VZCZCXRO3292
RR RUEHLMC RUEHVC
DE RUEHUM #0110/01 0722258
ZNR UUUUU ZZH
R 122258Z MAR 08
FM AMEMBASSY ULAANBAATAR
TO RUEHC/SECSTATE WASHDC 1957
INFO RUEHBJ/AMEMBASSY BEIJING 6031
RUEHUL/AMEMBASSY SEOUL 3224
RUEHKO/AMEMBASSY TOKYO 2911
RUEHMO/AMEMBASSY MOSCOW 2127
RUEHOT/AMEMBASSY OTTAWA 0588
RUEHML/AMEMBASSY MANILA 1655
RUEHLO/AMEMBASSY LONDON 0282
RUEHBY/AMEMBASSY CANBERRA 0246
RUEHVC/AMCONSUL VANCOUVER 0123
RUEHGV/USMISSION GENEVA 0375
RHEHNSC/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS SECTION 01 OF 02 ULAANBAATAR 000110 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE PASS USTR, DOC/ITA, USTDA, OPIC, AND EXIMBANK 
STATE FOR EAP/CM AND EB/IFD/OIA 
USAID FOR ANE FOR D. WINSTON 
 
E.O. 12958: N/A 
TAGS: ETRD PREL EAID ECON EFIN PGOV MG
SUBJECT: TURF BATTLES HINDER MONGOLIAN EFFORT TO REACH TRANSPARENCY 
PACT WITH U.S. 
 
REF: Ulaanbaatar 0050 
 
SENSITIVE BUT UNCLASSIFIED - NOT FOR INTERNET DISTRIBUTION. 
 
¶1. (SBU) SUMMARY: Turf battles between Mongolian ministries have 
slowed preparations for a series of digital videoconferences on a 
US-Mongolia Transparency Agreement, but progress has been made and 
Mongolia hopes to start such conferences in late March.  D. 
Munkhjargal, a senior official of the Mongolian Ministry of Trade 
and Industry, made this clear in a March 7 discussion with Post's 
Commercial Specialist.  Munkhjargal said negotiations on a 
Transparency Agreement have been delayed by infighting between the 
Ministry of Foreign Affairs and the Ministry of Industry and Trade, 
over which would lead the trade talks.  The Government of Prime 
Minister Bayar has apparently settled the dispute by vesting this 
authority in both ministries, through a joint Task Force dedicated 
to managing bilateral trade relations.  A Transparency Agreement 
would enhance US-Mongolia commercial ties, boost opportunities for 
U.S. businesses, and help Mongolia meet development goals.  END 
SUMMARY. 
 
¶2. (SBU) On March 7, Post's Commercial Specialist spoke with D. 
Munkhjargal, Senior Officer of the Ministry of Trade and Industry's 
(MIT's) Department of Trade and Economic Cooperation, regarding GOM 
preparations for a series of digital videoconferences on a 
US-Mongolia Transparency Agreement (UMTA).  USTR will lead the DVCs, 
which will allow both sides to identify differences and points of 
agreement before negotiations on the UMTA begin in earnest. 
 
¶3. (SBU) Munkhjargal noted that infighting between the Foreign 
Ministry and the Ministry of Foreign Affairs over which would lead 
the trade talks slowed progress toward negotiations on the UMTA.  He 
said the GOM has responded by starting to assemble a "Task Force 
Team" to deal with UMTA and other trade-related matters.  This team 
is to include representatives of the Ministries of Foreign Affairs, 
Industry and Trade, Finance, Justice and Home Affairs, and the 
National Statistics Office.  (Other ministries and agencies will be 
allowed to comment on the proceedings as needed.)  Munkhjargal 
indicated that the GOM will employ this new structure for trade 
agreements with the United States and other nations, marking a new 
approach to bilateral trade relations.  The GOM is still working out 
the precise composition and structure of the Task Force Team, which 
Munkhjargal believes will be finalized by mid-March. 
 
¶4. (SBU) The concept for these DVC discussions sprang from the 
Fourth US-Mongolia Trade and Investment Framework Agreement (TIFA) 
Talks held in Washington on February 4.  During those talks, the GOM 
and USG agreed to move ahead on a UMTA and establish a flexible 
timetable to begin and conclude UMTA discussions (septel).  However, 
the Mongolians agreed to present a list of particular concerns about 
UMTA in advance of any negotiations, so that USTR could determine if 
active pursuit of UMTA at this time was possible.  This presentation 
was scheduled to occur via DVC between March 10 and 14.  However, 
the Mongolian Government recently contacted Post and requested a 
delay until late March.  The GOM assured us that it has every 
intention of holding the DVCs and crafting an UMTA. 
 
¶5. (SBU) We anticipate that the GOM will soon provide us with 
UMTA-related material for consideration in the upcoming DVCs. 
Munkhjargal suggested that USTR and Post consider a late March date 
for the first DVC.  He indicated that he believes that several DVCs 
will be necessary to address GOM and USTR concerns about UMTA.  He 
noted, without elaborating, that preliminary comments from the Task 
Force Team members indicate support for the UMTA in concept, though 
many questions and concerns remain. 
 
COMMENT 
------- 
 
¶6. (SBU) The GOM's move to an apparently permanent, 
inter-ministerial approach to bilateral trade relations is a 
positive outcome of the TIFA/TA process, and could help prevent 
 
ULAANBAATA 00000110  002 OF 002 
 
 
future bureaucratic turf wars.  Technically, the Foreign Ministry 
has authority over any stand-alone, bilateral agreement, while the 
Trade and Industry Ministry has authority over trade agreements. 
Following six months of inter-ministerial gridlock that prevented 
progress toward a Transparency Agreement, the Bayar Government 
directed both sides to settle the matter quickly, to move the issue 
forward. 
 
Minton