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