Mongolia: Regional Upgrades of Sanitary and Phytosanitary Measures for Trade Project

Industry and trade / Trade and services

Accounting for about 14% of GDP and 28% of the country's employment in 2014, agriculture remains the backbone of the rural economy in Mongolia. Due to its labor-intensive nature, agricultural production is an important source of employment in rural areas. About 85% of the rural population is dependent upon livestock, in particular herders, which account for one third of the country's population, and for whom livestock is the only source of income. Moreover, processing of agricultural products also creates critical employment opportunities for migrants in urban areas.

Expanding and modernizing agriculture is essential to bolster rural incomes and reduce poverty and income inequality in Mongolia. A productive primary sector will also play a catalytic role in diversifying the country's limited sources of growth. Economic diversification stands as Mongolia's biggest medium-term challenge, and is vital for employment generation and to make economic growth sustainable and more inclusive.

With an estimate 52 million head of livestock in a country with 3 million inhabitants, animal husbandry entails great growth potential in Mongolia. The country is well endowed and geographically well located to serve northeast Asian and central Asian markets, where demand for meat and milk is rapidly increasing. However, only about 1.5% of the meat produced is exported. Mongolia's agri-food export potential is hampered by poor standards of SPS measures. For instance, the livestock sector is vulnerable to infectious diseases, which could be better controlled. The incidence of infectious animal and food-borne diseases, such as brucellosis and equine infectious anemia, remains high. This results in Mongolia's trading partners frequently imposing temporary bans on imports of live animals and animal products from Mongolia due to an outbreak of contagious animal diseases.

Strengthening SPS measures in line with international standards while facilitating customs and border crossing procedures is, thus, essential to expand agriculture production to sustain inclusive growth and foster economic diversification in Mongolia.

Increased agrifood trade along CAREC corridors

(CAREC Transport and Trade Facilitation Strategy 2020)

Enhanced economic diversification to make economic growth sustainable and more inclusive

(Government Platform 20122016)

Improved SPS measures in compliance with the World Trade Organization

Laboratories and BCP inspection and quarantine facilities upgraded

SPS IMS established

SPS control and inspections aligned with international standards

Two civil works contractors to build 5 sanitary and phytosanitary laboratories are on board since July 2020. The construction of 5 laboratories are progressing slow with some delays. The progress rates of the construction works in 5 sites vary from 35% to 100%. Procurement of the laboratory equipment is completed and handed over to the project IAs. Animal and plant quarantine facilities includes disinfection facility. Disinfection facilities are under construction as part of the civil works of the proposed BCP upgrading. A civil works contractor to build animal inspection/quarantine facility at Altanbulag BCP has started the construction work in June 2021 but the progress rate is only 5%. The works completed by the contractor was non-compliance with the quality against the approved DED, therefor the EA has issued a notification to contract termination.

The training series on SPS measures organized from September to December 2021 covered a total of 49 topics and involved approximately 4000 laboratory specialists (in duplicate counting) from both implementing agencies GASI and GAVS. Laboratory manuals for testing and sampling techniques in line with the international standards have been developed.Application for accreditation will be submitted when laboratories are constructed.

According to the Budget Law 2022, the Export, Import, and Border Quarantine and Inspection Department was separated from the GASI and adjoined to the Mongolian Customs General Authority. Development of IMS is expected to be completed within the CAIS extension reflecting new circumstances and functions brought by the newly adjoined department.