TRADE POLICY REVIEW: MONGOLIA
15 and 17 March 2005

Concluding remarks by the Chairperson


See also:
> Press release: Early market-oriented reforms helped the transition to a stable economic growth


This first Trade Policy Review of Mongolia has given us a better understanding of its trade and related policies, and of the challenges it faces. The preparation of an excellent Country Report by Mongolia has provided a context for domestic exchange and reflection, and the comprehensive Report by the Secretariat has provided a valuable tool both for further domestic reflection and for transparency within the WTO. Our dialogue has been stimulated by the full and open engagement of the high-level Mongolia delegation led by H.E. Mr. Sukhbaatar BATBOLD, Minister for Industry and Trade, as well as by our discussant's insightful comments and many thoughtful interventions by Members.

Members commended Mongolia for the very significant progress it has made in its transition from a centrally planned to a market-based economy; this has led to significant growth, especially since 2002, with a real turnaround in agriculture and a buoyant services sector. Members also noted that Mongolia's still narrow production base made it vulnerable to external shocks; they urged Mongolia to continue its market-oriented reform process, such as continued liberalization of trade in services, with a view to enhancing competition.

Members welcomed Mongolia's active participation in the multilateral trading system, including its support for the Doha Development Agenda, particularly in respect of agriculture and trade facilitation; the latter might address difficulties associated with Mongolia's land-locked status. Members expressed their appreciation of the steps taken by Mongolia to liberalize its trade and investment regime; currently most imports enter Mongolia either duty-free or subject to a uniform tariff of 5%. Many Members urged Mongolia to narrow the gap between applied and bound MFN tariff rates, to increase predictability, while others believe this gap to be consistent with Mongolia's current level of development. Members encouraged Mongolia to eliminate its export duties, which might be inducing smuggling. Members urged Mongolia to extend national treatment to imports of some items subject to excise tax, and to eliminate tax incentives based on export performance for business entities with foreign investment.

Members also expressed their appreciation of Mongolia's measures to privatize its state-owned enterprises. Some Members encouraged Mongolia to employ a more open government procurement regime. They encouraged Mongolia to further align its standards and technical regulations with international norms; some Members queried the transparency of its technical regulations. Steps to strengthen intellectual property rules and their enforcement were welcomed. Members enquired about factors discouraging foreign direct investment (FDI) into Mongolia; in their view, further action to assure the predictability and transparency of the trade and investment regimes would create a more investment-friendly environment.

On sectoral issues, Members welcomed reforms in agriculture, mining and services sectors, in particular, in financial services and telecommunications. They believed that reform in these sectors should continue with a view to attracting more FDI.

Members appreciated the oral and written responses to their questions provided by the Mongolian delegation, and look forward to receiving further written responses to their questions at the earliest possible date.

This successfully concludes our first Review of Mongolia. Members have shown a keen interest in Mongolia's trade and related policies and its participation in the WTO. In this context, I would encourage Mongolia to continue its support for the multilateral trading system. I also hope that Mongolia will take to heart Members' concerns, and that it will continue with its reform process. At the same time, I also invite Members to assist Mongolia by providing adequate technical assistance, including in trade capacity building, and by further opening their markets to Mongolia's exports.