On the issues of sustaining bilateral trade between Mongolia and the Republic of Korea (FTA)

Abstract

ince its accession to the World Trade Organization (WTO) in January 1997, Mongolia has continued to reshape its economic, business, and legal environments in accordance with its WTO commitments, as well as expand economic ties with its major trading partners, such as the Republic of Korea (ROK). Bilateral trade between Korea and Mongolia increased by 146 times since the two countries established diplomatic relations, from USD 2.7 million in 1990 to USD 395 million in 2011. However, Mongolia's exports are heavily reliant on a few agricultural and mining products and is experiencing a crisis as a result of insufficient exports. At the strategic level, Mongolia has attempted to negotiate a Free Trade Agreement (FTA) with its key trading partners in order to sustain long-term economic growth. The first purpose of this research is to examine Mongolia's prerequisites for negotiating an FTA with ROK and its other key trading partners using Gravity Model and Trade Indicators. A major goal of the study is to come up with a possible strategy for Mongolia to encourage the bilateral trade through FTA with Korea.