Mongolia’s first and only free trade agreement (FTA) is with Japan. The “Japan–Mongolia Economic Partnership Agreement” (EPA) inevitably has had various adverse impacts on exports to Mongolia from the US and Canada, because of preferential tariffs accorded to Japanese competitors of North American companies. Previous Mongolian Governments had consistently offered to start FTA negotiations with Washington and Ottawa. Hogan Lovells (Mongolia) LLP has published a useful summary of the EPA, which was concluded in February 2015 and entered into force on June 7, 2016. One of the Mongolian partners of Hogan Lovells will speak at the NAMBC’s AGM on April 27 in Washington, DC.
Both Japan and Mongolia are parties to the Marrakesh Agreement Establishing the World Trade Organization, dated 15 April 1994 (“WTO Agreement”). Both parties also joined the Agreement on Trade-Related Aspects of Intellectual Property Rights in Annex 1C to the WTO Agreement (“TRIPS Agreement”). Certain commitments under the EPA are supplementary to existing commitments of the contracting parties under the WTO Agreement and the TRIPS Agreement. Mongolia is not a signatory to the WTO Procurement Code, although the US Government has regularly urged Mongolia to join; Japan is a signatory.
In late March 2017, Japanese Foreign Minister Fumio Kishida and Mongolian Foreign Minister Tsend Munkh-Orgil signed a bilateral action plan in Tokyo for 2017-2021 for further implementation of the EPA, plus bilateral cooperation in political, security and economic fields not covered in the EPA. On the economic front, the plan calls for speedy implementation of the bilateral FTA and improving the FDI environment. Separately on the same day, Japan committed US$850 million in soft loans to Mongolia as part of a bailout to help rescue the country’s economy; details are still under discussion.
Click here for Hogan Lovells Japan EPA analysis
Click here for full text of Mongolia-Japan EPA