EU-Mongolia relations have remained on a steady upward trajectory since 1990, when Mongolia successfully transitioned from seven decades of single party communist rule to become a multi-party parliamentary democracy.

After establishing formal diplomatic relations with the EU in 1990, Mongolia was quickly granted access to the EU’s Generalised Scheme of Preferences (GSP) in 1991, and later upgraded to full GSP+ status in 2006.

Although Mongolia was awarded upper-middle income status by the World Bank on July 1, 2024, the EU has made clear that it will continue to retain access to the GSP+ agreement until at least 2027. Typically, GSP status is only granted to countries whose national income ranks below the upper-middle income level, offering a concrete demonstration of the EU’s ongoing commitment to the strengthening of EU-Mongolia economic relations.

A diverse portfolio of Cooperation

EU involvement in Mongolia in 2024, however, extends far beyond pure economic interests, encompassing all aspects of developmental assistance, from effective justice reform to the promotion of civil society and green and digital transition.

Targeted EU investment in the areas of trade, education, energy and technology continues to support the diversification of Mongolia’s economy and human potential. Over time, these measures will help strengthen Mongolia’s competitiveness in what has become an increasingly challenging global economic environment.

The EU’s efforts to deliver crucial investment in renewable energy production, primarily through a series of projects either planned or already underway as part of the Global Gateway initiative, are helping to further reinforce the Mongolian government’s ambitious green development goals, outlined under the Vision 2050 development plan.

Harsh Climate Realities

Since the turn of the millennium, Mongolia has become increasingly adversely affected by climate change. The recurrence of increasingly severe winter conditions, known locally as “Dzud”, have wreaked havoc throughout Mongolia’s agricultural sector, upon which roughly one third of its population relies for their livelihood.

As of May 2024, an estimated 7.44 million livestock have been lost this year alone, corresponding to 11.5% of Mongolia’s total livestock population. Increased desertification has further reduced the amount of arable land available to Mongolia’s herders and crop cultivators, while prolonged droughts have reduced water availability, particularly in Mongolia’s southern provinces.

Given the limited national resources that are ultimately available to Mongolia as it seeks to bolster its defences against the ravages of climate change, the emergence of a potential critical raw materials partnership agreement with the EU offers further hope for mutual advancement of critical green development goals.

For this to be case, it is essential that all resulting operations are conducted in a manner that is environmentally sound, and which bolsters sustainable energy production and climate resilience in Mongolia on both an immediate and long-term basis.

Rising Regional Tensions

EU-Mongolia relations are inherently complicated by Mongolia’s close geographic, economic and political proximity to both Russia and China. Mongolia remains heavily dependent on Russian energy imports, while China is Mongolia’s largest trade partner by a significant distance, accounting for an estimated 84% of Mongolian exports in 2023.

EU-Russia relations have deteriorated drastically in recent years in the aftermath of Russia’s war of aggression in Ukraine, while the EU has criticised China’s authoritarian governance structure, questionable human rights record and heavy state subsidisation of key industries, which the EU argue has distorted market competition to an unfair degree.

Mongolia’s already challenging geopolitical situation is set to be further complicated by the rising uncertainty around what US foreign policy will look like under the incoming Trump administration.

During Trump’s first term in office, in 2019, the US and Mongolia entered a strategic partnership agreement, with the objective of increasing strategic, economic and security cooperation while continuing to promote democratic principles, institutional integrity and respect for human rights.

Although economic cooperation between the United States and Mongolia undoubtedly increased over this period, U.S. aid to Mongolia also fell dramatically.

Although the second Trump administration will not officially take office until January 2025, it is reasonable to assume at this juncture that climate change and environmental protection will not be afforded the same level of investment priority, both within and without the United States.

Trump’s antagonistic approach towards China and the prospect of another imminent trade war will serve as another potential flashpoint in future US-Mongolia relations, making the EU’s continued involvement in Mongolia’s green and digital transition and long-term development all the more critical.

The future of EU-Mongolia relations

The EU remains a vital strategic, economic, and political partner for Mongolia, uniquely positioned to provide a counterpoint to the influence of its neighbours, China and Russia. While Mongolia’s reliance on these powers for trade and energy is significant, the EU offers an alternative model of partnership grounded in shared values of freedom, democracy, equality, rule of law, and respect for human rights. By strengthening its diplomatic presence and deepening collaboration in areas such as green development, economic diversification, and technological innovation, the EU can help Mongolia achieve its ambitious Vision 2050 goals. Through sustained investment and engagement, the EU has the opportunity to solidify its role as a trusted partner, supporting Mongolia in preserving its unique position as an “Oasis of Democracy” in a geopolitically complex region.