The Expected Effect of Korea-Mongolia FTA and EPA

Abstract

On December 30, 2021, the Mongolian government enacted a “New Revitalization Policy” to accelerate economic development and enhance the effectiveness of the long-term development policy “Vision 2050” after the COVID-19. Mongolia is currently a member of the Japan-Mongolia Economic Partnership Agreement and the Asia-Pacific Trade Agreement(APTA). The joint research on the Economic Partnership Agreement with Korea-Mongolia and Mongolia-China are completed. Joint research of a free trade agreement with Mongolia and EEU(Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan) is in progress. Economic cooperation between Korea and Mongolia is not showing good results compared to current political, social, and cultural cooperation. The expected effects of the conclusion of the Economic Partnership Agreement can be summarized as follows. First, if the tariff barriers on Korea-Mongolia trade are gradually resolved through the conclusion of the economic partnership agreement, the volume of trade is expected to increase significantly. Second, the inclusion of special information on investment in the bilateral economic partnership agreement is expected to improve Korea’s FDI environment with Mongolia, and increase investment in mining, agriculture and infrastructure and SMEs. As the tree planting campaign is a nationwide campaign, demand for forestry machines, equipments, and irrigation systems is expected to expand gradually. Korea has become a representative country that has succeeded in foresting project of Mindungsan(bald mountain). Korea’s forest diplomacy also played a major role in fields such as greening projects, desertification prevention projects, carbon emissions, and global warming climate countermeasures on the international stage. The “Planting 1 Billion Trees” campaign to respond to climate change in Mongolia can be an opportunity for Korean companies.