Trade and Investment
Since the commencement of diplomatic relations between Mongolia and the United States in 1987, bilateral trade and economic ties have expanded, with Mongolia offering business opportunity the gateway into fast-growing and giant markets of its neighbors, China and Russia.
Mongolia signed with the United States a number of agreements and treaties with the aim of creating favorable legal framework and advancing and promoting economic relations between the two countries.
- Following a Agreement on Trade relations was signed in 1991, Mongolia was granted most-favored-nation (MFN) trading status—now referred to as Normal Trade Relations (NTR) and the United States granted permanent NTR status to Mongolia since 1999.
- Treaty Concerning The Encouragement and Reciprocal of Investment was signed in 1994.
- By signing a bilateral Trade and Investment Framework Agreement /TIFA/ in 2004, the two sides established a Mongolia-United States Council on Trade and Investment. Annual TIFA meetings have been held.
- The two sides created the U.S.-Mongolian Business Forum to hold annual meetings involving government and private sector officials. The most recent forum was held in Las Vegas in September 2012 as part of the exhibition “MINExpo INTERNATIONAL- 2012” and focused on mining sector.
- As a developing country, Mongolia has been a beneficiary of Generalized System of Preferences since 1999.
- Mr. Bold Luvsanvandan, Minister for Foreign Affairs of Mongolia and Ambassador Michael Froman, United States Trade Representative signed the Agreement on Transparency in Matters Related to International Trade and Investment between Mongolia and the United States of America on September 24, 2013. The purpose of the agreement, which applies to measures affecting trade in goods, cross-border trade in services, bilateral investment, trade in financial services and intellectual property rights, is to promote transparency in policy-making, as well as to facilitate exchange of information between the Governments of the two countries.
Mongolia-U.S. trade relations
The U.S. is an important trading partner for Mongolia. Total goods trade between Mongolia and the U.S. amounted to US$539.6 million in 2012. This made the U.S. 3rd largest trading partner after China and Russia. Trade deficit with the U.S. totaled US$332.5 million.
Exports to the U.S.
Mongolia’s exports to the U.S remain extremely small. Mongolia exported US$3.5 million in goods to the U.S. including tungsten concentrates. Mongolia’s exports to the U.S. peaked in 2004, but have steadily declined each year since, largely due to a sharp fall in the U.S. imports of apparel products.
Imports from the U.S.
Mongolia imported US$535 million in goods from the U.S. in 2012, making the U.S. 3rd largest goods import source. Key imports included motor vehicles, aircraft and civil engineering equipments.
According to the Ministry of Economic Development of Mongolia, the U.S. was the 8th largest foreign direct investor as of 2012. The U.S. direct investments into Mongolia reached US$292 million, which were mainly concentrated in mining (38%) and wholesale & retail trade and catering (36%).