RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/WGTDF/M/18 
9 July 2009 
 
 (09-3357) 
Working Group on Trade, Debt and Finance  
  
 
REPORT OF THE MEETING OF 31 MARCH 2009 
 
 1. The eighteenth meeting of the Working Group on Trade, Debt and Finance (WGTDF) was 
held on 31 March 2008 under the Chairmanship of  Mr. Martin Glass (Hong Kong, China).  The 
Working Group adopted
 the agenda contained in WTO/AIR/3328. 
2. In his introductory remarks, the Chairman  recalled that Members had agreed in the current 
period of crisis to continue m onitoring developments as to the availability of trade finance. The 
subject had drawn significant attention before th e G-20 Summit in London, and the Expert Group on 
Trade Finance had met under the chairmanship of the Director-General on March 18, 2009. The 
Secretariat had circulated its report to Members shortly thereafter in W/WGTDF/W/44.  The Director-
General had invited the Chairman to attend, as a sign of internal WTO "coherence" between Members 
and the Secretariat. The Chairman hence propo sed to centre the meeting's discussion on recent 
developments in trade finance, as reported by the S ecretariat. He also suggested to interact with the 
Secretariat on current preparations in the run-up to the London summit. 
3. The Secretariat  based its report on Document W/WGTD F/W/44, and on a number of elements 
gathered at the preparatory meeting of G-20 expe rts on trade finance, held in Washington on March 
25, 2009. It appeared that elements of a "trade finance" package, aimed at  supporting the availability 
of trade finance by a variety of public-backed ins titutions, national and intern ational, were being put 
in place for the Heads of States' approval. 
Further discussion on Trade Finance betwee n the Chair, Members and the Secretariat  
4. The Chairman  opened the floor to delegations wishing to ask questions on the presentation by 
the Secretariat, before moving to a more general discussion of the topic. 
5. The Representative of India  asked for more details on the utilization (amounts and 
geographical areas) of new trade finance faciliti es. He also asked about results on the ground of 
increased private-public partnerships, and encouraged th e Secretariat to circulate available surveys. In 
conclusion, he asked for the Expert Group to meet more regularly.  
6. The Representative of Australia  commended the WTO Secretariat for its presentation and 
more generally for its role in this area. She valu ed the work of the Expert Group with respect to 
information sharing. She asked whether the Secret ariat could elaborate on the market situation in 
Asia. 
7. The Representative of China  asked for three clarifications: how was the market gap 
estimated? what was the situation for emerging countries in particular? and whether the Director-
General's letter to the President of the Financial Stability Forum (FSF) to channel concerns on Basle II 
rules had triggered any positive reaction?  
8. The Representative of Brazil  congratulated the WTO Secretariat for what his delegation 
considered to be one of the most successful initia tives of the institution. He said that while trade WT/WGTDF/M/18 
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  finance had become more expensive and scarcer, the market gap and difficulties were concentrated on 
the most vulnerable countries. He also asked for some clarification about the methodology for calculating "market gap", and requested more frequent meetings of the Expert Group. He believed that 
the next meeting of the Working Group on Trade,  Debt and Finance should focus on implementation 
of a possible G-20 package in favour of trade finance, and could be held in the 2
nd or 3rd quarter of the 
year.  
9. The Representative of the Secretariat  provided more details on the extra funding made 
available to regional development banks and the IFC (World Bank Group) under existing trade 
finance facilitation programmes. He described how, in Asia, the Asian Development Bank was 
expanding its operations quickly. Total limits put in  place by regional development banks and the IFC 
had not been reached yet, so these institutions s till had "space" to cover more trade operations. Trade 
finance facilitation programmes were designed to be user-friendly and, once banks had been accepted 
in the networks of issuing and receiving banks, they could take advantage of the services provided 
under them. Typically, agreements for covering the e ndorsement of letters of credit could be given 
fairly rapidly and at affordable  fees. The Representative encouraged Members to seek additional 
information on the VoxEU internet-based website wh ere relevant articles had recently been posted, 
and on the websites of the institutions runni ng trade finance facilitation programmes.  
10. With respect to Basle II rules, one question was to bring the various stake-holders around the 
table to look at how the self-liquidity character of  trade credit could be better acknowledged, based on 
objective facts. For example, progress had been made  by the UK's Financial Service Authority (FSA) 
and UK-based banks in acknowledging that maturities for short-term trade finance could be different 
from the overall assumptions taken into account in th e Basle II framework. As a result, the FSA was 
willing to apply Basle II rules on trade finance within  the limits of existing flexibility. Finally, while 
methodology for estimating the "market gap" in trade finance could be improved, for the time being it 
was based on a mix of the market’s own estimates of  inability to serve new customers, as revealed by 
the reduction in volumes traded in the secondary mark ets, and of market surveys which pointed to 
"gaps" in certain regions in the world. 
11.  The Chairman  thence suggested that the meeting move to a more general discussion of issues 
that surrounded trade finance.  
12. The Representative of Canada  provided a summary of his government’s activities to help the 
international effort to fill the gap in the market for trade finance. Additional resources had been made 
available to EDC, Canada's export credit agency, in  particular to increase contingent liabilities for 
short-term business in 2008 and 2009. Canada was also  helping to step up trade finance facilitation 
programmes as a shareholder of international financia l agencies. Canada had also taken a stake in the 
International Financial Corporation's (IF C) new Global Trade Liquidity Fund (GTLF). 
13. The Representative of Japan  commended the Secretariat for presenting Document 
WT/WGTDF/W/44 and for the regular briefings on  trade finance contained in WTO Monitoring 
Reports. He appreciated the WTO's effort to levera ge the political energy on trade finance issues, 
taking into account the division of labour implie d by the WTO coheren ce mandate.  Japan had 
committed significant funding for regional development banks and the IFC in the area of trade finance, investing in particular $1billion in the IFC's GTLF. 
14. The Representative of Hong Kong, China
 noted the deterioration of the situation in the trade 
finance market. He reflected on his authorities' measures taken in Novemb er and December 2008 to 
stabilize financial markets and support local ente rprises, in particular small and medium-sized 
enterprises (SMEs). Special loan guarantee schem es and cash flow support schemes had been offered 
to them. Long term reforms to fix the financial sy stem were nevertheless needed to address the causes 
of the lack of availability of trade finance.  WT/WGTDF/M/18 
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  15. The Representative of the Republic of Korea  thanked the WTO for addressing the challenges 
faced by trade finance, particularly in devel oping countries. WTO Expert Group Meetings on Trade 
Finance were useful in this regard. The deteriorati on of trade finance markets despite recent measures 
taken by IFIs and Export Credit Agencies (ECAs) ha d the potential to suppress global trade further. 
IFIs and ECAs should continue to  expand the supply of trade finance until conditions returned to 
normal. Obstacles to trade finance should be e liminated, and efforts by the WTO to increase 
awareness and mobilize political energy at a possibly higher level on this issue were most welcome. 
16. The Representative of the European Communities  indicated that WTO work in this area was 
important. From its perspective, there were three tr acks of activities and initiatives: (1) activities at the 
multilateral level (in particular in the G-20 contex t); (2) activities and initiatives at the regional and 
national levels, in particular the increase in ceilings  and the creation of new products by ECAs – the 
working figure in the European Union was an increase by 60% in business volumes for large 
Members' ECAs, and a four-fold increase for smaller Member-States; and (3) at the regulatory level, 
OECD rules were viewed more flexibly on a tem porary basis, although Members believed that such 
review should not go too far, the problem  not being  regulatory in nature.   
17. The Representative of China  noted with other WTO Members that while the institution did 
not provide trade finance nor had jurisdiction in this  domain, it had done everything it could to help 
mitigate the difficulties with trade finance since the outbreak of the financial crisis. China was most 
concerned about the deterioration of market cond itions, and was contributing its part to the global 
effort to mitigate the situation: since Octobe r 2008, the Chinese SME's Development Fund had been 
boosted to support credit guarantees for SMEs. The G overnment of China also positively considered 
partnership with the IFC. The central bank had reached an understanding w ith the Inter-american 
Development Bank (IaDB) on supporting trade finance, while it had signed currency swap agreements 
with several other emerging countries. Finally, the EXIM Banks of China and the United States had 
concluded an agreement to support bilateral trade. However, the Government of China considered the 
scarcity of trade finance to be a systemic issue, and as a result had committed to playing its part in 
removing obstacles to the financing of trade in the context of the G-20 process. 
18. The Representative of Pakistan  asked whether a sector-by-sector analysis was available of the 
losses incurred by exporters from developing countri es due to the bankruptcy of their buyers. 
19. The Representative of Secretariat  replied that the IMF-BAFT survey provided details by 
company size (SMEs, larger corporations, multi-na tional corporations), but not by sector. He was 
nonetheless willing to circulate a Secretariat Note re viewing the latest available information on the 
situation of trade finance markets (later circulated as WTO Document WT/WGTDF/W/45). 
20. The Representative of Turkey  appreciated the efforts to revive  trade finance, particularly in 
view of the gloomy trends and forecasts for intern ational trade, which had the potential to affect 
global supply chains and trigger protectionism. At th is juncture, consideration of trade finance seemed 
to be one of the most concrete responses by the WT O to the effects on trade of the financial crisis. 
Like his colleagues in the room, the Representative shar ed the view that the scarcity of trade finance 
was a systemic issue for the world economy. SMEs in  developing countries were particularly affected. 
As a result, the coordination among Eximbanks need ed to be improved. On its side, the Turkish 
Eximbank was aiming at increased support to Turkish trade by 37% in 2009. 
 
21. The Representative of Cuba  noted that while large emerging economies could rely on foreign 
exchange reserves, smaller econom ies could not. The Working Group should have a closer look at the 
issue of debt, as the current crisis may be respons ible for a new round of external debt-raising by 
developing countries, many of which already suffered from debt overhang. WT/WGTDF/M/18 
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22. The Chairman
 offered a short summary of the tho ughts and reflections heard during the 
discussion. The Working Group had shown great inte rest in the progress on fixing trade finance 
during these times of severe global st ress. It was supportive for its work to have been focused in that 
direction – which had contributed greatly to awar eness-building and to support the DG's initiatives. 
After taking stock of decisions made or initiativ es taken by the G-20 Summit, it would perhaps be 
useful to meet in the second part of the year, if not  earlier, in particular to exchange views on the level 
of implementation of such initiatives in relation to mark et developments at that time. It was noted that 
the Director-General intended to reconvene the Expert Group during this period. It was also well understood that some of the issues raised in the c ontext of trade finance could not be solved by the 
WTO, or would not even be under the remit of th e institution; but perhaps the Working Group could 
continue in the months to come, within its exis ting mandate, to revisit the issues of contagion, 
availability of trade finance, etc., as to their potential impact on the real economy and the global trading system. As to the question of debt, this could be further examined in a future meeting, 
although it would be most appreciated if Members could provide papers as a basis for introducing 
discussions on that matter. With this, the Chairman declared the meeting closed. 
 
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