WTO, ICC, B20 call for action to narrow growing trade finance gap

In a joint statement, these three bodies warned that gaps between trade finance supply and demand could seriously impede the ability of trade to support post COVID-19 economic recovery. Pointing to the diminishing availability of trade finance, "they are urging private and public-sector actors to work together to address shortages", the World Trade Organization (WTO) said.

The WTO, the International Chamber of Commerce (ICC) and B20 Saudi Arabia on Thursday called for steps to narrow trade finance gap as it is a critical element in re-igniting worldwide growth in imports and exports. In a joint statement, these three bodies warned that gaps between trade finance supply and demand could seriously impede the ability of trade to support post COVID-19 economic recovery.

Pointing to the diminishing availability of trade finance, "they are urging private and public-sector actors to work together to address shortages", the World Trade Organization (WTO) said. Trade finance is a critical element in re-igniting worldwide growth in imports and exports, the statement reiterates.

"Since the need for trade finance is estimated to be between USD 2 trillion and USD 5 trillion, meeting this demand and addressing the shortfall will be challenging," it said. It added that there is serious concern that the growing gap between demand and supply will particularly affect micro, small and medium enterprises (MSMEs) and businesses in developing countries, with important implications for jobs and incomes.

They also urged the private and public sectors to work together to bring about a rapid transition to paperless trading, including e-documents in the processing of trade finance transactions. WTO Director-General Roberto Azevêdo said that failing to address the trade finance shortfall will seriously undermine ongoing efforts to give trade the boost it needs to help global economic recovery.

"I very much welcome the private sector's push to work jointly with the public sector in addressing the gaps," he said. India has been a member of WTO since 1995.