Foreign Trade of Mongolia under Global Shocks

The paper examines the current problems of Mongolia's foreign trade. It reveals that Mongolia depends on trade with two neighboring countries and has therefore suffered from border restrictions from China and Western states sanctions against Russia. It shows that the closure of the border with China in 2020 led to a sharp drop in Mongolian exports. In addition, Mongolia's dependence on mineral exports to China was exacerbated by its dependence on oil product imports from Russia. The sharp rise in oil product prices and supply problems in 2022 had a negative impact on the economic situation in Mongolia. China's completion of the COVID-Zero policy allowed Mongolia to exceed pre-pandemic mineral export volumes in 2023. The construction of new railway crossings will increase export volumes to China and other countries. Mongolia's implementation of measures to develop its own oil refining industry will lead to its elimination of dependence on Russian oil products in the coming years. In connection with the latter, a precipitous reduction in mutual trade up to a complete cessation should be expected. Therefore, the development of a long-term policy of bilateral economic cooperation is extremely relevant. As a key initiative that will ensure at least minimal volumes of Russian-Mongolian trade and maintain good-neighborly relations, the conclusion of a free trade agreement is proposed.