WTO moves to improve trade financing for developing world
The World Trade Organization said Wednesday that it is looking at improving trade financing conditions in developing countries, which is beginning to dry up due to the global economic crisis.
Trade finance is the "lifeblood" without which global trade would stall. It comes in the form of credit issued and guaranteed by banks to importers and exporters, underpinning confidence through the whole system.
But it has began to dry up as demand grows in developing countries while supply was falling amid the EU debt crisis.
On Wednesday, WTO chief Pascal Lamy met with trade financing experts to discuss the issue.
With fewer banks offering such financing, the cost of credit was also rising.
In a bid to get trade financing flowing, the WTO will ask the November G20 summit to encourage development banks as well as the World Bank to conclude co-financing deals with banks in the private sector.
Such agreements could divide the risk carried in such loans between the public and private banks.
© 2011 AFP