WT/WGTDF/W/101  
 
7 October 2021  
(21-7594) Page: 1/4 
Working Group on Trade, Debt and Finance  Original:  English   
 
COMMUNICATION FROM JAMAICA, ON BEHALF OF THE AFRICAN, CARIBBEAN  AND 
PACIFIC GROUP OF STATES (ACP)  
This following communication and submission, dated 6 October 2011, has been received by the 
Secretariat for circulation to and discussion by Members . 
 
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1  INTRODUCTION  
1.1.  The African, Caribbean and Pacific Group of States ( ACP) recalls the mandate of the Working 
Group on Trade , Debt and Finance as informed by our Ministers and that is, for WTO to study how 
trade can bes t contribute to solving the problems of debt and finance. A series of issues continue to 
haunt the development and progress of many developing Members especially in the case of the 
ACP economies, such as external debt problems, existential threat of climate change and natural 
disasters, smallness in economic size, lack of economies of scale, limited productive market and 
more so lack of access to financing mechanism both to service debt as well as that of trade finance. 
For these very reasons, the Wor king Group has been tasked to look at how trade -related measures 
can contribute to finding a durable solution to help alleviate these problems.  
2  BACKGROUND  
2.1.  More recently, the COVID -19 pandemic has exacerbated ACP economies particularly in the 
areas of inter national trade and trade finance which further aggravated the situation of our Members. 
Trade finance is estimated to have contributed between 80% - 90% of all world trade1 and serves 
as the lifeblood of the day -to-day international trade in goods, a crit ical element for cross -border 
trade and in many cases the movement of goods across borders cannot proceed without it. Both 
global and local financial systems have been impacted including those of the trade finance as well 
as debt servicing mechanisms.  
2.2.  As in trade finance, recent studies2 have shown that significant gaps have already persisted 
before the pandemic as global demand for trade finance outpaced supply. Research has also shown 
that the trade finance gap will expand potentially as the pandemic co ntinues and certainly once 
COVID -19 abates, businesses will need additional trade finance to emerge from the lockdown. T he 
Asian Development Bank estimated the global trade finance gap to be in the order of USD  1.5 trillion, 
with developing countries and micro, small and medium -sized enterprises ( MSMEs ) being the most 
affected by the shortfall.  
2.3.  On the other hand, the Organisation for Economic Co -operation and Development (OECD ) 
reported3 in March this year that governments in OECD countries turn to their Export Credit Agencies 
(ECAs) to fill any financing gaps left by the private market and to mitigate the impact of the crisis 
both in the short and medium -term. It is reported however that short -term trade finance which is 
mostly for  small and medium -sized enterprises  (SMEs ) is facing access problems and higher rates 
 
1 WTO (2009), trade finance https://www.wto.org/english/thewto_e/coher_e/tr_finance_e.htm . 
2https://www.ifc.org/wps/wcm/connect/publications_ext_content/ifc_external_publication_site/publicat i
ons_listing_page/trade -and-covid-19-note-2. 
3 https://www.oecd.org/coronavirus/policy -responses/trade -finance -in-the-covid-era-current -and-
future -challenges -79daca94/ . WT/WGT DF/W/101  
 
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  of rejections. Export Credit Agencies therefore has a critical role in the short -term trade finance by 
acting on liquidity and increasing capacity.  
2.4.  In order to mitigate the short -term liqu idity problems faced by exporters and their supply 
chains, ECA 's have been boosting their working capital support programme which includes insurance 
or guarantees to financial institutions on behalf of the exporters, provide exporters with liquidity to 
finance costs incurred by the exporter to produce goods for export . According to the OECD, 64% of 
ECAs indicated that they took measures aimed at increasing working capital support. These 
measures included increasing the capacity or expanding the coverage of existing working capital 
programmes and creating new working ca pital facilities.  
2.5.  In addition, ECAs filled in the gaps left by the private market in short term trade finance and 
increase its availability such as export trade insurance and guarantees, many ECAs have further 
increased their capacity of existing programme s and created new facilities and even extended their 
limits of cover to include new risks. One example of this is the European Commission which decided 
to make short term export credit insurance more widely available by temporarily removing all 
countries f rom the list of "marketable risk " countries which are normally ineligible for public support. 
Unfortunately for the European Commission this support only ends by the end of 2021, what we 
need rather is a similar model that is standard and sustainable to ca ter for countries in need for now 
and into the C OVID -19 recovery phase.  
2.6.  It is also unfortunate that such kind of facilities are mostly accessible only to the 
OECD  members or developed members thus creating bigger gaps between developing and 
vulnerable memb ers as in the ACP Group amidst the economic impact posed by the C OVID -19 
pandemic.  
2.7.  Learning from the 2008 -2009 economic crisis, in an attempt to avoid the potential serious 
impacts of a shrinkage of trade finance on the real economy4 the G20 agreed to ens ure the 
availability of support of trade finance at the tune of USD  250 billion in 2009. Now with the significant 
effect of the C OVID -19, leading governments, multilateral groupings and public institutions are 
reflecting on possible responses. It is theref ore imperative that a similar approach as in the economic 
crisis could be envisaged by our Ministers this year in MC12 to help drive and sustain trade finance 
and reduce the already expanding gaps globally. The International Chamber of Commerce has 
conserv atively estimated that financing capacity ranging from a lower end estimate of US D 2 trillion 
to an upper end estimate of USD  5 trillion will be needed to meet this demand.5 Timely intervention 
in this regard is vital.  
2.8.  Irrespective of constraints related to the supply of trade finance, it is also noted that pandemic 
has produced a shock on demand as well as production, thereby reducing exports and leading to 
disruptions in the supply chain. In such a circumstance ensuring that a sufficient amount of 
short-term financing is available through export support programmes may not be sufficient to 
maintain trade flows because the availability of finance does not create a demand, however, it 
empowers and provides incentives and opportunities to SMEs who need such s upport as and when 
the demand arises.  
2.9.  Turning now to the proposal for discussion today, the ACP Group would like to welcome and 
thank C ôte d'Ivoire for its continued hard work  as we have noted in its various submissions to this 
Working Group. The ACP Group supports the submission by Côte d'Ivoire and would like to propose 
its own views as well.  
2.10.   In the submission by C ôte d'Ivoire the ACP Group noted that the key challenges in trade 
finance include the inability to access loans, drop in demand for goods, ex cessive collateral 
requirements to support loans because of information asymmetries, rejection in the volume of letters 
of credit, rejection of trade finance to SMEs (affects smaller enterprises) and increase regulatory 
requirements related to anti -money l aundering legislation.  
2.11.   The proposed solutions highlighted in the proposal, which the ACP Group support s, include 
collaboration amongst Members such as the sharing of good practices, continued WTO Secretariat 
 
4 IMF (2003) trade finance in financial crises: assessment of key issues  
https://www.imf.org/external/np/pdr/cr/2003/eng/120903.htm . 
5 https://www.wto.org/english/news_e/news20 _e/trfin_08jul20_e.pdf . WT/WGT DF/W/101  
 
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  support, collaboration amongst international organisations and further discussions on the Legal 
Entity Identifier system for companies.  
2.12.   The ACP Group views the ideas as constructive , and could be used as a basis to move forward 
for a declaration to be tab led in the General Council for the MC12.  
2.13.   The ACP Group is also of the view that Members should be considerate of requests that seek 
to pursue areas that would address trade deficiencies such as in the area of trade finance and debt  
by other Members. WTO h as a critical collaborative role to find avenues through mutual 
understanding and cooperation with relevant international multilateral and private institutions to 
foster the conversation related to this topic for the benefit of Members in need. Though WTO is not 
a financial institution, it could work with such other institutions to share knowledge for the benefit 
of Members as the issue at hand touches both trade and finance.  WTO core texts are clear that the 
institution is mandated to work with internation al financial institutions on intersecting issues.  
Blocking such request makes multilateralism counterproductive especially for Members who rely on 
multilateralism as the mean to have their voice heard.  
2.14.   The other issue that needs to be tackled as it constra ints the development of many ACP 
countries is debt stress. The International Monetary Fund ( IMF) announcement of US D 650 billion in 
Special Drawing Rights  (SDR) on 23 August 20216 is welcomed but this kind of support goes more 
to the country that needs th em the least , further SDR is granted based on countries existing quotas 
in the IMF  thus those who needs the assistance more remain restricted . To recover effectively from 
the pandemic in addition to rebuilding from climate change ACP needs substantial supp ort and not 
a symbolic one.  
2.15.   Finally , the ACP Group supports the proposals by Côte d'Ivoire  and proposes that the following 
be considered for an outcome for MC12 both under trade finance and debt servicing:  
a. Trade finance:  
i. WTO works by all possible means, Member -Member collaboration, inter -institutional 
work, advocacy by the organization, towards helping support trader's access to trade 
finance . 
ii. Exchange views on how regulatory authorities could help mitigate constraints 
hindering the deployment of essential trade finance —particularly to SMEs.  
iii. Promote risk -sharing in support of trade finance, especially among export credit 
agencies, multilateral development banks, and private sector banks, including in the 
short-term segment of the market.  
iv. Further support multilateral development bank schemes which provide risk mitigation 
and liquidity for trade finance transactions, especially in countries that need it the 
most.  
v. A similar approach to help sustains trade finance and reduce the gaps globally as was 
delivered during the economic recession in 2008 -2009 could be used as a guide to also 
call for support to trade finance due to the impact of the C OVID -19 pandemic.  
b. Debt servicing:  
i. Continued financial assistance and debt service relief to Member countries facing the 
economic impact of the C OVID -19 pandemic through flexible lending and repayment 
facilities.  
ii. Continued collaboration to enhance capacities for  Members to meet the requirements 
of financial institutions.  
 
6 https://www.imf.org/en/News/Articles/2021/08/23/pr21248 -imf-managing -director-announces -the-
us-650-billion -sdr-allocation -comes -into-effect . WT/WGT DF/W/101  
 
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  3  CONCLUSION  
3.1.  The WTO  Working Group on  Trade, Debt and Finance plays a critical role as a conduit to assist 
Members and partners to share ideas and expertise to realize their developmental aspirations in line 
with the Ministerial mandate. It is therefore critical that WTO by all means possible  engage with 
other relevant institutions to assist Members to strengthen their trade capacities and to realize their 
developmental goals. The ACP Group therefore in view of the looming Ministerial Meeting 
recommends that the draft Ministerial Declaration r eflects the submissions made so far to the 
Working Group. Members should have sufficient time to review the proposed text before the 
consideration of the General Council and/or the Ministerial Conference.  
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