEVELOPMENTS: 1997 - 2003 
8. Transition from centrally-planned economic sy stem to market economy has started in 
Mongolia from early 1990s. As a result of decisi ve measures taken by the Government towards 
directing the economic development to the new path  and creating new leverage for development as a 
whole, positive trends have started to occur from mid-1990s. 
(1) C
URRENT MACRO ECONOMIC SITUATION  
9. Despite the fact that the country has faced c onsiderable obstacles and constraints during the 
transition, the Government considers that it could overcome the economic difficulties of the period by 
ensuring socio-political stability in the country. WT/TPR/G/145 Trade Policy Review 
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10. In the transition to market economy, economic re form has played a vital role. Within this 
framework, a number of measures directed towards privatizing state-owned enterprises, promoting private sector, developing national industries, liber alizing foreign trade, attracting FDIs, undertaking 
structural changes, carrying out adequate fina ncial and monetary polic ies, recuperating and 
restructuring the banking system have been taken during the last period. 
11. As a result, since 1993, positive indicators occu rred in economic development. The real 
economic growth has reached 3.3% in average be tween 1993 and 2004. The r eal economic growth in 
2002 was 4%, in 2003 5.5% and expected growth in 2004 reaches  8%. If inflation rate in 1995 was 
53.1%, then in 1998-2003 it did not exceed the av erage of 10.0% annually. In 2002, it accounted for 
only 1.6% presenting the lowest level within the whole period. This indicates that macro economic 
and financial environments have  substantially improved creating favourable condition for running 
businesses in Mongolia. 
12. One of the indicators of macro economic situati on is the exchange rate of Tugrug (national 
currency) against hard currencies. In the last 3-4 y ears, the exchange rate h as been somewhat stable. 
In 2003 compared to that of 1995, Tugrug against USD depreciated by 2.5 times, to that of 1997 - by 
1.4 times, to that of 2000 - by 6.4%, which means that between 1997-2002 it ranged on average 
around 17.2% annually. Between 1999-2002, Tugrug has depreciated in average by 5.4% annually. 
13. As a result of comprehensive measures taken to  overcome banking and fina ncial crisis and the 
revitalization of the sector, the general trust of  the people and of economic entities in banks has 
grown, bank reserves have increased and credit reso urces, which play an important role in economic 
development have, consequently, increased. The privatization process undertaken in the banking 
sector has given birth to new foreign-invested  commercial banks, which in turn permitted the 
introduction of international banking management and of the 17 commercial banks operating today 5 
are foreign-invested banks. 
14. Besides, financial mediation services have started to develop since 1999 and non-banking 
financial institutions (NBFIs), as well as Savings  and Credit Corporations (SCCs) have been 
established. As of 2003, 104 NBFIs were registered operating in mainly providing micro-credits, thus 
making certain contribution to the economy. SCCs have become big engines, which accumulate 
savings and provide credits. 
15. The Law on Non-Banking Financial Services and related regulations a dopted in 2002 have 
created the legal ground for such services. In 2003,  the total credits of NBFIs increased by 51.7% 
reaching 18.9 billion Tugrugs compared to the previous year, thus accounting for 2.3% of the banking 
sector. As well, in total 33.8 billion Tugrugs were credited to individuals and entities by SCCs and 
accumulating 38.4 billion Tugrugs in savings. 
16. Within the framework of economic stabilization objectives, certain measures have been taken 
to reduce unemployment. As such, the unemployment rate dropped from 5.5% in 1995 to 3.5% in 
2003. 
17. As of the end of 2003, the share of trade in the GDP reached 28.8%, of agriculture 20.0%, of 
transportation 15.1%, of mining 9.5%  and of processing industries 6.0%. 
18. The promotion of private sector was one of the major objectives of the Government of 
Mongolia. A particular attention was paid to priva tization of state-owned enterprises. Livestock, crop 
land and trade sector were privatized since early  1990s and bigger entities such as the Trade and 
Development Bank, Agricultural Bank, NIC (petroleum  distribution) and Mongol Daatgal (insurance) 
companies were privatized since 2000. The Governme nt's Action Programme for the next four years Mongolia WT/TPR/G/145 
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states that private sector is the engine that driv es growth, thus it is stipulated to continue with 
privatization process, including big entities. Privati zation resulted in that the 75-80% of the GDP is 
produced by the private sector. 
(2) EXTERNAL TRADE AND FOREIGN DIRECT INVESTMENT  
(a) Foreign trade 
19. By becoming the Member of the WTO in 1997, Mongolia has chosen the path of multilateral 
trading system and made its principles the engine  for development. 25%-30% of the GDP account for 
trade. This shows that the country's economy heavily  depends 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. Th e 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. 
20. If in 1995, the total trade turnover of the c ountry accounted for USD 937.2 million, in 2000 it 
reached USD 1,150.3 million, in 2001 USD 1, 159.2 million, in 2002 USD 1,214.7 million and in 
2003 USD 1,416.9 million that is compared to that of 1995 the increase by 1.5 times and to that of 
2000 by 23.2%. 
21. Although the total trade turnover has steadily been  increasing, trade remains in deficit for the 
whole period except for 1993-1995. For inst ance, trade deficit in 1997 accounted for 
USD 16.8 million, in 2000 USD 78.7 million, in 2001 USD 116.2 million, in 2002 USD 166.7 million 
and in 2003 USD 185.1 million, which compared to 2000 is the increase by 2.4 times. The reasons 
lying behind the increase of trade deficit ove r years include trade dependency on few export 
commodities, high percentage of raw materials in  exports, heavy dependency of these raw materials 
on world market prices, the ever increasing needs fo r imports and more costly foreign trade due to 
high transit transportation costs.  
Table 1. Total trade turnover, USD million 
 1995 1997 2000 2001 2002 2003 
Total trade 
turnover,    of which: 937.2 919.8 1,150.3 1,159.2 1,214.7 1,416.9 
Export 521.9 451.5 535.8 521.5 524.0 615.9 
Import 415.3 468.3 614.5 637.7 690.7 801.0 
Balance 106.6 -16.8 -78.7 -116.2 -166.7 -185.1 
 
22. If before 1990s, former Soviet Union and Eastern European countries took more than 90% of 
our total trade, after 1997 major changes have occurr ed in the geographical distribution of Mongolia's 
trade partners. Presently, Mongolia trades with more than 80 countries, the PR of China, the Russian 
Federation, the USA, the EU, the Republic of Ko rea and Japan being our major trading partners. WT/TPR/G/145 Trade Policy Review 
Page 8 
 
 
Table 2 below shows our major trading part ners and their share in total trade. 
 
 1995 1997 2000 2001 2002 2003 
Total,  
  of which: 100.0 100.0 100.0 100.0 100.0 100.0 
PR of China  13.0 32.0 34.8 32.3 32.0 32.2 
Russian Fed. 29.5 27.0 21.8 23.4 23.5 21.6 
USA 4.3 7.2 13.8 13.7 15.6 11.7 
EU 10.8 14.3  9.2 9.2  7.3  9.4 
Rep. of Korea 5.1 2.6  5.9 6.8  9.0  5.3 
Japan 15.0 6.6  7.1 6.2  4.0  5.1 
 
Since 1990, Mongolia has concluded nearly 30 bila teral trade and economic cooperation agreements. 
 
23. In order to make the customs procedures mo re appropriate, the Customs and the Customs 
Tariff Laws were adopted in 1996 and subse quently amended in 2001, 2002, 2003 and 2004 
respectively. The ASYCUDA (automatic system cu stoms data) system was used since 1995, which 
was replaced by GAMAS (automatic system custom s data) in 2003 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 th e bureaucratic ladder for businesses. 
24. The national standards are adopted by the National Standards Council on the basis of 
consultation between the Government, producer s, businesses and the consumers. The Law on 
Standards and Conformity Assessment was renewed in 2003 to ensure the compliance with the WTO 
Agreement on Technical Barriers to Trade. 
(b) Mongolia's bilateral trade relations 
25. More than 50% of our total trade accounts for tr ade with the Russian Federation and the PR of 
China. The main export products of Mongolia to Ru ssia are mainly products of animal origin and 
minerals, including beef, horse meat, fluorspar and copper concentrates and gold and to China are 
copper and molybdenum concentrates, wool, cashmere , hides and skins. Due to the reason that 
exports to these countries are dominated by agricultura l products, they are fragile to technical barriers 
of these countries. Besides, access to the Russian market is becoming more problematic, import duties 
on Mongolian traditional products are sharply increasing and external trade activities are becoming more costly in relation to Russia’s accession process to the WTO. In particular, Russia's transportation 
costs and export taxes have been increased, which negatively affect Mongolia's trade as a whole, and 
bilateral trade deficit is increasing year by year. As  of 2003, compared to 1995, trade turnover with 
Russia dropped by about 10%, whereas tr ade with China increased by 3.5 times. 
26. The share of the USA in the country's total trad e was about 12% as at the end of 2003, that is 
compared to 1995 is the increase by 4 times. Th e major export goods include textiles. With the 
objective to increase trade and investment betwee n the two countries, the Government of Mongolia 
aims to start the negotiations of a free trade agreement with the US. As such, an Agreement 
Concerning the Development of Trade and Invest ment Relations was signed between the two 
countries in July 2004. Under the Agreement, a Jo int Trade and Investment Council has been set up. 
27. Trade with the EU accounts for about 10% of  our total trade. In 2003, trade between 
Mongolia and the EU increased by more than 30% compared to 1995. Gold, textiles and cashmere 
goods are the main export goods of Mongolia to the EU. The objectives in bilateral trade cooperation 
with the EU in the near future include the re gistration of Mongolian traditional export goods as Mongolia WT/TPR/G/145 
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geographical indications, as well as seeking the possibilities of inclusion of Mongolian cashmere 
products in the EU GSP scheme. 
28. Japan and the Republic of Korea together take about 10% of the total trade, of which 5.3% 
accounts for the Republic of Korea. Trade with Ko rea has increased in th e last years. In 2003, 
compared to 1995, it increased by 1.6 times. Tr ade between Mongolia and Japan in 2003 has dropped 
by double compared to 1995, which is considered was mainly due to the Asia crisis of 1997-1998 and 
the substantial decrease of Mongolia’s exports. Th ere 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.   
29. High costs for transportation through the territo ries of the Russian Federation, as well as of 
the PR of China and other obstacles in transporta tion make the transit transportation costly, thus 
difficult to access the markets in the EU, the US, Japan  and the Republic of Korea. Taking this into 
consideration, expediting the ne gotiations of the tripartite Agre ement on Transit Transportation 
between Mongolia, Russia and China is more th an important for the country. Addressing these 
problems also requires additional technical assistance. 
(c) Exports 
30. Mongolian exports are composed of few items, na mely minerals such as copper, molybdenum 
and fluorspar concentrates and gold, textiles and animal originated raw materials such as wool, 
cashmere, hides and skins, meat and intestines. Mi nerals and textiles account for more than 60% of 
total exports. 
31. Over the last few years until 2000, there has been  an increase in the share of exports in the 
GDP: 42.8% in 1997, 52.7% in 1999, 57.7% in 2000. However, in 2001 it dropped to 51.5%, in 2002 even more to 47.9%, recovering by a bit in 2003 reaching 49.3%. Such  fluctuations were mainly due 
to natural disasters such as drought and dzud (har sh winter conditions) be tween  2000 and 2002, the 
decreased demand for copper and cashmere and the d ecline of the world prices for these commodities.  
32. The country's main export destinations are the PR of China, the USA, the EU, the Russian 
Federation and Singapore. 
Table 3. Mongolian exports, by countries, in percentage 
 1995 1997 2000 2001 2002 2003 
PR of China 14.9 51.9 51.2 45.7 42.1 46.1 
USA 4.9 6.5 24.3 27.7 31.6 23.2 
EU 11.7 9.1 7.7 7.2 6.3 7.4 
Russian Fed. 13.2 18.3 8.4 8.6 9.2 6.7 
Singapore   0.01 0.03 0.02 5.7 
 
33. With the purpose of increasing exports and thei r diversification, no taxes are levied upon 
exports, except for certain goods su ch as raw cashmere, iron, copper, aluminium wastes and wood. A 
national programme to Promote Export-Oriented Pr oduction was launched in 1998 to strengthen the 
economic capabilities of the country and to ensure sustainable development through the accumulation of savings and the increase of hard currency reserv es. In addition, an Export Promotion Centre was 
established under the Foreign Trade and Fo reign Investment Agency in 2002. 
34. Some of the Mongolian export items enjoy pref erential tariffs under the GSP schemes of the 
USA, the EU, Canada and Japan. WT/TPR/G/145 Trade Policy Review 
Page 10 
 
 
35. The Government aims to pursue the trade policy that would facilitate the one-sided structure 
of exports. Within this framework, the objectiv es are to diversify exports, promote new products, 
improve their competitiveness, reduce trade barriers,  develop business relations with the South and 
North Eastern Asia and Europe, as well as activel y work towards including more Mongolian products 
in the GSP schemes of developed countries. 
(d) Imports 
36. The country's imports are more diverse and l ess centralized compared to its exports. For 
instance, heavy machinery, equipment, electrical appliances counted for 21.0% of total imports in 
2003, fuel 20.8%, vehicles 10.8%, textiles 10.4% and food and foodstuffs 7.7%. The imports of these 
goods account for more than  70% of total imports. 
37. Import duties kept changing over the last years. In 1997, import customs duties were 
removed, between 1999-2000 import tariffs were imposed at 5.0%, in 2001 it was 7.0% and from 
2002, the current tariff rate of 5.0% was imposed, wh ich compared to many countries is a fairly low 
level and this shows that the country  is committed to more liberal trad e. On the other hand, such a low 
tariff is followed to promote the capacity of produc ers and traders to allow them to compensate for 
high transit transportation costs. In other words,  higher import duties woul d particularly increase the 
consumer prices, thus make the supply of fo od and consumer goods difficult to access. The 
Government aims to impose differentiated import duties in order to promote domestic production, 
encourage the transfer of advanced technology, as well as for the concerns related to food security and 
better quality foodstuffs. 
38. The share of imports in the GDP in 1997 accounted  for 44.4%, in 1999 with some increase it 
reached 56.6%, in 2000 it reached 63.3%, whereas in  2001 it decreased to 52.6%. In 2002 and 2003 it 
increased more reaching 58.0% and 67.0% respectively. 
39. The main importing countries to Mongolia are th e Russian Federation, the PR of China, the 
EU, the Republic of Korea and Japan. 
Table 4. Mongolian  imports, by countries, in percentage  
 1995 1997 2000 2001 2002 2003 
Russian Fed. 50.1 35.4 29.2 33.6 34.7 33.1 
PR of China 10.7 12.9 20.5 18.8 24.3 21.8 
EU  9.5 19.3 10.4 10.4  8.1 10.9 
Rep. of Korea  5.2  4.4  9.0  9.1 12.5  8.5 
Japan 10.9  7.4 11.9  8.8  6.2  7.9 
 
Imports from the above five countries account for more than 80% of the total imports in 2003. 
 (e) Foreign Direct Investment (FDI) 
40. "Investment Programme", a mid-term policy and strategic activities for FDI, was launched in 
2001. Among other activities, with the purpose of attracting FDIs, the year 2002 was announced the 
Year of Investment Promotion, within the framewo rk of which an International Forum of Investors 
was organized. As well since 2002, the forum of inv estors in the mining, agricultural and other sectors 
has been organized annually, which resulted in th e increase of FDIs by 40% in 2002 compared to the 
previous year. In total, FDIs made to Mongolia since 1990s reached USD 1.3 billion. In figures, the 
FDI made between 1997 and 2003 increased by 5.8 ti mes compared to that between 1990 and 1996. Mongolia WT/TPR/G/145 
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Table 5. Foreign direct investment, USD million  
 FDI 
(1990-2003)  
1990-1996  
1997-2003  
Increase 
Total, 
  of which: 1,114.7 164.5 950.2 5.8 times 
PR of China 337.7 13.6 324.1 23.8 times  
Canada 133.8 0.1 133.7 1,337 times 
Rep. of Korea 83.3 9.2 74.1 8 times 
Japan 60.5 23.7 36.8 1.6 times 
USA 36.6 14.2 22.4 1.6 times 
Russian Fed. 34.0 14.1 19.8 1.4 times 
 
41. A particular attention was paid to the creati on of a more favourable environment for FDIs. 
The necessary amendments made to the Foreign Inv estment Law of 1993 served a major pillar to 
attract and protect FDIs. These amendments include th e expansion of forms and types of FDIs and the 
legal ground for concluding "Stability Agreements" has been established. 
42. To protect and promote FDIs, the Government  has concluded Agreements on the Promotion 
and Mutual Protection of FDIs with about 40 co untries and Agreements on the Avoidance of Double 
Taxation with more than 30 countries. 
43. Mining, information and technology, agricultura l production and tourism have been identified 
by the Government as priority sectors for developm ent and FDIs. The imports of some equipments 
and heavy machinery in these sectors enjoyed customs and VAT tax exemption. 
44. The Government considers FDI as an important thrust in the economic development of the 
country. In reaching its objective to ensure a 6%  annual economic growth, the Government in its 
Action Programme stated to create an environment th at 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) L
EGAL AND STRUCTURAL CHANGES IN EXTERNAL TRADE  
45. Since its accession to the WTO, the Govern ment has undertaken a number of measures 
directed towards refining and making trade laws in line with the WTO rules, regulations and 
requirements. The Insurance Law, the Food Law,  the Labour Law, the Accounting Law, the Land 
Law, the Company Law, the Bankruptcy Law, the Free Zone Law, the laws on the Legal Status of Altanbulag and Tsagaannuur Free Trade Zones, th e Law on the Legal Status of Zamyn-Uud Free 
Economic Zone, the Licensing Law, the Immovable Property Law, the Trademarks and Geographical 
Indications Law, the Civil Code and the Quaran tine and Inspection for Transferring of Animals, 
Plants, Raw materials and Products of Their Origin  Through the State Border Law were adopted. The 
unecessary amendments were made to the Customs La w, the Customs Tariff Law, the Minerals Law, 
the Standardization and Conformity Assessment Law,  the Environmental Protection Law, the Excise 
Tax Law, the VAT Law, the Foreign Investment La w, the Copyright Law, the Patent Law and the 
Taxation Law. 
46. Previously specialized inspections, for example,  standards, insurance, labour, environment, 
veterinary inspections, hygienic and sanitary insp ections were carried out by inspection units under 
respective ministries. Since 2002, all these separat e specialized units were brought under a single WT/TPR/G/145 Trade Policy Review 
Page 12 
 
 
umbrella organization-the State Specialized Inspec tion Agency, thus inspection services are provided 
at a one-stop-service principle. 
47. In order to provide the local population with  better quality and cheaper foodstuffs and 
consumer goods on one side and to purchase animal -originated raw materials such as wool, cashmere, 
hides and skins from herders and supply the domestic industries with raw materials on the other side, 
the Wholesale Network Programme was launched in  2002 by the Government. At present, the 
programme is being implemented in 14 aimags (provinces) of the total 21. 
48. 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 a llowed for import and export with 
licenses. In accordance with the Regulation, th e number of licensed goods was reduced from 
19 groups of products to 9, which ar e coherent with international practice of licensing, i.e. previously 
licensed 4,000 types of chemicals were reduced to 30 0. Breeding animals, rare and very rare animals, 
raw materials therefrom, semens of animals, cultures of micro-organisms, uranium and thorium ores 
and concentrates, poisonous chemicals, human bloo d and organs for therapeutic and prophylactic 
purposes, explosives and guns are subject to licensing.  Licensing is carried out by sectoral ministries 
and the Ministry of Industry and Trade is responsible for accumulating the information. 
49. A number of projects implemented in trade and industry fields in the last years with the 
financial assistance of interna tional organizations and donor countri es, including the ITC, UNIDO and 
ADB have been resultful. As well, the German -funded projects on International Trade Policy/WTO 
and on Export-Oriented Trade and Industrial Polic y are considered to be the successful ones. 
50. Mongolia has set up bilateral intergovernment al 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, Ka zakhstan, the Kyrgyz Repu blic, Ukraine, Belorus, 
Vietnam, Cuba and Turkey and with the UK, Canada and the DPR of Korea discussions are organized as roundtables. The Government Resolution 214 of  2004 nominates the heads of the Mongolian side 
of the committees. 
51. There is a fora for discussion of WTO-related matters as well. The first inter-ministerial 
working group headed by the Mini ster for Industry and Trade established in 2001 was re-established 
in November 2004. The working group is composed  of representatives of respective ministries’ and 
agencies’ and has the mandate to discuss the issues related to trade and the WTO in particular and 
drawing recommendations to the Government. 
52. A specific attention was paid by the Governme nt to the importance of the private sectors 
participation in developing and formulating trade policy. With the purpose of creating partnership and 
cooperation between governmental and non-government al organizations and the private sector and 
making recommendations to the Government, a Cons ultative Committee with equal representation by 
the parties was established in 2001. As well, to en sure the involvement of professional associations in 
developing and promoting industrial and investment  policies, close cooperation is maintained between 
the Government, the Mongolian National Chambe r of Commerce and Industry, the Mongolian 
Employers' Federation and ot her professional associations.  Mongolia WT/TPR/G/145 
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IV. MAJOR ECONOMIC SECTORS OF MONGOLIA 
Mining 
 
53. Mining is one of the major sectors that plays an important role in the economy of the country. 
As of 2003, the share of the sector in the GDP ac counts for 9.5%. Between 1995 and 2002, the sector 
takes 49%-50% of the total industrial output and in 2003 it reached 54.3% of the industrial output 
counting for the highest percentage in the last 10 y ears. Minerals accumulate 50% of our total export 
revenues. 
54. Since 1997, there was a little or no substantial ch anges in the structure of minerals exports 
and in 2003, 26.6% of exports were copper concentr ate, 22.7% - gold, 3.2% - fluorspar concentrate 
and 2.4% - molybdenum concentrate. 
55. The Government set out the policy and direc tions in mining sector until the year 2010 and 
created the legal environment for Stability Agreements  in order to attract and increase investment in 
this sector. As a result of a number of specific measures,  investment in the sector in the last four years 
has increased by about four times. 
56. Oil and oil extraction has started to play certain role in the economy. If before 2000 oil 
extraction took only 0.1% of total industrial output , then in 2003, it took 0.7%. As a result of 
appropriate measures taken by the Government in th is sector, foreign investment in the sector has 
been gradually increasing since 1993 to 1998 reaching the highest point of USD 32.7 million. However, since 1999, investment has dropped and cu rrently, the annual average of investment is 
USD 7.8 million. 
57. 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. 
Agriculture 
 58. The share of agricultural sector in the GDP in 1995 was 38%, in 1996 – 43%, in 1997 – 36%, 
in 2000 – 29%, in 2002 and 2003 – 20%. Livestock, one of the major constructors of agricultural 
output, counted for about 85%-87% of the total agricultural output between 1995 and 2000. In 2001-
2002, it decreased to 80%. The reason is that betw een 1995-1999 the number of the heads of livestock 
has intensively grown to reach 33.6 million, whic h by 2003 decreased to 25.4 million heads. Such a 
sharp decrease was resulted by natu ral disasters, which caused the loss of more than 10 million heads 
of livestock. 
25.4
23.926.130.233.6
31.3
29.332.9
23.025.027.029.031.033.035.0
1996 1997 1998 1999 2000 2001 2002 2003Total livestock, mln. heads
a
 
 WT/TPR/G/145 Trade Policy Review 
Page 14 
 
 
59. The total agricultural output in 2003 accumu lated USD 329.4 million, of which livestock 
accounted for USD 262 million and crops - for USD 67. 4 million. If due to the reasons stated above, 
livestock has decreased, crops, on the other hand, shown some increase. Agricultural production, one of the major sources of the country’s economic devel opment, has faced substantial difficulties in the 
beginning of 1990s and domestic  production had virtually collapsed. To halt the down-fall of the 
sector and put the sector into the right path of de velopment and ensure its further growth were the 
issues of concern for the Government and as such, major changes have been undertaken since 1990s. 
Livestock and crop-land were privatized. Various pr ogrammes have been implemented at the national 
level to increase employment in the sector, to a ddress the issues of poverty, to prevent from natural 
disasters, to introduce new technology and machinery, to ensure food security, to protect plants and to 
control pest and disease. An international forum of investors in the agricultural sector was organized 
in 2004 with the objective of attracting investors to the sector. These measures have resulted in the 
increase of agricultural output and in 2003 compared to that of the previous year increased by 7.5% 
and compared to 1995 increased by 44%. 
60. Decrease of agricultural output in the last four years was mainly resulted from natural 
disasters and in 2003 as the heads of livest ock grew, agricultural output increased. 
61. 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 implementati on of the policy, which is being monitored. 
62. The Government intends to privatize the land in  the local areas, thus to open possibilities for 
local population to enjoy the benefits of it, to im prove access to water in gobi and steppe areas, to 
promote farming and intensified agriculture, to improve the processing of agricultural products, as 
well as to provide the necessary support to the pr oduction of ecologically clean products and create 
markets for special quality livestock originated products.  
Industry 
 
63. Industry plays an important role in the ec onomic development of the country. From the 
beginning of the 1990s to 2000, total industrial output decreased by 31% but increased by 11.8% in 2001, by 3.8% in 2002 and by 2% in 2003. The Government announced the year 2001 the "Year of 
Promoting National Industries", within the framework  of which the Government put the objectives to 
define the priority sectors of economic development,  create a more favourable legal environment for 
investment and to begin industrial technological re novation and it continues the implementation of 
these objectives. The collapse of processing industry has been halted and  total production of the 
sector increased by 22.7% in 2001,  by 24.3% in 2002, by 36.7% in 2003, accounting for 28% of the 
gross industrial output. 
64. 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 and programmes such as on "Cashmere", "Wool", "Hides and skins", "Wholesale Network Programme",  "Short-term Development Concept on Geology 
and Mining", the "Concept of Developing Oil and Petroleum Sector until 2010" have been 
implemented and positive results have occurred in the developm ent of the industrial sector.  
65. The Government's policy in the sector is  directed towards the implementation and 
establishment of free economic and trade zones, indu strial parks to promote small and medium-sized Mongolia WT/TPR/G/145 
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enterprises (SMEs), expansion of micro-credit system  and promoting the use of industrial machinery 
and equipment via soft loans and leasing. 
Energy and petroleum  
 66. Major restructuring of the sector started from the year of 2002 by adopting the "Energy Law". 
18 private companies, which produce, transfer and distribute electricity and thermal energy, were established to open the sector to market competition.  
67. As part of restructuring, an independent m echanism was created by establishing the Energy 
Coordination Authority (ECA), as a result of whic h opportunities opened up for attracting foreign and 
domestic investments. A more competitive services started being provided to the users of electricity 
and thermal energy, as well it ensured a more ef fective utilization. In 2003, qualitative results 
occurred for the first time and the sector 's income was about USD 0.3 million. 
68. For the fuel, the extraction of coal in 2003 compared to that of 2000 increased by 15.6% 
reaching 5.9 million tones. The renovation of technolog y and equipment of coal mines resulted in the 
full supply of domestic needs for coal and there is  a plan to export 1-2 million tones of coal.  
69. The share of electricity and energy in GDP has gradually been increasing in the last few years 
and reached nearly 11.5 million Tugrugs (about US D 10 million) in 2003 taking 1.6% of the GDP. 
The processing of electricity and energy in 20 03 compared to 2000 increased by 6.5%, thus 
decreasing the importation of electricity and energy  by 7.3%. The total production of thermal energy 
in 2003 increased by 2.8% compared to the previous  year and compared to 2000 – by 3.6%. This was 
reasoned by the substantial increase of new buildings  and constructions. As we ll, the consumption of 
thermal energy also increased in 2003 by 1.1% compared with the previous year and by 0.4% to 
compare with 2000.  
70. Imported electricity shares 5.2% of the total cons umption and in the future there is a plan to 
establish resources with the capacity to produce more than 100 mVATTs. 
71. In order to improve the supply of energy, the Government is planning to build hydro-power 
stations in Western and Central regions, to establish more power cables and to implement 
programmes on the use of optional energy sources such as solar and wind. 
Communications 
 
72. From the end of 1990s, transit to the ma rket economy was successfully carried out by 
increasing the efficiency of information and communication sector, improving the structure and 
administration and by renewing the technology of the sector. In 2001, the "Telecommunications Law" 
was amended and in 2003, the "Law on Postal Services" was adopted.  In addition, several measures 
such as liberalization of the information and comm unication sector, promotion of fair competition and 
establishment of public service fund were undert aken, and the Information and Communication 
Coordination Committee was established. The Comm ittee carries out such activities as issuing of 
licenses, eliminating restrictions, deepening the openness of the market, promotion of fair competition. 
73. In 2000, the Mongolian State Great Hural adopted "The Concept for the Development of 
Information and Communication Technology of Mongolia to 2010", in accordance with which a  "Medium-term strategy to develop information and communication technology" was approved in 
2002 and it is being implemented. WT/TPR/G/145 Trade Policy Review 
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74. Taking into account the rapid enhancement of various services based on the information 
technology "Law on Information Security", "Gen eral Law on Information Technology", "Law on E-
signature", "Law on E-agreement" and "Law on E-governance" have been drafted. Citizens are 
provided with the opportunity to follow the activities of the Government and to participate in drafting 
of laws by giving their comments through "Ope n government" website on www.open-government.mn 
operating within the framework of the law. 
75. As a result of the above mentioned measures and introduction of new technologies into the 
communication sector, income of the communication ser vice increased dramatically in the last years 
and reached 92.4 billion tugrug in 2003, which increased  5.8 percent in comparison with the previous 
year and 2.9 times in comparison with 2000. The number of mobile telephone users has increased 
reaching 75.1 thousand in 2000, 91.2 thousand in 2001, 256.8 thousand in 2002 and 319.4 thousand in 
2003. The number of internet users has also in creased continuously and reached 11.2 thousand in 
2003, which is 12 percent more compared to the prev ious year, and it doubled compared to the year 
2000. 
76. In 2002, the telecommunications service monopoly was dismantled and the basis for a fair 
competition regime was established; competitiven ess was introduced into the internet service, 
international and domestic postal services, inform ation technology utilization and services and the 
market was opened up. Besides, "Mongolian Tel ecommunication" company – the only state-owned 
company in the information and communication sector is scheduled to be priv atized in 2005. Within 
the framework of the sector's development polic y and strategy measures aimed at opening up the 
service market, eliminating restrictions, coordinati ng utilization of radio waves, as well as prices and 
tariffs, facilitating exchange tariff system, establis hing an unified information system, implementing 
"e-Mongolia" program, introducing e-commerce, e-service, distance-training, e-publication and distance-diagnosing and amending re lated laws and regulations are planned to be carried out.  
Transport 
 77. The Laws on Auto Transportation and Air Tr ansportation were adopted by the Mongolian 
State Great Hural in 1998 and 1999 respectively. Mon golia joined conventions on international transit 
transportation – TIR and on the contract for the In ternational carriage of Goods by road (CMR) in 
2001 and 2003 respectively.  
78. As of today, Mongolia has signed inter-govern mental agreements on transportation with 
7 countries. Mongolia has concluded bilateral transit agreements with  the PR of China (1991) and the 
Russian Federation (1993), as well as working on establishing a triangle framework agreement on 
transit traffic between the People's Republic of China, Mongolia and the Russian Federation.  
79. The share of transport and communication sectors in the GDP reached 13% in 2003, which is 
an increase in comparison with the previous year. This share was 6.3% in 1995 and 9.3% in 2000. 
Total freight by all means of transportation was 17. 6 million tons in 2003, 13 .5 million tons in 2002, 
10.6 million tons in 2000, 8.9 million tons in 1995 respectively. In 2003, the total freight increased by 
30.2% to compare with the previous year, by 65.6% to compare with 2002 and doubled from 1995. 
80. Freight forwarding consists of 69.7% by rail, 30. 2% by roads and 0.1% by air. In 2003, total 
freight transportation turnover was 7,504 million tons/km or increased by 13.6% compared with the 
previous year, by 67.8% compared with 2000 and 3 times to compare with 1995. Railway freight has 
been continuously increasing in recent years and re ached 12.3 million ton/km in 2003, which is 5.5% 
increase compared with the previous year, 34.1%  compared with 2000 and 68% compared with 1995. 
However, air freight has been showing a tendency to d ecline in the last 2 years, which is connected to Mongolia WT/TPR/G/145 
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the development of rail and road transportation. The "Concept to Develop Rail Transportation" was 
approved recently and within its framework sever al measures such as change of information and 
communication inflow cables into optical cables, im provement of road cond itions, and development 
of industrial bases are being carried out. 
81. Mongolia has concluded agreements on the utili zation of Mongolian air space with 37 foreign 
invested air companies and provided flight administrative services (instructions) for about 120 thousand flights during 2000-2003, ensuring secure ai r travel. Privatization of this sector started 
in 2003 and will end in the first half of 2005. 
82. The "Millennium Road" programme was launched in  1999 in order to link the Western part of 
Mongolia with its Eastern part by auto-road. Exce pt for one state-owned company all auto road 
transportation companies have been privatized. In 2003 the number of all kind of vehicles which have 
gone through state technical inspection has increa sed by 29.4% compared with 2000 and by 87% 
compared with 1995. 
83. Duplicated statistics show that the passenger transportation in 2003 was 167 million persons, 
which is the increase by 58.8% compared with the previous year and by 80.5% compared with 2000. 
Construction and urban development 
 
84. Construction, installation and capital repair works have been continuously increasing since 
1995. For instance, increases were in 2000 by 2.1 times compared to 1995, 3.1 times in 2002 and 3.6 times in 2003. In 2003, 57% of construction inst allation and capital repair works were carried out 
by domestic companies, while 13% by joint ventures and 30% by foreign companies. Share of new 
buildings completed by construction companies in th e construction, installation and capital repair 
works were 74.8% in 2000, 78.4% in 2002 and 81% in 2003.  
85. As of today, there are 733 construction and installation companies, 118 engineering and 
exploration companies carrying out activities under special licenses and around 70 construction 
material plants are operating in Mongolia. 
86. The "Law on Construction" and the "Law on Wa ter Supply of Urban Area and Utilization of 
Cleaning Pump" were adopted in 1998 and 2002 respec tively. Privatization of the construction sector 
is basically finished as a result of set of measures aimed at enrolling non-privatized companies into 
the annual privatization programme of the Government. 
87. With the aim to intensify the development of the infrastructure sector, the Government of 
Mongolia is focused on continuing to implemen t developing programmes on energy, auto-road, 
telecommunication and information network, to im prove competitiveness of rail transportation, to 
build infrastructure in major deposits, to introdu ce high tech, know-how, to increase international 
flights using Mongolian air space.  
Banking and finance 
 
88. Mongolia has transferred into two-tired banki ng system by adopting the "Banking Law of 
Mongolia" in 1991. As a result of decisive actions  undertaken by the Government and the Bank of 
Mongolia to overcome transition cris is, the banking sector began to show signs of recovery since 
1999;  moreover stability in the financial sector has been strengthened and financial intermediation 
has been intensified. In 2003, private deposits allocated in commercial banks increased by 66.4% 
from the previous year and loans issued to  business entities and individuals by 91%.  WT/TPR/G/145 Trade Policy Review 
Page 18 
 
 
89. As a result of restructuring of the banking sector transaction between commercial banks are 
intensified. Although the monetary market of Mongo lia is yet to be centralized, today, Tugrug and 
foreign currency transactions between banks are being actively carried out. Tugrug and foreign 
currency contracts between banks reached around 39  billion Tugrugs in 2003 and transactions of 
333.9 billion Tugrugs with an average interest  rate of 10-16 percent have been made. 
90. Certain results are being achieved according to measures undertaken within the State 
monetary policy, focused on ensuring and strengtheni ng the stability of the financial sector, providing 
banks with conditions to conduct their businesses in accordance with international standards, making 
financial institutions transparent and open to th e public, conducting superv isions in line with 
internationally accepted methods and means. 
91. Government is planning to strengthen th e financial market, to develop financial 
intermediation, to intensify secondary market of bonds, to issue government bonds into the 
international market, to improve the legal environm ent for banking, to reduce interest rates of loans 
and to strengthen the security of private accounts. 
Tourism 
 
92. The Government identified tourism as a priority sector for development. As a result of 
measures aimed at improving harmonization, co ordination and management between sectors, 
developing infrastructure and advancing the qual ity of services to international standards, the 
contribution of the tourism sector in the GDP reach ed around 10% in 2003. If the number of tourists 
visiting Mongolia in 1996-1999 was 388.1 thousand, in 2000-2003 it reached 733.1 thousand persons, 
increasing by 1.9 times and the total income of the sector in the same periods grew from USD 82.8 million to USD 445.7 million or increased by 5.4 times. 
93. In order to promote Mongolia in foreign count ries and to increase the number of tourists, the 
Government announced 2003 as the year of "Visit Mongolia" and as an outcome of specific activities 
undertaken by the Government, the number of tourists  increased by 12% compar ed with the previous 
year. Based on the experiences of other countries, where tourism is highly developed and where a 
"visiting year" is proclaimed for several years under specific themes, the Government renounced the 
year 2004 as the year of "Discover Mongolia". As resu lt of numerous actions ta ken in order to attract 
tourists and to improve services 285 thousand touris ts came to Mongolia and earned USD 241 million 
as of November 2004. 
94. Tourism sector is fully privatized and many dom estic and foreign investors have entered into 
the sector and carrying out activities. As of the first 11 months of 2004, more than 500 entities are dealing with tourism in Mongolia, 60 percent of which are foreign invested entities. 
95. Mongolia is a member of the World Tourism Or ganization. In order to facilitate tourism, 
eliminate any barriers occurring with receiving to urists and ensuring their security, as well as to 
improve the legal environment of tourism, Mongol ia has signed inter-governmental Agreements on 
cooperation in tourism sector with the Government of the PR of China, the Republic of Korea, India 
and Kyrgyz Republic. 
96. The Government of Mongolia encourages envi ronmentally friendly tourism development 
policy, preserving national history, cultural heritage and custom, and furthermore is planning to implement measures aimed at setting up tourism camps  that meet international standards and service 
requirements, intensifying the development of domestic tourism and re ducing seasonal reliance.  Mongolia WT/TPR/G/145 
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V. MULTILATERAL TRADE COOPERATION  
(1) MONGOLIA AND THE WORLD TRADE ORGANIZATION  
97. Mongolia has continuously been encouraging multilateral trading system. Mongolia has, in 
the past, pursued a more open and liberal trade po licy, 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 adva ntage 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 pa rtners. As such, due attention was paid to the 
use of advantages of multilateral trading system and strengthening the national capacity. Despite the 
successful implementation 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. 
The Doha Development Agenda  
 
98. The Government of Mongolia is convinced that  trade liberalization plays and should play a 
vital role in improving the living standards of not 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 n ecessary contribution to successful implementation of 
the Doha Development Agenda. 
Agriculture 
 
99. Agriculture as one of the essential components of the DDA is an influential part in building a 
fair trading system. Agriculture, specifically livest ock, 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 subs idies and domestic support systems in the sector 
and imposed a single tariff of 5% across the boa rd, 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. 
100. High tariffs, strict sanitary requirements, as well as huge export subsidies and domestic 
support provided to the sector by the developed and some of the developing countries create 
unnecessary barriers to access their ma rkets and increase agricultural exports of developing countries. 
It is more than necessary to take measures dir ected 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 standard s and other requirements, appropriate.  
101. In agricultural negotiations Mongolia, as a deve loping country, has in the past and will 
maintain and support the issues related to food  security, rural development and environment. 
Non-agricultural market access 
 
102. The Government of Mongolia is  in support of "negotiations, wh ich shall aim, by modalities to 
be agreed, to reduce or as appropriate eliminate tariff s, 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 stipulat ed in the Doha Declaration. Mongolia, despite the 
deficit of its budget, within its commitments and to comply with the WTO agreements, maintains a WT/TPR/G/145 Trade Policy Review 
Page 20 
 
 
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 s hould be subject to more reduction.  
Services 
 
103. 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 othe r countries. In the future, the Government intends 
to work more actively in this sector to e xpress the Government's views and ideas upon it.  
104. It is appropriate that the negotiations in ser vices be directed towards ensuring the promotion 
of all participants' economic growth, as well as th e development of developing countries and the land-
locked developing countries in particular. At this point, the Government of Mongolia is 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 move ment of the population and increasing the types of 
services. 
105. At present, markets for trade in services are open in Mongolia and the country does not 
maintain other types of barriers therein. 
106. In developing countries the level of quality, st andards and technical regulation is relatively 
different and the capacity is lacking. Therefore, more technical assistance is required from international organizations and donors. 
Trade facilitation 
 
107. This is an issue that has a particular importa nce in increasing trade especially for small island 
and land-locked developing countries with vulnera ble economies. The Government of Mongolia has 
always maintained a pro-trade facilitation position. 
108. Transit transportation costs for land-locked de veloping countries is relatively high (double) 
than for countries with access to the sea. Thus, th e Government of Mongolia considers that provision 
of special and preferential tariffs for transporta tion by transit countries to land-locked developing 
countries would greatly contribute to fair competition. 
109. The provisions in Articles V (Freedom of tran sit), VIII (Fees and Form alities connected with 
Importation and Exportation) and X (Publication a nd Administration of Trade Regulations) of the 
GATT have very specific significance in trade expansion. 
110. Removing technical barriers to trade and reduc ing non-tariff measures will further contribute 
to trade liberalization and making trade freer in this  globalizing world. Once again, 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 Governme nt 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. 
Rules 
 
111. With regard to anti-dumping, subsidies and c ountervailing duties, Mongolia has not up to now 
taken any measure against any country and no coun try has taken similar measures against Mongolia. 
Presently, the Government is working on draft laws on these issues. Within the framework of the Mongolia WT/TPR/G/145 
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WTO Agreements on Anti-Dumping and on Subsidi es and Countervailing Duties, it is necessary to 
refine the domestic rules and regul ations 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. 
Intellectual property rights 
 
112. Since its accession to the WTO, Mongolia has attributed due importance to the 
implementation of the TRIPS Agreement, thus bri nging the national legislation into compliance with 
the Agreement and acceding to international IP conve ntions. In 1999, the Patent and Copyright Laws 
were amended and in order to ensure the implem entation 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 si gn the WIPO Copyright and Phonogram Producers 
Treaties. However, there remain difficulties in the implementation of some of the provisions of the 
TRIPS Agreement, namely with regard to the control of IPR-infringing goods, strengthening the 
border control for and border measures against su ch goods. In this relation, technical assistance is 
required from the WTO in these particular enforcement measures.  
Special and differential treatment 
 
113. S&D treatment, as one of the major instruments 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. 
Other negotiation issues 
 
114. The Government of Mongolia supports the noti on that multilateral rules on Singapore issues 
on investment, competition, trade facilitation and transparency in government procurement will 
further facilitate a more predictable global trade.  The Government of Mongolia is supportive of the 
inclusion of trade facilitation in the DDA. Nonethel ess, with regard to other Singapore issues, the 
Government is of the view that they need to be  further examined within the WTO work programme.  
115. Mongolia is a land-locked country with sma ll and vulnerable economy, dependent upon few 
export items. Therefore, Mongolia was one of the initiators for establishing a group of land-locked 
developing countries within the WTO. At the Fifth Ministerial Conference of 2003 in Cancun, a 
communique was distributed by a group of land-locked developing countries. 
(2) R
EGIONAL COOPERATION  
116. Besides supporting and promoting the principl es 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 count ry that does not belong to any of the regional 
agreements. However, the Government attentivel y 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. The accession to the 
Bangkok Agreement is being carefully studied. 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. WT/TPR/G/145 Trade Policy Review 
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(3) FREE TRADE AGREEMENTS (FTA S)  
117. It is noted herein that the support from the bigger trading partners of the country plays an 
important role in the development of trade relati ons of such countries like Mongolia, land-locked with 
small and vulnerable economy and dependent on extern al trade. As such, the Government is making 
efforts to resolving trade issues that are hindered within multilateral trading system through bilateral 
mechanisms. For instance, the in itiatives are being made to launch the negotiations of free trade 
agreements with our major trading partne rs such as the US, the EU and others.  
(4) FREE TRADE AND ECONOMIC ZONES  
118. With the objectives to increase tr ade, attract more investment and promote export-oriented 
industries, the Government is working towards esta blishing free trade and econom ic zones, as well as 
industrial and technological parks. The legal basi s for such endeavours 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 a nd of Zamyn-Uud (southern border) FEZ in 2002, 
2003 and 2004 respectively. "The Concept to De velop Industrial and Technological Parks" was 
approved by the Parliament Resolution No.54 of 2003. 
VI. FUTURE TRADE AND ECONOMIC POLICY DIRECTIONS 
119. Mongolia chose to develop a democratic society with market economy and since 1990 up to 
now, it has been striving after this goal. Within th e framework of this objective, the pursuance of a 
policy to develop freer trade and economic relati ons has resulted in the stabilization of a macro 
economy. To strengthen these positive results, ensuri ng further stabilization of the economy and its 
growth remain the objective of the Government. 
120. The new Grand Coalition Parliament and the Government formed as a result of the 2004 
elections are working in the absolutely new c onditions. In its Action Pr ogramme for 2004-2008, the 
Government aims to "deepen legal reforms in all spheres of political, economic and social life, sustain 
higher rates of stable, private sector-led economic  growth by providing support for access to new 
markets on the basis of knowledge and informatio n, and by implementing a regional development 
concept to reduce disparities in develo pment between urban and rural areas". 
121. Within the framework of the above objectives,  the Government aimed to maintain the 
economic growth at 6% annually through incr easing exports and FDIs, promote industrial, 
agricultural and service sectors and diversify ex ports, create a more favourable and reliable 
environment for investment and to ensure economic growth through a more active external trade policies. 
122. To meet these goals, a draft concept to develop th e country's external trade in the near future 
has been formulated. The concept reflects the pur pose of developing and increasing trade relations of 
the country with our trading partners, strengthe ning regional and multilateral trade and economic 
cooperation, as well as with the WTO, pursuing th e policy of promoting the production of final 
products and their exports and refining the legal e nvironment. The concept is to be submitted to the 
Government in the near future. In  accordance with the concept, it is  aimed to increase trade turnover 
by the end of 2008 by 1.5 times compared to that  of 2003, increase export sources to not less than 
USD 100-150 million yearly from 2006, maintain the share of exports in the GDP at no less than 60%, increase the FDIs by the end of 2008 by 2.2 tim es compared to 2003, pursue a more flexible 
import duty rates, promote trade facilitation and make the flow of trade freer by eliminating barriers to trade. 
__________