On behalf of the European Union, I would like to welcome the Mongolian Delegation led by H.E. Mrs. Battsetseg Batmunk, Minister for Foreign Affairs, Head of Delegation. I would also like to thank the WTO Secretariat and the Government of Mongolia for their reports and the Discussant, H.E. Dr. Rashidi Said (Ambassador of Malaysia) for his contribution.
Mongolia has been persistently supporting multilateral trading system and holding a liberal policy on foreign trade since joined the WTO in 1997, but, actually, trade has always been a key feature in Mongolia history. The East-West Mongol trade routes became the fabled Silk Road, which for the first time linked Europe to Asia, allowing the free flow of ideas, technologies and goods. The stability brought by Mongol rule opened these ancient trade routes to a largely undisturbed exchange of goods between peoples from Europe to East Asia. Aside from facilitating trade, the Mongol influence also improved the communication along the Silk Road by establishing a postal relay system.
Since joining the WTO, Mongolia pursued rigorous market-oriented reforms and now is one of the most open economies in the region.
The EU's bilateral relationship with Mongolia has also developed positively since the last TPR with the EU-Mongolia Partnership and Cooperation Agreement (PCA) entering into force in 2017. The Agreement provides a comprehensive framework for enhancing relations in political, economic and sectoral areas such as agriculture, people-to-people exchanges, research and innovation, environment, culture and education. In 2017, we also established an EU Delegation in Ulaanbaatar.
The EU is Mongolia's fourth largest trading partner and our exports has grown steadily in the last years, reflecting positive changes in Mongolian business environment.
We are fully supportive of Mongolia's efforts to diversify its economy with the special incentive arrangement under the EU Generalized System of Preferences plus (GSP+). Its utilisation rate stands at around 84%, but there is room for improvement.
Further facilitation of the exports of non-mineral products will contribute to the diversification of the Mongolian economy. Capacity building is an essential issue, thus the EU is supporting Mongolia through the dedicated trade-related development assistance (TRAM – “Trade-Related Assistance to Mongolia”), which has delivered promising results in trade policy, trade facilitation and export promotion.
In the partnership with the EBRD, the EU is supporting development of small and medium-sized enterprises (SMEs) in Mongolia. The support focuses on improving access to finance and know-how. As a part of the EU COVID-19 response package in Mongolia, we have secured a further grant of EUR 11 million for the next phase of this project, focusing on minimizing the long-term impact of COVID-19 related economic slowdown for Mongolian SMEs.
EU priorities are to create a level playing field and opportunities for exporters from both countries and EU investors in Mongolia by supporting the development of a predictable business and investment environment. We would like to underline the need of an increased transparency of the procedures put in place in Mongolia. This includes in particular transparency of the government procurement, investments laws and regulations, and requirements for imported goods.
In our experience, foreign investors are usually not treated on the same footing as domestic ones. Moreover, frequent amendments of investment laws and regulations prevents development of a stable and predictable business environment for foreign investors in Mongolia.
We would like also to stress the importance to secure the independence of the judiciary and the fight against the corruption: both these two principles of good governance are put on an equal footing in our bilateral agreement. In this context, the EU follows closely the implementation of the Laws on the Legal Status of Judges, Public Prosecutor's Office and Anti-corruption, which, while ensuring the independence and integrity of judges and prosecutors, have a critical impact on the business climate.
We are interested to hear more on Mongolia’s plans to establish a new Ministry of Planning and Economic Development and its role in trade policy’s making and implementation.
We are also looking forward for Mongolia’s replies to our questions on the new alcohol law. We support the efforts to establish a regulatory framework and the aim to limit alcohol consumption and promote a healthier way of life. However, we are concerned that the draft law is not compatible with the WTO rules and obligations. The draft law seems to grant less favourable treatment to imported goods and foreign producers than to domestic goods and domestic producers, and seems to impose unjustifiable technical barriers to trade. The EU would like also to invite Mongolia to notify this law and other outstanding regulations to the relevant WTO committees.
Finally, let me use this opportunity to congratulate H.E. Mr. Lundeg Purevsuren, Mongolia’s Permanent Representative and Ambassador, on his recent appointment as a Chair of the Council for Trade in Goods and wish him every success.
In conclusion, on behalf of the EU, I wish Mongolia a very productive and successful review.