In the wake of the international socialist economic system's collapse and the disintegration of the former Soviet Union, the Mongols began to pursue an independent and nonaligned foreign policy. The Prime Minister called for coexistence with all nations, and Mongolia follows a general policy of expanding relations with as many countries as possible.
Due to Mongolia's landlocked position between the New Independent States (NIS) of the former Soviet Union and People's Republic of China, it was essential to continue and improve relations with these countries. At the same time, Mongolia is reaching out to advance its regional and global relations.
As part of its aim to establish a more balanced nonaligned foreign policy, Mongolia is seeking active supporters and friends beyond its neighbors and looking to take a more active role in the United Nations and other international organizations. While it is downgrading relations with most of its former east European allies, it is pursuing a more active role in Asian and northeast Asian affairs. Mongolia is seeking to join APEC and became a full participant in the ASEAN Regional Forum (ARF) in July 1998. Mongolia became a full member of the Pacific Economic Cooperation Council in April 2000.
Mongolian relations with the PRC began to improve in the mid-1980s when consular agreements were reached and crossborder trade contacts expanded. In 1989, the People's Republic of China and Mongolia exchanged visits of foreign ministers. In May 1990, a Mongolian head of state visited China for the first time in 28 years. The cornerstone of the Mongolian-Chinese relationship is a 1994 Treaty of Friendship and Cooperation, which codifies mutual respect for the independence and territorial integrity of both sides. The two foreign ministers exchanged visits in 1997, as did the leaders of the two countries' parliaments. President Jiang Zemin visited Mongolia in July 1999.
Mongolia is expanding relations with Japan and South Korea. Its Prime Minister visited Japan in March 1990 and Prime Minister Obuchi reciprocated with a visit to Mongolia in July 1999. Japan has provided more than $100 million in grants and loans since 1991 and coordinated international assistance to Mongolia. Diplomatic relations were established with South Korea in 1991, and during the Mongolian President's visit, seven agreements and treaties were signed, providing the legal basis for further expanding bilateral relations. Japan is Mongolia's largest bilateral aid donor. In 2001 President Bagabandi made state visits to India and Nepal.
After the disintegration of the former Soviet Union, Mongolia developed relations with the new independent states. Links with Russia and other republics were essential to contribute to stabilization of the Mongolian economy. The primary difficulties in developing fruitful coordination occurred because the NIS were experiencing the same political and economic restructuring as Mongolia. Despite these difficulties, Mongolia and Russia successfully negotiated both a 1991 Joint Declaration of Cooperation and a bilateral trade agreement. This was followed by a 1993 Treaty of Friendship and Cooperation establishing a new basis of equality in the relationship. Mongolian President Bagabandi visited Moscow in 1999, and Russian President Vladimir Putin visited Mongolia in 2000 in order to sign the 25-point Ulaanbaatar Declaration, reaffirming Mongol-Russian friendship and cooperation on numerous economic and political issues.
Mongolia seeks closer relations with countries in Europe and hopes to receive most-favored-nation status from the European Union (EU). During 1991, Mongolia signed investment promotion and protection agreements with Germany and France and an economic cooperation agreement with the United Kingdom. Germany continued former East German cooperative programs and also provided loans and aid. The Prime Minister has traveled to Germany, France, Belgium, and EU headquarters in Brussels seeking economic cooperation. President Bagabandi visited several European capitals in 1999-2000.
See also : Mongolia