MONGOLIA AND THE EU’s GSP

Economic Impact

Mongolia can be considered a highly vulnerable economy and is noticeably below the threshold of 7.4%, indeed its vulnerability ratio for 2019 stood at zero. Mongolia’s export is highly concentrated in few products. The minimum export diversification threshold stands at 75% whereas Mongolia’s percentage was 92.3% in 2019.

Over the years, the preference utilisation rate has shown considerable fluctuations, especially between 2011 and 2016. The decrease in preference utilisation during this period can be traced back to an increase in GSP eligible exports that were traded under most favoured nation rates. The preference utilisation increased 8 percentage points between 2016 and 2018, although total GSP eligible imports decreased. Likewise, preference utilisation has increased for individual product sections for example for fish and footwear imports. The value of EU imports from Mongolia using GSP+ has remained relatively steady, at around 28% of total imports. Overall, Mongolia currently makes notable use of GSP+ preferences, allowing the country to benefit from the arrangement.

The largest product sections under the GSP+

SUSTAINABLE DEVELOPMENT AND MONITORING PRIORITIES

Mongolia ratified 27 core conventions on human rights, labour rights, environmental protection, and good governance. The most recent monitoring results over the period 2018-2019 showed that Mongolia maintained ratification of all relevant conventions, and, moreover, ratified additional conventions in the areas of human rights, labour rights and environmental protection voluntarily. Even though Mongolia continues to face constraints with regard to capacity and expertise, the country overall manages to fulfil its reporting obligations with the relevant monitoring bodies.

Monitoring priorities during the reporting period 2018-2019

During the reporting period 2018-2019, the EU focussed its monitoring activities on six priority areas. Notable progress has been made to contain child labour while corruption continues to pose a key challenge to policy makers. The revised Labour Code has been pending during the reporting period, such that the implementation of fundamental ILO conventions remains incomplete. National debates on a possible reinstatement of the death penalty have been silenced after the Mongolian government judged it incompatible with the country’s international obligations.

1. HUMAN RIGHTS

The level of ratification of core human rights treaties is high and goes beyond the requirements of GSP+. Mongolia has ratified 9 out of 10 human rights treaties except for the Convention on the Protection of the Rights of all Migrant Workers and Their Families, which, however, is not included in GSP+ obligations. According to the most recent GSP report, covering the period 2018-2019, the country made improvements in the level of compliance, especially in the area of implementing human rights obligations to promote and protect children’s and women’s rights, where new policies were adopted (Child Rights Act and Child Protection Act), and budgets substantially increased. Mongolia takes part in multilateral initiatives such as the Global Alliance for Torture-Free Trade and the International Contact Group on Freedom of Religion. Following recommendations by the Committee Against Torture, Mongolia committed to establishing an independent mechanism in order to investigate complaints of torture. Likewise, in response to the concerning situation of human rights defenders, Mongolia has extended its invitation to the UN Special Rapporteur. In recent time, the public debate around a reintroduction of the death penalty intensified. An assessment by the government, however, determined an incompatibility of a reintroduction with its international obligations and dropped the idea. There has been some concern about the independence of the judiciary resulting from a series of dismissals of high-level members of the judiciary. Additionally, the situation of human rights defenders remains problematic as no law on their protection has been passed yet. Finally, amendments to a number of laws indicate increasing concentration of political power.

Ratified

• Convention on the Prevention and Punishment of the Crime of Genocide (1948)
• International Convention on the Elimination of All Forms of Racial Discrimination (1969)
• International Covenant on Civil and Political Rights (1976)
• International Covenant on Economic, Social and Cultural Rights (1976)
• Convention on the Elimination of All Forms of Discrimination against Women (1981)
• Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (1987)
• Convention on the Rights of the Child (1990)

2. LABOUR RIGHTS

Mongolia has ratified all 7 ILO conventions required by GSP+ and has additionally ratified the Forced Labour Convention (1930) and its 2014 Protocol. Mongolia participated in an EU funded project with the ILO to strengthen national capacities to improve ILS compliance and reporting between 2015 and 2017. This initiated a revision of the Labour Law and to improve alignment with fundamental principles and rights at work, which is currently under discussion in Parliament. Additional progress was made counteracting child labour through the strengthening of responsible institutions. Problems continue to appear with regard to limited power and resources available to the labour inspectorate which impedes monitoring activities and enforcement of existing labour laws. Another area of concern is child labour. Even though Mongolia has improved the legal framework with regard to children’s rights, child labour continuous to exist especially in hazardous areas such as mining and horse racing.

Ratified

• Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) 
• Right to Organise and Collective Bargaining Convention, 1949 (No. 98) 
•  Forced Labour Convention, 1930 (No. 29)  (and its 2014 Protocol )
• Abolition of Forced Labour Convention, 1957 (No. 105) 
• Minimum Age Convention, 1973 (No. 138) 
• Worst Forms of Child Labour Convention, 1999 (No. 182) 
• Equal Remuneration Convention, 1951 (No. 100) 
• Discrimination (Employment and Occupation) Convention, 1958 (No. 111) 

3. ENVIRONMENTAL PROTECTION

With urban pollution ranking among the highest in the world, the area of environmental policies and protection remains challenging for Mongolia, though the country shows strong commitment through robust laws on environmental standards and safeguards. Next to maintaining ratification of all eight international conventions on environmental protection required for GSP+, Mongolia has additionally ratified the Vienna Convention for the Protection of the Ozone Layer and the Nagoya Protocol on Access and Benefit-Sharing. Furthermore, Mongolia ratified the Paris Agreement in September 2016 and submitted its Intended Nationally Determined Contribution (INDC), which envisages a 14% reduction of GHG emissions by 2030. Being confronted with substantial environmental challenges from pollution and extractive industries, Mongolia has set strong environmental standards and safeguards to protect the environment. Nonetheless, future engagement is needed with regard to air pollution and the environmental compatibility of mining projects. Moreover, restrictive capacities partly impede the effective implementation of the required conventions. For example, Mongolia is still working on adjusting its legislation to the requirements of CITES as well as effectively implementing the Cartagena and Stockholm Conventions

Ratified

• Convention on International Trade in Endangered Species of Wild Fauna and Flora (1973)
• Montreal Protocol on Substances that Deplete the Ozone Layer (1987)
• Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal (1989)
• Convention on Biological Diversity (1992)
• United Nations Framework Convention on Climate Change (1992)
• Cartagena Protocol on Biosafety (2000)
• Stockholm Convention on persistent Organic Pollutants (2001)
• Kyoto Protocol to the United Nations Framework Convention on Climate Change (1998)

4. GOOD GOVERNANCE

Mongolia has ratified all four required conventions on good governance and shows strong commitment and has strengthened its efforts with regard to the national drug control policy. Here, again capacity constraints pose a challenge to entirely effective implementation. Corruption remains a core challenge particularly in the public sector and the judiciary. The topic of corruption has increased in public attention through several high-level corruption cases in recent years. Even though the government is dedicated to counteracting corruption through an enhancement of the legal and institutional framework, important regulations on anti-money-laundering and counter-terrorist financing remain missing.

Ratified

• United Nations Single Convention on Narcotic Drugs (1961)
• United Nations Convention on Psychotropic Substances (1971)
• United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988)
• United Nations Convention against Corruption