WT/WGTDF/W/98/Add.1  
20 May 2021 
(21-4266) Page: 1/4 
Working Group on Trade, Debt and Finance  Original:  French  
 
  
INTRODUCTORY NOTE BY CÔTE D'IVOIRE TO THE DISCUSSION HELD ON ITS PROPOSAL 
CONTAINED IN DOCUMENT WT/WGTDF/W/98, ON 17 MAY  2021, IN THE  
WORKING GROUP ON TRADE, DEBT AND FINANCE  
COMMUNICATION FROM CÔTE D'IVOIRE  
Addendum  
Upon the request of the members of the Working Group on Trade, Debt and Finance, the 
Côte d'Ivoire hereby communicates in writing the introductory and explanatory note that it 
presented orally at the Group's meeting on 17 May 2021, in the context of  the discussion on its 
proposal in document WT/WGTDF/W/98.  
 
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Mada m Chair , 
In order to reduce the number of questions and requests for explanations, Côte d'Ivoire would 
welcome your understanding and that of Members in order to take a few minutes to share the 
following comments on its communication:  
As you know, paragraphs 1.1 to 1.6 of the proposal in document  WT/WGTDF/W/98 identify and 
underline the difficulties related mainly to access to trade finance for developing countries and LDCs . 
By way of solutions, paragraphs 1.7 to 1.10 of the proposal in document WT/WGTDF/W/98 suggest 
what could be done : by WTO Members ; by the Se cretariat,  upon the request of Members ; and by 
the WTO together with  other  relevant  organizations and competent institutions . 
I. IDENTIFICATION OF AND JUSTIFICATION FOR THE NEED TO DISCUSS THE 
COMMUNICATION ON "QUESTIONS REGARDING ACCESS TO TRADE FINANCE  
IN THE CONTEXT OF COVID -19" 
This document begins by highlighting the fact that most developing and least developed countries, 
including Côte d'Ivoire, continue to face many difficulties concerning access to trade finance . These 
difficulties, which are major obstacles preventing MSMEs from seizing the trade opportunities 
provided by WTO Agreements, are real and have been confirmed by several studies, surveys and 
reports , in particular  the report by the African Development Ban k and  Afreximbank of 
September  2020, which explains the trade finance situation at present and for the next seven to 
eight years . The study is updated every two years .1 
 
The document addresses matters concerning the supply  of trade finance, namely , the role and 
involvement of local and international banks, the banking products offered in Africa, and the need 
for finance . It also examines matters linked to demand, namely , the obstacles to responding to 
applications from  enterprises, particularly SMEs , international factors ( regulations, foreign currency 
financing) . It also highlights the trends  observed , in particular a significant decrease in the 
involvement of banks in trade finance since the emergence  of COVID -19, an increasing rate of 
 
1 African Development Bank and Afreximbank  (2020), Trade Finance in Africa  : Trends over the Past 
Decade and Opportunities Ahead, September 2020, available at www.afdb.org ; study updated by: African 
Development Bank and Afreximbank (2021), Survey of the Impact of COVID -19 on African Trade Finance, 
April 2021, available.  WT/WGTDF/W/98/Add.1  
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  rejection of applications  from SMEs , despite a default rate on trade -related bank loans  that is 
significantly  lower than the average default on other loans . While around 30 % of trade finance goes 
to SMEs, the rate of rejection by banks f or applications  from SMEs is  47%, which is higher than the 
rate for all other categories of enterprises . The rate of rejection for letters of credit applications has 
increased by 30 % since the beginning of the COVID -19 crisis . The explanations put forward for this 
increase include the increase in regulatory requirements related to anti -money -laundering 
legislation, which is why we are placing such a strong emphasis on the development of legal entity 
identifiers . It is important to highlight  the reduction in credit lines and letter of credit confirmation 
lines from international banks to national banks, which has had a discriminatory effect on smalle r 
enterprises.  
 
These difficulties  concerning  access to financing have also been confirmed in a report by the 
Global  Trade Review . The report also draws attention to the increased cost of working capital for 
SMEs at the international level.  
 
In this regard, a global survey on SMEs was carried ou t by "Collaborative Cash Flow Optimisation" 
(C2FO), the largest digital platform (fintech) for value chain financ e, in December  2020 and 
January  2021. As part of this survey, over 6,700 representatives of SMEs from Europe, North 
America and  the Asia -Pacific region were asked about the state of their working c apital.  
 
The survey revealed a "precipitous rise"  in the cost of working capital financing , and growing 
concerns regarding late payments and extended terms for payment s by customers  of SMEs . The 
costs of working capital have increased by an average of 30-35% for SMEs in developed countries , 
but the highest increases have been observed in developing countries, such as Turkey (+69%) and 
India (+56%). All inter -enterprise financing categories  that currently exist  in international trade , 
such as factoring, and value chain and bridging financ e, have been affected . It is concerning that 
the terms  for payments, particularly to SMEs, have been significantly extended, which represents a 
serious threat to such enterprises.  
 
The CEO of C2FO,  Alexander Kemper, has echoed this situation,  stating : "While it's heartening that 
many SM Es in this survey have a positive outlook for their immediate future, it is also very clear 
that more needs to be done to provide these businesses with immediate access t o the low -cost 
liquidity they need to grow".  
 
Moreover, a study published in March  2021 by the International Finance Corporation (a sister 
organization of the World Bank focused exclusively on the private sector) on trade finance and 
COVID -19 provides  information obtained from 163 client banks, by sector and by region, on the 
difficulties that have emerged on the markets, and  some suggestions for improvement . The study 
confirms the points raised above, namely,  the fact that 40% of banks have experienced a period of 
"stress"  in the form of  a decrease in correspondent banking relationships , a reduction in credit and 
confirmation lines and an increase in costs . Out of the banks that participated in the study, 90 % had 
requested continu ed support f rom national and international development financial institutions  in 
order  to provide guarantees and credit lines . We can supply  copies of these  reports and studies if 
necessary . 
 
Therefore, the issue raised in document WT/WGTDF/W/98  is not specific to Afr ica but rather is a 
global issue, although Africa remains the most affected continent.  
 
It is clear that COVID -19 has exacerbated these trade finance access issues , which are more or less 
structural, and which are the cause of the increased  need for financ ing in many developing countries, 
particularly in Africa . I recall that, before the pandemic, the unmet need for trade finance was 
estimated  at USD 1.5 trillion per year, of which USD 80 billion  was in Africa.  
 
II. DRAFTING OF SOLUTIONS BY MEANS OF A ROADMAP O R WORK PROGRAMME  
Paragraphs 1.7 to 1.10 of document  WT/WGTDF/W/98 of 17 December  2020 suggest a series of 
actions to be taken by Members, the WTO Secretariat, and by the WTO together with  other relevant  
international institutions . In addition to these proposals, and in order to anticipate certain questions 
from Members and to move forward, it would be useful for us to develop together a very specific 
roadmap or a work programme , based on the following elements : 
 WT/WGTDF/W/98/Add.1  
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  1. COLLABORATION AMON G MEMBER STATES  
1.1 Action that could be taken by Member States during the COVID -19 pandemic , in terms 
of sharing and exchanging information and best practices  
For example, Member States could exchange information on:  
 
• How they mobilized import/export financing for their enterprises . This question has already 
been discussed , namely  at the meeting of the Working Group in July 2020. Several Members 
provided information that needs to be completed.  
• How programmes aimed at protecting the cash f low of trade enterprises with payment 
moratorium s, and bank assistance were implemented . Who are the stakeholders ? Who takes 
the risk or bears the cost associated with these initiatives?  
• How programmes extending the terms  for the repayment of government loans or payment 
guarantees provided by the Government were applied . How do they function in practice?  
• How export agencies and national development banks were mobilize d. What do the y 
currently provide ? What arrangements cou ld be useful for our countries, in particular those 
that do not have export credit agencies ? 
1.2 Action that could be taken by Member States at a more structural level, in terms of 
sharing information and best practices  
For example, Member States could sha re information on how to better mobilize resources for trade 
finance in a country, namely , on how to : 
 
• Improve the conditions of supply , that is, how to ensure that banks grant more letters of 
credit and import and export loans . 
• Introduce factoring  and supply chain finance onto the market . We would welcome advice 
and assistance in this regard . As indicated in many analyses, we cannot participate actively 
in value and supply chains  if our enterprises do not benefit from means  of trade financ e that 
are adapted to these chains.  
• Improve the conditions of supply  (to enable SMEs to be registered, provide guarantees on 
invoices, have an accounting system, and, particularly, to ensure that they know what to 
ask for) with regard to trade finance , and  therefore improve the  information available on 
trade finance products . We could use the trade finance guide for SMEs recently published by 
the International Trade Centre in conjunction with the British Exporters Association and the 
Forum of Private Busine ss. The question remains whether in other countries, there are other 
guides of this type or information on trade finance available for enterprises, which may be 
useful for other WTO Members?  
2. THE WTO AS AN INSTITUTION:  
2.1 The Secretariat  
• Explore the pos sibility of WTO technical assistance or a technical assistance programme 
relating to trade finance . 
• Invite the Enhanced Integrated Framework (EIF) to inform Members about what it does and 
could do  to facilitate access to trade finance for SMEs, and, in par ticular, examine the 
possibility of integrating trade finance into the EIF's diagnostic studies and projects . Such 
studies have been  carried out for certain LDCs in Asia, but not yet in Africa.  WT/WGTDF/W/98/Add.1  
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  • Facilitate the adoption of a global legal identification system for companies such as the global 
Legal Entity Identifier (LEI) . The Legal Entity Identifier enables importer s, exporters and 
banks to be recognized internationally, and to be accepted for credit and payments related 
to trade, by partn ers. Such a system was presented to the WTO and attracted  the interest 
of several Members . The Secretariat could facilitate direct contact with the Global Legal 
Entity Identifier Foundation . 
• Explore which specific solutions could be implemented to facilita te access to trade finance 
for enterprises in LDCs and other affected countries, in particular SMEs.  
• Help affected and volunteer countries to identify  means of trade finance that could be 
mobilized in these countries.  
• Collaborate with other international institutions in order to mobilize existing foreign trade 
finance solutions.  
3. COLLABORATION BETWEEN THE WTO AND OTHER INTERNATIONAL INSTITUTIONS 
(MULTILATERAL AND REGIONAL BANKS)  
Consideration could be given to the joint action that the WTO could take with : 
 
• Multilateral development banks and regional banks to improve and facilitate access to trade 
finance for developing country Member States and least developed countries with a view to 
increasing participation in trade;  
• Other international o rganizations and internationally -recognized  professional organizations 
that can provide analyses or solutions on the matter.  
CONCLUSION  
The Working Group on Trade, Debt and Finance : 
 
In light of the above, the Working Group on Trade, Debt and Finance will establish a roadmap or 
work programme based on points 1, 2 and 3, and will report to the General Council on its progress, 
with an emphasis on the cooperation and solidarity of Member States in this regard . 
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