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EU-Mongolia Relations: Toward a Strategic Partnership

Raúl Villegas

Date: 17/06/2024

Building on its Partnership and Cooperation Agreement, the EU is poised to strengthen ties with Mongolia, a country eager to broaden its international partnerships and reduce overreliance on its powerful neighbours. This Policy Brief examines Mongolia’s development and the current state of EU-Mongolia relations, proposing actionable steps to intensify bilateral cooperation. By promoting Mongolia’s economic diversification and global connectivity efforts, the EU can enhance its economic security and support Mongolia as a strategic partner.

Furthermore, the Brief states that six recommendations are needed in order for the EU to offer a strong ‘third neighbour’ alternative and build a strategic partnership with Mongolia:

1. Pursue mutually reinforcing economic diversification: To enhance its economic security, the EU needs to secure alternative import supply chains of critical raw materials; likewise, Mongolia needs to diversify its range of exported goods and export markets. The Union should thus upgrade its Global Gateway ambitions to expand Mongolia’s export options while diversifying Mongolia’s energy mix.

2. Establish a dialogue on economic coercion:  Mongolia will remain heavily reliant on Chinese infrastructural investment and export markets for the foreseeable future.  The EU should involve Ulaanbaatar in ongoing knowledge exchanges on economic security with Indo-Pacific partners such as Japan and South Korea

3. Advocate long-term economic thinking: To decrease Mongolia’s dependency on its neighbours and help position it as a significant commercial partner, the EU should promote an equilibrium between short-term, resource-based revenue generation, and the building of long-term competitive economic sectors and institutions. Equal attention should be devoted to country-wide development and environmental sustainability.

4. Highlight human capital: Mongolia’s mineral boons have often overshadowed its human capital. To single out its engagement with Mongolia and ensure the country’s future as a stable, democratic, and strategic partner, the EU should invest more in its public sector, institutional reform, and people-to-people exchanges.

5. Avoid geographic silos: EU external action has typically compartmentalised Central Asia, Mongolia, and the rest of East Asia. But, as suggested by the affinity between the multi-vector policy of Central Asian countries and Mongolia’s Third Neighbour policy, and the potential interplay with Middle Corridor infrastructure, cooperation with Mongolia should be understood within its larger regional context.

6. Don’t pin a future strategic partnership on unrealistic expectations: The EU should pursue a pragmatic approach to Mongolia. This approach should not be transactional and grow fatigued in the absence of immediate progress. It should remain cognisant of the country’s unique geographic and geopolitical constraints, and its logical choice for neutrality — all while helping reduce its chronic dependencies and boosting its capacity to act autonomously.

Read the full paper here.
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