DAS NORRIS DISCUSSES IMF, MCC, TRANSPARENCY

C O N F I D E N T I A L ULAANBAATAR 000094


STATE FOR EAP/CM; PLEASE PASS TO COMMERCE, AGRICULTURE

E.O. 12958: DECL: 04/08/2019
TAGS: PGOV PREL EMIN MARR MG
SUBJECT: DAS NORRIS DISCUSSES IMF, MCC, TRANSPARENCY
AGREEMENTS, HIGH-LEVEL VISITS, AND AFGHANISTAN WITH FM
BATBOLD

Classified By: PolOff Andrew Covington for Reasons 1.4 B and D


1. (C) Summary. On April 2, the DAS for China and Mongolia,
John Norris, met in Ulaanbaatar with Mongolian Foreign
Minister Batbold on the eve of our annual Consultation on
Bilateral, Regional, and Global Issues (CBRGI). Batbold
expressed satisfaction with the recent IMF Stand-By Agreement
(SBA) with Mongolia and said the GOM is still seeking USG
budgetary assistance in connection with the SBA. The FM said
a transparency agreement (TA) with the United States was the
way forward for our trade relations and that the GOM has a
serious commitment to passing the Oyu Tolgoi investment
agreement (IA) once Parliament takes up the issue again on
April 6. Batbold was concerned with the lack of progress on
the audit of Ulaanbaatar Railways (UBTZ),which is a
condition precedent for the USD 188 million rail project of
Mongolia's Millennium Challenge Compact. Batbold said
Mongolia intends to contribute once again to military
operations in Afghanistan and that the Mongolian National
Security Council was gathering the information required to
determine the nature of the reengagement. The FM thanked DAS
Norris for confirming a June 9 meeting with the Secretary in
Washington and personally delivered a letter inviting the
Secretary to return to Mongolia. End Summary.

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The IMF and Financial Assistance
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2. (C) Batbold expressed satisfaction with the recently
negotiated USD 229 million IMF Stand-By Agreement (SBA). He
said Mongolia was still seeking financial assistance from the
U.S. to supplement the direct budget support provided by
other donors in connection with the SBA. DAS Norris
reiterated President Obama's commitment to restoring the
health of the global economy. He added that we welcomed the
IMF's Standby Agreement, and that the U.S. is looking at what
it can do to assist. Batbold asked that the U.S. extend the
number of Mongolian products covered by the General System of
Preferences-related handicraft agreement to include cashmere,
camel, and similar products.

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Transparency Agreement
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3. (C) Batbold said Mongolia was happy to take the
transparency agreement (TA) route with the United States as
the way forward toward an eventual Free Trade Agreement
(FTA),and that Mongolia was ready to talk about issues
related to a TA. The DAS responded that we welcome
Mongolia's desire to move forward on a TA and that the USTR
values the trade relationship.

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Mining Investment Agreement
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4. (C) The FM noted that, because his ministry has assumed
trade and investment responsibilities, he wants Parliament to
consider the Oyu Tolgoi copper mining investment agreement
very carefully, and that success with this major agreement
will help with the passage of future such agreements.
Batbold said that at this stage, with Parliament returning to
the Oyu Tolgoi debate when it reconvenes on April 6, only
fine tuning of the terms would be necessary.

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Millennium Challenge Compact
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5. (C) Batbold noted recent MCC-related successes, including
passage of required Technical, Vocational and Educational
Training legislation and recent steps toward securing a
building for the land registry project. He said the GOM must
pay attention to the lack of progress on the required audit
of UBTZ, and that he thinks it ought to be solved
immediately. Batbold said Prime Minister Bayar has a clear
idea of the importance of the issue and is committed to
solving it. DAS Norris said MCC was one of our great
successes in recent years. He stated that we must follow
through with MCC, that the rail audit problem must be solved
expeditiously, and that he was glad to hear the FM's
perspective.

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Afghanistan
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6. (C) DAS Norris expressed our admiration for the role
Mongolia's military has played in Iraq and Afghanistan, and
that we look forward to future cooperation. He reviewed the
points of the recent letter from Secretary Gates to Defense
Minister Bold inviting a Mongolian deployment to Afghanistan.
Batbold said Mongolia is pleased to contribute as a
democratic country. He said the GOM appreciated Secretary
Gates' letter, would discuss the options seriously, and
inform the USG of its decision. Regarding the possible
location of a site security team, Batbold said the GOM would
gather and provide the required information to the Mongolian
National Security Council, comprising the President, PM and
Speaker of Parliament.

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Meeting with Secretary Clinton
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7. (C) Batbold thanked the DAS for confirming his meeting on
June 9 with Secretary Clinton in Washington and expressed an
interest in seeing USTR officials and other relevant
authorities on trade and investment issues. Batbold
reciprocated with an invitation for Secretary Clinton to
return to Mongolia at her convenience; he provided a copy of
the physical invitation to DAS Norris. Post is forwarding
the invitation to Department.

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Community of Democracies
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8. (C) Batbold said Mongolia would appreciate our support in
their nascent campaign to chair the Community of Democracies
(CD). He said State Secretary Tsogtbaatar will attend the CD
meetings in Lisbon in July and would express this position
then.

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Participants
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9. (C) Meeting participants included:
-- USG: DAS Norris, Ambassador Minton, EAP/CM Mongolia Desk
Officer Goodman, Embassy PolOff Covington
-- GOM: FM Batbold, MFA Director for the Americas, Middle
East and Africa (AMEA) Odonjil, AMEA Deputy Mounkhou, and
U.S. Desk Officer Anand.


MINTON