Third Neighbor Trade Act may see approval this year
Trade Act to allow US investors to engage in wool and cashmere industry of Mongolia
2 өдөр, 19 цаг өмнө
Mongolia accounts for almost half of the world's raw cashmere production but supplies less than 20 percent of final products in the market. The American Chamber of Commerce in Mongolia (AmCham Mongolia) praised the action taken by the United States Congress to advance the Mongolia Third Neighbor Trade Act, a U.S trade initiative that will grant Mongolian cashmere duty-free access to the United States. Officials note that there is a high probability of the bill getting approved in 2019.
Adiya Oyungerel, the Executive Director for the AmCham Mongolia said, “The bill was submitted in July 2018. At the time, some U.S politicians were skeptical about ratifying a law for a single country and how it will comply with the United States. At the end of the 1990s, the U.S provided Mongolia with such advantages; however, these were not utilized very often. Chinese manufacturers established a factory in Mongolia to have the exploit this opportunity and exported its products to the U.S under discounted terms. There was a possibility to repeat this case, and it might take heed to the U.S.”
“The two U.S chambers are currently holding the first discussion on the bill. Last Wednesday, the act was submitted to the House of Representatives, and to the Senate on Thursday. Of course, it will take time to ratify the law. The time of approval is uncertain, but it is within prediction to be finalized within this year,” he added.
The act provides a clear definition of export conditions for cashmere. For example, the product must be produced in Mongolia and must contain over 51 percent cashmere. The U.S Congress has 500 heads of Senate. Therefore, we need to introduce the significance of the draft law to the members of the chamber.
The Third Neighbor Trade Act was written by members of the US-Mongolian caucus in Congress. Cashmere is one of Mongolia's few value-added and internationally competitive products. The draft law could potentially diversify the mining-dependent economy. With the bill, Mongolia will deliver its products to the U.S market and allow US investors to engage in the wool and cashmere industry.
Mongolia produced almost 50 percent of the world’s cashmere in 2017, with 9,400 tons of raw cashmere created, of which only 1,100 tons were processed domestically, while the remaining 8,300 tons were exported to China.
The elimination of U.S import tariffs will create a strong demand for Mongolian cashmere in the United States. To meet this increased demand, Mongolian cashmere will be processed in Mongolia rather than in China, creating thousands of new jobs for Mongolian workers.