A joint staff working document published by the EU Council on 16 July 2026 assesses Mongolia's performance under the EU's Special Incentive Arrangement for Sustainable Development and Good Governance (GSP+) for the period 2023-2025, finding partial progress but persistent shortcomings in human rights, labour rights, environmental governance, and anti-corruption. The assessment warns that Mongolia risks losing its GSP+ trade preferences by 1 January 2028 if it remains classified as an upper-middle income country for the third consecutive year in July 2026, triggering graduation from the scheme.
The document, accompanying a joint report to the European Parliament and the Council on the Generalised Scheme of Preferences (GSP), notes that Mongolia has maintained ratification of all 27 GSP+ conventions and has not formulated reservations incompatible with their objectives. Positive legislative steps include laws on gender representation in Parliament, child protection, public demonstrations, and social insurance. However, serious concerns persist on violence against women and children, anti-discrimination, arbitrary arrest, torture by police, and the use of defamation and state secrets laws to curb criticism. On labour rights, the assessment highlights a 16.3% child labour rate among children aged 5-17, with children legally allowed to ride race horses from age 8, alongside ongoing issues with freedom of association and workplace discrimination. Performance on environment and climate conventions is described as poor, with uneven and overdue reporting. The document identifies priorities for future engagement: improving the justice system, fighting corruption, eliminating child labour, and meeting international reporting obligations.
Mongolian exporters face potential loss of duty-free access to the EU market, which would increase costs and reduce competitiveness, particularly in textiles and cashmere. EU importers may face higher prices or need to source from alternative GSP+ beneficiaries. Mongolian civil society and workers stand to benefit if the government acts on the recommendations, but continued inaction would perpetuate abuses. The EU institutions gain leverage to push for reforms, but graduation would remove that leverage. The assessment sets the stage for a Council decision on Mongolia's GSP+ status, with the European Parliament likely to weigh in during the review process.