TRADE FACILITATION ISSUES AMONG THE GTI MEMBER COUNTRIES

Presented by Mr.SARANDAVAA.MDeputy CEO of MNCCI

MONGOLIAN NATIONAL CHAMBER OF COMMERCE AND INDUSTRY

MONGOLIA …

AT THE CENTER OF GLOBAL MARKETS ADVANTAGES OF MONGOLIA

1. NEIGHBORING WITH TWO OF THE LARGEST GLOBALECONOMIES- CHINA AND RUSSIA

2. LARGE MINERAL RESOURCE BASE THAT CAN BELEVERAGED FOR VALUE-ADDED PROCESSING

3. HUGE POTENTIAL IN AGRICULTURE AND HUSBANDRY -MORE THAN 60 MILLION LIVESTOCK

4. VIBRANT AND FLOURISHING DEMOCRATICGOVERNMENT AND FRIENDLY FDI ENVIRONMENT

5. PLENTY OF DEVELOPMENT PROJECTS ININDUSTRIALIZATION & INFRASTRUCTURE

6. HUMAN CAPACITY (YOUNG GENERATION)

7. EPA BETWEEN MONGOLIA AND JAPAN

8. EPA BETWEEN EU AND MONGOLIA,

GDP-2015• TOTAL: 12.2 BLN USD• PER CAPITA: 4200 USD• GROWTH RATE: 2,3% IN 2015FDI• TOTAL: 180 MLN USDTRADE• TRADE TURNOVER: 8466.7 MLN USD• EXPORT: 4669.6 MLN USD• IMPORT: 3797.2 MLN USDOTHER MACROECONOMIC FIGURES• INFLATION RATE: 2.3 %• CURRENCY RESERVES: 0,2 BLN USD• BUDGET BALANCE: -12,8% OF GDPSOCIAL STATISTICS• AVERAGE MONTHLY WAGE: 420 USD• UNEMPLOYMENT: 8,3%

POPULATION: 3 MILLION (SOURCE: POPULATION REGISTER)POPULATION DENSITY: 1.92 IN HABITANTS PER SQUARE KM

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FDI in Mongolia:

COUNTRIES 2014 (mln.USD) % 2015(mln.USD) %

RUSSIA 1610,9 15% 1097,9 13%

CHINA 6841,3 62% 5300 63%

KOREA 366,1 3,3% 325,3 3,8%3

Foreign trade turnover:

COUNTRIES 2014 (mln.USD) % 2015(mln.USD) %

RUSSIA 1610,9 15% 1097,9 13%

CHINA 6841,3 62% 5300 63%

KOREA 366,1 3,3% 325,3 3,8%

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IndicatorDoing

business 2017 rank

Doing business 2015 rank

Change in rank

2017/2015Protecting minority investor

26 17 -9

Starting a business 36 42 6Registering property 46 30 -16Getting credit 62 61 -1Paying taxes 35 84 49Trading across border 103 173 70Enforcing contract 85 24 -61Getting electricity 137 142 5Dealing with construction permits

29 74 45

Resolving Insolvency 91 90 -1

Mongolia advanced in Doing Business 2017 from 2015, Ranked to 64th from 72nd

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THE EASE OF TRADING ACROSS BORDERS

№ Export Import

1 Certificate of origin Certificate of origin

2 Commercial invoice Commercial invoice

3 Customs declaration Customs import declaration

4 Packing list Packing list

5 Permission of sanitary Railway bill

6 Railway bill Sales Contract

7 Sales Contract

THE NUMBER OF DOCUMENTS NEEDED TO FOREIGN TRADE

Source: doing business 2016

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Trading across borders (ranking)

Country Time to export Cost to export Time to import Cost to import Rank

Documentary compliance

(hours)

Border compliance

(hours)

Documentary compliance

(US$)

Border compliance

(US$)

Documentary compliance

(hours)

Border compliance

(hours)

Documentary compliance

(US$)

Border compliance

(US$)

Mongolia 168 62 64 191 115 48 83 210 103

China 21.2 25.9 84.6 522.4 65.7 92.3 170.9 776.6 96

Russia 25.4 96 92 765 42.5 96 152.5 1125 140

Source: Doing business 2017- http://www.doingbusiness.org 7

Mongolian trade volumes in GTI countries

Exported valuein 2011 (th.$)

Exported value in 2012 (th.$)

Exported valuein 2013 (th.$)

Exported value in 2014 (th.$)

Exported value in 2015 (th.$)

P.R.China 4,404,561 4,028,461 3,700,269 5,070,107 3,897,417

Russian Federation 96,342 79,566 61,773 61,607 76,872

Korea, Republic of 37,873 12,296 13,024 13,496 66,572

Import value from GTI countries

Exporters

Trade Indicators Tariff (estimated) applied

by Mongolia

(%)

Imported value 2015

(USD thousand)

Trade balance 2015 (USD thousand)

Share in Mongolia's imports (%)

Imported growth in value between 2011-2015 (%, p.a.)

Imported growth in value between 2014-2015 (%, p.a.)

Ranking of partner

countries in world exports

Share of partner

countries in world exports

(%)

Total export growth in value

of partner countries

between 2011-2015 (%, p.a.)

China 1,360,707 2,536,710 35.8 -8 -20 1 14 5Russian

Federation 1,020,706 -943,834 26.9 -11 -34 15 2.1 -8

Korea, Republic of

258,697 -192,125 6.8 -9 -26 6 3.2 -1

Export value to GTI countries

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Logistic performance index 2016

Mongolia

Year LPI rank

LPI general rank

Customs Infrustructure International transport

Logistic competence

Tracing Time

Indicator Indicator Indicator Indicator Indicator Indicator

2016 108 2.51 2.39 2.05 2.37 2.31 2.47 3.4

2014 135 2.36 2.20 2.29 2.62 2.33 2.13 2.51

2012 140 2.25 1.98 2.22 2.13 1.88 2.29 2.99

2010 141 2.25 1.81 1.94 2.46 2.24 2.42 2.55

2007 136 2.08 2.00 1.92 2.50 1.80 2.00 2.25

Source: LPI 2016, world bank

Counrties Rank Index Customs Infrustructure International transport

Logistic competence Tracing Time

...<5Rank

Indicator

Rank Indicator

Rank

Indicator

Rank Indicato

r

Rank

Indicator

Rank

Indicator

South of Korea 24 3.72 26 3.45 20 3.79 27 3.58 25 3.69 24 3.78 23 4.03China 27 3.66 31 3.32 23 3.75 12 3.7 27 3.62 28 3.68 31 3.9Russia 99 2.57 141 2.01 94 2.43 115 2.45 72 2.76 90 2.62 87 3.15Mongolia 108 2.51 100 2.39 140 2.05 129 2.37 129 2.31 108 2.47 65 3.4

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Main activities of Trade Facilitation in Mongolia

• Mongolia has established SEW to facilitate International trade since 2005.

• The Economic Partnership Agreement (EPA) between Mongolia and Japan took effect on 7 June, 2016.

• Established FTA expert working group between Mongolia and RP Korea.

• Established legal environment :Trade Law

• Three types of Customs tariff: MFN, preferential and normal will take effect from 01 January 2017,

• APTA welcomed Mongolia as its seventh member in 2013

• Korea’s largest retailer E-mart has opened its first Mongolian store on 28 July, 2016

• Alibaba group is working to launch Mongolian products on its website.

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WE WILL:

INFLUENCEADVOCATE to create a favorable business environment, COORDINATECONNECTSUPPORT to develop business.

POLICY ADVOCACY:

· TO CREATE A FAVORABLE LEGAL ENVIRONMENT FOR DOINGBUSINESS IN MONGOLIA

· TO REPRESENT AND PROTECT COMMON INTERESTS OF THEBUSINESSES AND PRIVATE SECTOR

· TO PREPARE AND PUSH FORWARD RECOMMENDATIONS AND DRAWFINAL PROPOSALS IN DETERMINING SOCIAL, ECONOMIC ANDBUSINESS DEVELOPMENT POLICIES

· TO DEVELOP A MECHANISM TO INTENSIFY PUBLIC PRIVATE SECTORPARTNERSHIP AND DIALOGUE IN MONGOLIA

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MNCCI today …3500+ MEMBERS

BRANCH OFFICES IN 21 PROVINCES 25 REPRESENTATIVES ABROAD

32 BUSINESS COUNCILCOOPERATION WITH 120 INTERNATIONAL TPO’s AND CCI’s

IN OVER 100 COUNTRIES

MNCCI is a nationwide NGO with voluntary membership that comprises ofsmall, medium-sized and large-scale enterprises, which contribute

significantly to the Mongolian social and economic sector.

… OUR MEMBERS PRODUCING 72% OF MONGOLIAN NATIONAL GDP …

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№ Service Number 1 Certificate of Origin Granted 8210

certificates2 Trademark 64

3 Product Design 2

4 Patent 7

5 Arbitration Case Out of 82 case requested41 solved cases

6 ‘BMEZ’ Mediation Center 3

7 Consulting service related to business law and legal environment 500

8 Certificate of Force Majeure Circumstances 319 BARCODE 650

10 ATA Carnet 4

11 Independent Expertise 789

12 ‘CERTIFIED ORGANIC’ label 8

13 ‘GREEN HOTEL’ label 2

Main services of MNCCI:as of second quarter and the first half of 2016

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• CEO SUMMIT

• NATIONAL CSR FORUM

• THE WORLD ECONOMIC FORUM'S ANTI-CORRUPTION NETWORK (PACI)

• B2B NETWORKING

• BUSINESS FESTIVAL

• BEST NATIONAL BRAND

• INTERNAL BUSINESS MEETINGS AND FORUMS

• BUSINESS TOURS

Events organized by MNCCI:

MONGOLIA-KOREA business forum:

• Park Geun-hye, the President of the Republic of Korea, paid an Official Visit to Mongolia on 17-18 July, 2016.

• Business forum was held on 18 July, 2016• Organized by MNCCI and KCCI • Approximately 190 business representatives from ROK • 200 participants from Mongolian Government and corporations

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Overall competitiveness Index and ranking ofEastern region /Mongolia/

4.29

5.64

6.66.1

6.55

7.48

4.07

5.89 6.23

Dornod Khentii Sukhbaatar

Economic Development 2013 2014 2015

100

86 85

78

68 67 66 65 64 64 6259 58 57 57 57 57 57 56

53

39

0

20

40

60

80

100

120

Overall Competitiveness Index

Score

Source:2015 competitiveness Index www.aimag.mn

Future cooperation in trade facilitation

• To create information banner including customs procedure, customs tariff, trade regulations and SPS requirements of GTI countries on GTI website.

• To cooperate on mutual recognition of SPS laboratory test between GTI countries in order to facilitate customs clearance.

• To organize Chambers’ business forum between GTI countries to discuss business obstacles and cooperation.

• To organize GTI Expo exhibition in order to promote export.

• To cooperate in order to reduce import tariff of GTI regional customs

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• To collaborate GTI border management (capacity building, technical assistance, ICT etc.)

• To establish sub-regional SEW in GTI countries

• Establish GTI transport route committee.

• To collaborate GTI border management (capacity building, technical assistance, ICT etc.)

• To establish sub-regional SEW in GTI countries

• Establish transport route sub-committee.

• To organize meetings of transportation companies

• To organize a business visit to customs boarder of GTI countries and meetings of the authorities of boarders.

Future cooperation in trade facilitation

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