The European Commission has published a joint staff working document on 16 July 2026 assessing Mongolia's compliance with the EU's Special Incentive Arrangement for Sustainable Development and Good Governance (GSP+), finding partial progress but persistent shortcomings in human rights, labour standards, environmental reporting, and governance. The assessment warns that Mongolia could graduate from GSP+ by 1 January 2028 if it remains an upper-middle income country for a third consecutive year, as determined in July 2026. The document accompanies the Commission's broader Joint Report to the European Parliament and the Council on the Generalised Scheme of Preferences (GSP) covering 2023-2025.
Mongolia has ratified all 27 GSP+ conventions and used the scheme for 15% of its total EU exports in 2024, with a utilisation rate of 78%, down from 86.2% in 2022. EU imports from Mongolia fell from EUR 141.8 million in 2022 to EUR 128 million in 2024, with GSP+ tariff exemptions totalling EUR 1.8 million in 2024. The assessment notes positive steps, including laws on gender representation in Parliament, child protection, public demonstrations, and social insurance, as well as the Constitutional Court striking down the criminalisation of 'dissemination of false information'.
violence against women and children, the absence of a comprehensive anti-discrimination law, torture in detention, child labour affecting 16.3% of children aged 5-17, forced labour at 1.8 per 1,000 persons, a persistent gender pay gap, and restrictions on freedom of association. Environment and climate reporting is described as uneven and often overdue, while the fight against corruption needs strengthening. The assessment concludes that Mongolia must urgently address child labour, anti-discrimination, the definition of torture, freedom of association, and environment reporting to maintain GSP+ eligibility under revised rules expected in 2027.
The document is a joint staff working document (SWD(2026)190) from the Commission's trade department. It serves as an input for the European Parliament and Council in their oversight of the GSP scheme. The potential graduation would remove Mongolia's preferential access to the EU market, affecting Mongolian exporters—particularly in textiles and cashmere—who benefit from duty-free access. EU importers relying on Mongolian goods may face higher costs. The assessment also signals to other GSP+ beneficiaries the EU's increasing scrutiny of compliance with international conventions, especially on labour rights and environmental reporting. The European Parliament and Council are expected to discuss the findings in the coming months as part of the broader GSP review.