Why Mongolia — And Cashmere — Matters

Mongolia only rarely features in international news headlines:
*. During the 13th century, Genghis Khan launched what became the world’s largest empire.
*. During the early 20th century, Mongolia regained its independence, gaining a reputation as possibly the most remote and inaccessible place on earth.
*. Also during the late 20th century, Mongolia emerged from the Soviet shadow to embark on a peaceful transition from dictatorship to democracy.
Now Mongolia is once again in the news, mentioned on several occasions as a potential site for a historic summit between President Donald Trump and President Kim Jong-un of North Korea.
Whether or not that meeting takes place in Ulaanbaatar or along the DMZ between North Korea and South Korea, the United Sates now has an opportunity to further cement its relationship with Mongolia while also strengthening Mongolia’s independence.
Landlocked and surrounded by China and Russia, Mongolia faces special geopolitical challenges. Part of its response is to actively seek strong partnerships with its “third neighbors,” a formulation that includes the United States. While security concerns figure prominently in Mongolia’s interactions with the rest of the world, it also assigns high priority to economic issues.
Tariff policy has in recent months emerged as a matter of particular concern, especially with respect to its garment industry. After China, Mongolia ranks as the world’s the leading source of cashmere, a premium animal fiber used to produce high end scarves, sweaters and other luxury fashion apparel.
Historically, cashmere is also a vital part of Mongolia’s unique nomadic culture, providing employment and income for herder families living in the Gobi Desert as well as across Mongolia’s vast grasslands where winter temperatures routinely drop to 40 below zero.
For the United States, trade with Mongolia hardly figures as even a decimal point. Yet for Mongolia, an expansion in cashmere exports has big implications.
While Mongolia is rich in copper, coal, gold, rare earths and other minerals, a vibrant cashmere industry provides an important path toward diversifying its economy while also strengthening its economic — and political — independence from the overwhelming dominance of China and Russia.
Over the years, a number of Congressional leaders have recognized the direct link between trade and national interest, using it to support small allies in ways that can be much more effective than traditional aid programs. In such cases, the phrase “trade not aid” is much more than an empty slogan.
The late Phil Crane, an Illinois Republican who helped found the Heritage Foundation, recognized the benefits of using trade policy to affirm Mongolia’s democratic, market-oriented transition. In particular, he pressed for granting Mongolia “Most Favored National” status, helping to set the stage for a period in which trade between the US and Mongolia grew from less than $10 million in 1992 to more than $700 million by 2012.
As U.S. ambassador to Mongolia, I saw at firsthand what Mongolia’s importation of Boeing aircraft and Caterpillar heavy equipment meant for both countries.
Closer trade ties helped strengthen cooperation in other ways. Even now, American and Mongolian soldiers continue to serve together in Afghanistan. Mongolia has also maintained strong relations with both North and South Korea. In addition, it offers a compelling model of how a previously isolated dictatorship can rejoin the international community and thrive.
The Trump administration and Congress are now assessing possible next steps on the economic front, one in which trade preferences for Mongolian textiles, especially cashmere, could further strengthen the U.S.-Mongolia partnership.
Larry Kudlow’s visit to China offers one opportunity to think more broadly about the region. Targeted trade arrangements for Mongolian textiles including cashmere would send a strong message that Mongolia matters.
Even before the possibility of a Trump-Kim summit emerged, Asia Subcommittee Chairman Ted Yoho from Florida spoke out on emerging trends in East Asia in ways reminiscent of Congressman Crane’s prescient views in the aftermath of the break-up of the Soviet Union. He has also consistently emphasized the benefits of trade for countries like Mongolia, dwarfing the economic impact of traditional aid allocations.
Preferential access to U.S. markets will help diversify the Mongolian economy, moving it beyond the boom-or-bust natural resource based development model now in place.
A successful Mongolia also has positive benefits for the United States in a part of the world that matters more than ever. Here again, small economic steps can have a big impact. For Mongolia, that means looking for ways to expand trade in the one globally desirable product in which it has a clear comparative advantage and which poses no threat to any American industry — high-quality cashmere.
Jonathan Addleton served as U.S. ambassador to Mongolia; USAID mission director in India, Pakistan, Cambodia, Mongolia and Central Asia; and USAID representative to the European Union. He is currently an adjunct in the department of international and global studies at Mercer University and executive director of the American Center for Mongolian Studies.


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