The problem in context

An ill-prepared accession

Initiating the accession to the WTO was apparently among the first genuinely independent foreign political moves by Mongolia in the multilateral arena. But, after decades of COMECON (Council for Mutual Economic Assistance) membership, the pragmatic, realistic and money-driven mentality of the GATT was not quite familiar to the Mongolians, including their negotiators, at the launch of Mongolia's accession process. This lack of knowledge and understanding, coupled with a newly emerged private sector, led to a lack of political will to mobilize resources and stir a broad-based debate at national level so that the country as a whole could understand what the GATT/WTO accession could bring to the nation. As a result there was no serious economic analysis as to the consequences (be they positive or negative) of accession, except for the political objective of joining the club (i) before its two big neighbours (Russia and China); and (ii) with a view to showing the rest of the world that it was serious in its intention of embracing the market economy unreservedly.

However, the GATT/WTO was not exactly the right institution to join with a political objective of national image-building.

By taking such an ‘easy’ approach during the accession negotiations Mongolia did not reserve for itself sufficient transition period rights and exceptions, such as most developing member countries aim to secure. This approach also did not equip Mongolia to withstand the pressure mounted on it as to the acceptance of far-reaching concessions.