3 November 2008

WTO meets on trade finance

This article is excerpted from the 3 November 2008 edition of “The Journal of Commerce”.

The World Trade Organization will bring together senior executives of leading global banks on Nov. 12 to discuss new ways to finance global trade of goods and services, which has slowed during the financial crisis.

In addition to WTO chief Pascal Lamy… other leading attendees will include Robert Zoellick, president of the World Bank; Dominique Strauss-Kahn, managing director of the International Monetary Fund, and senior representatives of Citigroup, Commerzbank, JPMorgan Chase, and other major banks,….

Over 90 percent of all trade transactions involve some form of credit, insurance or guarantees, which have become increasingly difficult for importers and exporters to secure during the current crisis. The WTO announced today that demand for trade financing is exceeding supply in some places around the world because of a capital liquidity shortage and because of increased need for other forms of bank credits. This gap between demand and supply could affect the reliability of goods and services moving around the world, the WTO said.

In a letter to invitees, Lamy said that the meeting of more than a dozen leaders would review the performance of the international trade financing market and search for new ways to enable developing countries to acquire funds at affordable rates….