VZCZCXRO9236
PP RUEHLMC RUEHVC
DE RUEHUM #0159/01 0670524
ZNR UUUUU ZZH
P 080524Z MAR 07
FM AMEMBASSY ULAANBAATAR
TO RUEHC/SECSTATE WASHDC PRIORITY 0891
INFO RUEHMO/AMEMBASSY MOSCOW 1710
RUEHBJ/AMEMBASSY BEIJING 5452
RUEHUL/AMEMBASSY SEOUL 2661
RUEHKO/AMEMBASSY TOKYO 2401
RUEHOT/AMEMBASSY OTTAWA 0401
RUEHML/AMEMBASSY MANILA 1319
RUEHLO/AMEMBASSY LONDON 0101
RUEHBY/AMEMBASSY CANBERRA 0109
RUEHVC/AMCONSUL VANCOUVER 0048
RUEATRS/DEPT OF TREASURY WASHDC
RUCPODC/USDOC WASHDC 1211
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC 0496

UNCLAS SECTION 01 OF 02 ULAANBAATAR 000159 
 
SIPDIS 
 
SIPDIS 
 
STATE PASS USTR, USTDA, OPIC, AND EXIMBANK 
STATE FOR EAP/CM AND EB/IFD/OIA 
USAID FOR ANE FOR D. WINSTON 
MANILA AND LONDON FOR ADB, EBRD USEDS 
TREASURY FOR USEDS TO IMF, WORLD BANK 
 
E.O. 12958: N/A 
TAGS: ETRD EAID PREL EMIN ECON PGOV MG
SUBJECT: USG Trade-Related Assistance to the GOM 
 
 
C O R R E C T E D  C O P Y  (RETRANSMIT A CLEAN COPY) 
 
¶1.  SUMMARY:  In the upcoming bilateral Trade and Investment 
Framework Agreement (TIFA) talks, Mongolia continues to ask for 
trade-related technical assistance.  USAID is already providing 
extensive help in a number of areas, including trade policy and 
negotiations, creation of a single window for trade facilitation, 
and efforts to increase government transparency.  We suggest that in 
the TIFA talks, the U.S. encourage Mongolia to do its part in these 
areas.  End summary. 
 
Trade Policy: USAID Helping, GOM Must Act Too 
--------------------------------------------- 
 
¶2.  In late 2004, USAID's Economic Policy Reform and Competitiveness 
Project (EPRC) concluded that the Government of Mongolia largely 
lacked the structures, processes and professional staff required to 
manage competitive international trade.  In March 2005, EPRC 
proposed the creation of a Trade Analysis Unit and Negotiations 
(TANU).  EPRC negotiated with and partnered with German aid agency 
GTZ and the UNDP to launch the unit formally in July 2006. 
 
¶3.  Staffed with GTZ and UNDP consultants,  TANU performs technical 
analyses and prepares briefings for GOM trade negotiators.  EPRC and 
GTZ contribute short-term technical assistance to help TANU prepare 
trade analyses.  TANU does not currently have trade negotiators due 
to shortage of funds. 
 
¶4.  EPRC has proposed the creation of a Trade Policy Council (TPC). 
TANU would report to TPC through a TPC Technical Secretariat in the 
Ministry of Industry and Trade.  The proposal has gone through 
several rounds of discussions and a government decree has been 
drafted.  EPRC/USAID have mandated official promulgation of the 
decree to establish the TPC as a condition precedent to provide TANU 
with computer systems and networks to enable them to function 
efficiently. 
 
¶5.  The proposed Council and its technical secretariat would: 
(a)oversee the coordination of foreign trade policy and analysis;(b) 
make decisions on positions in trade-related international 
negotiations and meetings; (c)oversee coordination of agencies 
involved in foreign trade-related issues such as customs tariffs, 
VAT at the border, standards, inspections, and compliance with 
international trade agreements; (d) brief Parliament; and (e) 
oversee the development and implementation of public relations 
efforts on trade issues; and secure resources from donors and 
international organizations to provide training to selected 
Mongolian international trade negotiators. 
 
¶6.  During the TIFA talks, we suggest that the USG: 
 
-- Encourage the GOM to pursue and develop TANU further.  TANU is 
running on a shoestring budget.  The limited USAID resources to 
support this will not go far, and our own budget situation is tight 
(overall USAID allocations to Mongolia dropped from $10 million in 
FY 2005 to $5.6 million in FY 2007).  Increased GOM support is 
needed. 
 
-- Encourage the GOM to set up the TPC and use it as a mechanism to 
rationalize and manage its trade policy making. 
 
Customs: Stay the Course Toward a Single Window 
--------------------------------------------- -- 
 
¶7.  As a result of EPRC discussions with the GOM, in October 2006 
the Ministry of Finance (MoF) passed Resolution 251 to establish a 
working group (WG) to implement the concept of a single window for 
trade facilitation.  Another decree made the Director of the 
Information and Communication Technology Authority (ICTA) Chair of 
this WG.  At the request of the MoF, EPRC will provide technical 
assistance to support these efforts.  Agencies involved in the WG 
include the Mongolian National Chamber of Commerce and Industry 
(MNCCI), The Open Society Forum (OSF), the Ministry of Industry and 
Trade, the Customs General Administration of Mongolia (CGAM), the 
Mongolian Agency for Standardization and Metrology (MASM), the 
Information Communication and Technology Agency (ICTA), and the 
State Specialized Inspection Agency (SSIA). 
 
ULAANBAATA 00000159  002 OF 002 
 
 
 
¶8.  On December 18, the Single Window for Trade Facilitation Working 
Group held its first formal meeting, with Minister Bayartsaikhan 
(MoF) acting as chair.  EPRC prepared a paper on the concept of a 
single window for trade facilitation, a summary of successful 
international experiences in implementing the concept, and a 
proposed action plan to implement the single window in Mongolia. 
With minor changes, the WG accepted and adopted the project 
proposals and MoF Minister asked ICTA to prepare a national program 
and agreement for establishing foreign trade single window with the 
help of EPRC.  At the Minister's request, EPRC has assisted with the 
drafting of an inter-agency agreement to implement the single window 
for trade facilitation.  The draft agreement incorporates comments 
and its signing is pending. 
 
¶9.  EPRC identified the Societe Generale de Surveillance (SGS) as a 
potential partner in a private or public-private partnership company 
(to be determined through discussions with the GOM).  SGS has been 
an investor and technology provider in successful single electronic 
window ventures for trade facilitation.  EPRC negotiated a visit 
from their team in late February to expose the WG to state-of-the 
art practices in single electronic windows for trade facilitation. 
At the first WG, Customs formally proposed a suggestion EPRC had 
made concerning negotiating with ADB to use some of the proceeds 
from an approved ADB loan to modernize customs as GOM equity 
contribution in the yet-to-be-formed company. 
 
¶10.  During the TIFA talks, we suggest that the USG: 
 
-- Encourage the GOM to "stay the course" on the single window 
effort, which will probably take some 2 or 3 years to complete. 
 
Transparency: Start Publishing! 
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MINTON