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Trade turnover between the EAEU and Mongolia increased by 15% in January-August 2019

Trade turnover between the EAEU and Mongolia increased by 15% in January-August 2019

10/22/2019

On October 21, the third meeting of the Joint Working Group on interaction between the Commission and the Government of Mongolia was held at the Eurasian Economic Commission (EEC) headquarters. The Co-chairs of the Group – Sergei Glazyev, Member of the Board – Minister in charge of Integration and Macroeconomics of the EEC, and Batmunkh Battsetseg, Deputy Minister for Foreign Affairs of Mongolia, - confirmed the commitment of the sides to strategic objectives of enhancing fruitful dialogue within the framework of implementing the Memorandum of Cooperation.

 

The sides discussed the issues of trade and economic cooperation between the Eurasian Economic Union (EAEU) States and Mongolia. The meeting was held in a businesslike and positive atmosphere, in the spirit of partnership and mutual understanding.

 

"We have now a good practice of contacts and, in general, an atmosphere of cooperation. Mongolia is a traditional partner for the EAEU, and today we are witnessing how these conventional ties adapt to new realities, and this allows us to interact in the future – Sergei Glazyev stated. - The discussion on the Greater Eurasian Partnership concept is actively gaining momentum. It is through this prism that we now look at coupling with other partner countries and integration associations. Mongolia connects to the "One Belt - One Road" initiative, coupled, in turn, with the EAEU through the "Steppe Way" project.

 

In January-August 2019, the trade turnover of the EAEU countries with Mongolia increased by 15.1% up to 1.2 bln US dollars. However, as the EEC Minister stressed, the trade value does not correspond to potential opportunities. Sergei Glazyev has noted that the Commission is ready to fully contribute to simplifying cooperation between the businesses of the EAEU and Mongolia. In this regard, an overarching objective is to engage entrepreneurs and investors in interacting in the working group format to establish new cooperative ties. 

 

In turn, Batmunkh Battsetseg expressed confidence that "the third working group meeting will give new impetus to developing trade and economic relations of Mongolia and the EAEU Member States, given strong interest of Mongolia to the Union and efforts to create a prosperous region, which refers to the area of harmonious, mutually beneficial and non-discriminatory cooperation". 

 

The Deputy Minister for Foreign Affairs of Mongolia told that the measures taken by the Mongolian Government to diversify the economy, improve the investment climate and business environment as well as support the processing industries are showing positive results. She voiced the successes achieved by the Mongolian economy in recent years: in 2017 and 2018 the GDP grew to 5.3% and 7.2%, respectively; foreign trade turnover increased last year by 20% and exceeded 13 bln US dollars, the volume of foreign investment increased by 18% (up to 2.5 bln US dollars). The upward trend is preserved this year. Agriculture, energy and development of transport infrastructure are priorities of the Mongolian Government.

 

Representatives of relevant EEC departments, officials and business circles of Mongolia, representatives of the EAEU Member States as well as the Eurasian Development Bank (EDB) and the EAEU Business Council participated in the meeting of the Working Group. The event participants analyzed the state of trade and economic cooperation, ways of increasing trade turnover and overcoming the imbalance in mutual trade, considered the joint action plan implemented in 2017-2018, exchanged experience in such spheres as technical regulation, application of SPS measures, customs regulation, peculiarities of doing business, prospects for cooperation between the EAEU Member States and Mongolia in the sphere of industry and a number of other spheres.

 

Otgondavaa Amartuvshin, President of the Chamber of Commerce and Industry of Mongolia, told about the tools for stimulating trade turnover as well as the need to reduce barriers to trade and search for new opportunities to finance export-import operations being at the Chamber’s disposal.

 

The topic of finding new ways to solve bottlenecks in the sphere of financing trade operations and joint projects went further in the speech of Andrey Petrosyan, Head of the Center for Integration Studies of the Eurasian Development Bank. He told about the EDB financial capabilities and readiness to cooperate with the use of national currencies.

 

Stanislav Naumov, Director General of the Secretariat of the EAEU Business Council, expressed readiness to support, on the behalf of the Council, the interaction between entrepreneurs of the Union and Mongolia in a practical way. He informed about the plans to visit Mongolia with the EAEU business mission in November this year. It is expected that cooperation in the sphere of agriculture, industry, transport infrastructure and others will be the focus of attention. Moreover, Stanislav Naumov announced the "EAEU – Mongolia" business forum planned in December in Moscow, during which the Mongolian entrepreneurs could study in detail the prospects of selling their products in the Union’s single market. The representative of the EAEU Business Council announced readiness to establish direct interaction with the Mongolian CCI up to endowing the latter with the status of an Associate Member in the Business Council.

 

The working group meeting resulted in developing specific steps to deepen and systematize the interaction between the EAEU and Mongolia. The sides agreed to conduct joint analytical work on additional review of possibilities for developing trade and economic cooperation, to develop a joint action plan between the EEC and the Government of Mongolia for 2020-2021, to actively involve banks of Mongolia and the Union countries in national currency transactions and to continue studying the issue of creating a free trade area between the EAEU countries and Mongolia. 

 

The sides agreed to hold the next meeting of the working group in July-August 2020 in Mongolia.

 

For reference

In 2018, the trade turnover of the EAEU Member States with Mongolia increased by 20% (up to 1.8 bln US dollars, including exports increased by 20.5% up to 1.7 bln US dollars, and imports increased by 6.2% up to 46.6 mln US dollars). The supply of mineral fuel, metals and articles made therefrom as well as food and agricultural raw materials were the key drivers of the increase in exports of the EAEU to Mongolia. Imports from Mongolia increased mainly due to increased imports of food and agricultural raw materials, except textiles (mainly horse meat, frozen beef, prepared or canned meat products and sausages) as well as mineral products (feldspar, tungsten ores and concentrates).

 

In January-August 2019, the trade turnover increased by 15.1% (up to 1.2 bln US dollars), including exports increased by 16% (up to 1.1 bln US dollars), but import decreased by 17.1% (up to 23.4 bln US dollars). The increase in supplies of mineral fuel as well as machinery, equipment and vehicles is the key reason for the growth in exports. Imports from Mongolia decreased due to a drop in imports of food products and agricultural raw materials, except textiles.

 

The Memorandum of Cooperation between the Eurasian Economic Commission and the Government of Mongolia was signed on June 17, 2015. In accordance with the Memorandum, the sides agreed to develop trade and economic cooperation in the sphere of agricultural sector, competition and trade policy, technical regulation, sanitary, veterinary-sanitary and phytosanitary quarantine measures.