Mongolia supplies around 40 percent of the world raw cashmere demand and it is deemed that the domestic production of final cashmere products for exports would increase the economic values by five times and the export revenue alone to reach USD 1.7 billion. Also, the proposed duty-free treatment by the USA to Mongolia cashmere products and 25 percent duty of China on knitted products are viewed as great opportunities to encourage exports.
Relations between Mongolia and the United States of America reached a new level, advancing non-stop over a period of 32 years since the establishment of diplomatic relations between the two countries. Specifically, the joint declaration put out during Mongolian President Kh.Battulga’s official visit to the United States from July 29 to August 3, declares the bilateral relationship to be a strategic partnership.
Mongolia’s relations with the U.S. based on the country’s third neighbour policy is of great importance. The relationship has been developing in line with common strategic interests, shared democratic values, good governance, principles of sovereignty, and respect for human rights.
Mongolians will export their wool and cashmere products to the United States duty free and this will guarantee income for 800 thousand members of 200 thousand herder families. Presently, Mongolia produces nine thousand tons of cashmere and 23 to 25 thousand tons of wool each year and domestically processes slightly over 10 percent of the total cashmere. The passing of the bill will open up an opportunity for complete processing and export of finished goods. As a result of that, 40 to 50 thousand jobs will be newly created and unemployment and poverty will drop. It bears great social and cultural significance for the country to retain its nomadic civilization while making its wool and cashmere products a world brand.