Sec. 2. Findings

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Congress finds the following: In 1992, Mongolia adopted a constitution establishing a parliamentary democracy, becoming the only country in Asia to transition from communism to democracy. Mongolia shares land borders with only the Russian Federation and the People’s Republic of China. With a large land area and a population of only 3,000,000, Mongolia is the world’s most sparsely populated country, and Mongolia’s sovereignty is thought to be at risk from the overwhelming influence of its much larger and more populous neighbors.

Mongolia has shown its commitment to a third neighbor relationship with the United States by sending troops to support United States combat operations in Iraq and Afghanistan, and has a strong record of troop contributions to international peacekeeping missions. Mongolia’s success as a democracy, strategic location, sovereignty, territorial integrity, and ability to pursue an independent foreign policy are highly relevant to the national security of the United States. Mongolia describes the United States as its most important third neighbor , but United States-Mongolia trade is substantially lower than many other bilateral trading relationships, and trade has declined in recent years.

Total trade between the countries in 2012 measured $707,000,000, but in 2017 the United States exported only $82,200,000 in goods to Mongolia and imported only $9,400,000 in goods from Mongolia. After mining, agriculture is the second most important sector contributing to the Mongolian economy. The livestock sector accounts for 87 percent of agricultural production in Mongolia and employs around one-third of the working population. Since the 1940s, the annual mean air temperature in Mongolia has risen at three times the global rate.

Average precipitation is declining and extreme weather disasters are more frequent, posing acute challenges for livestock herding in the country. In 2017, an estimated 700,000 of the country’s livestock population were killed due to the post-drought extreme winter phenomenon known as dzud . This phenomenon is unique to Mongolia and has increased in frequency and severity in recent years, causing a rise in livestock mortality and diminishing livelihoods for herders which has led to widespread rural poverty and a contraction in the national economy.

Mongolia would greatly benefit from preferential treatment for United States imports of certain Mongolian products to help address some of the economic impacts of the dzuds. The cashmere trade is particularly important to Mongolia’s economy, but while Mongolia produces over one-third of the world’s raw cashmere, it produces few finished cashmere products. Most Mongolian raw cashmere is exported to China, and the United States buys nearly all of its cashmere products from China.

Preferential treatment for United States imports of certain Mongolian products, including cashmere products, would benefit the United States by facilitating increased trade with Mongolia. The development of Mongolia’s garment industry would also promote women’s employment and empowerment. Women have historically participated in Mongolia’s garment industry at high rates, and the garment industry has historically provided safe and stable employment for women in Mongolia. In developing and expanding Mongolia’s cashmere industry, it is critical for Mongolia to take steps to ensure the protection of its grasslands and prevent overgrazing of cashmere goats.

Preferential treatment for United States imports of such Mongolian products would benefit Mongolia at this critical time.