. /.  RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/WGTDF/W/51 
12 November 2010 
 (10-6019) 
  
  
- DRAFT –  
 
CHAIRMAN'S REPORT (2010) OF  THE WORKING GROUP ON  
TRADE, DEBT AND FINANCE TO THE GENERAL COUNCIL 
 
 
1. The Working Group on Trade, Debt and Finance met twice in 2010, on 4 June and 8 
November, under the Chairmanship of Ambassador F. Gonzales (Paraguay). Since the year 2008, it 
has become evident that the Working Group had become the focal point in the WTO for the 
examination of follow-up initiatives taken in support of trade finance. Hence, Members supported the 
focus of the Working Group’s activities, which we re generally seen as having contributed both to 
awareness-building in the institu tion and to support the Direct or-General's initiatives.   
 2. At the Working Group’s meeting in June, th e Secretariat based its report on WTO Document 
WT/WGTDF/W/48, and on a number of elements gath ered by G-20 experts on trade finance, in their 
preparations for the Toronto G-20 Summit. It app eared that trade finance market conditions had 
improved significantly since the fall of 2009; the bulk of trade flows (both trans-Atlantic and trans-
Pacific flows) was fully financed – liquidity bein g less of an issue globally. The improvement was 
driven by fast-growing emerging markets, for which spreads had come down to pre-crisis levels: they 
benefited from the "flight to quality" and in ge neral a greater selectivity of global banks towards 
counterparty risk. However, this improvement in major markets left smaller players, be they traders in 
low-income countries or smaller traders in develope d countries, vulnerable to credit scarcity. Part of 
the explanation for this development was greater selec tivity on the part of commercial institutions of 
their risk, or at least their perception of risk. More over, the attractiveness of trade finance as a banking 
activity may have been reduced by a number of factors such as an increase in commercial and 
sovereign risks, prudential regula tions and other reasons. The report of the meeting is contained in 
WT/WGTDF/M/20.  
3. At the meeting on November 8, based on a Secretariat report (WT/WGTDF/W/49), it was 
acknowledged that despite the confirmation of recove ry of trade finance markets across the main 
routes of trade (North America, Europe, Asia, and be tween Asia and the rest of the world), there was 
also a confirmation that traders in low-income count ries remained subject to the greatest difficulties in 
accessing trade finance at affordable cost, in particul ar trade finance. The same applied to small and 
medium sized enterprises in developed countries. As a result, the "lower end" of the trade finance 
market relied increasingly upon multilateral develo pment bank risk mitigation instruments. Low 
income countries' tread risked marginalization in  this period of recovery. Members acknowledged and 
supported the efforts of the Director-General in addressing these challenges both within the institution 
and internationally. Lack of adequate functioning of trade finance markets could be as important a 
barrier to trade than traditional obstacles to trade. At the invitatio n of the Chairman, a representative 
from the International Chamber of Commerce (ICC)  briefed the Working Group on the ICC's efforts 
to deliver market intelligence, policy advocacy – par ticularly with respect to regulatory issues – and 
loss default information on trade finance, to support the case of trade finance. The presentation by the 
ICC has been circulated to Members in WT/WGTDF /W/50. Besides, it has been noted that several 
delegations would like to discuss other issues pertaini ng to the relationship betw een trade and finance, 
and trade and debt. It was suggested that these delegations follow-up with written submissions to 
engage the Working Group in meaningful discussion of these matters.  WT/WGTDF/W/51 
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4. [On ... November 2010, the Working Group adopt ed its Annual Report (2010) to the General 
Council on a lapse-of-time basis.]   
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