WORLD TRADE  
ORGANIZATION   
WT/WGTDF/W/58/Rev.1 
26 October 2011 
 (11-5385) 
  
 
 
 
CHAIR'S REPORT OF THE WORKING GROUP ON TRADE, DEBT  
AND FINANCE FOR 2011 TO THE GENERAL COUNCIL 
 
Revision 
 
 I. INTRODUCTION 
1. The Working Group on Trade, Debt and Finan ce (“the Working Group”) was established at 
the 4
th Session of the Ministerial Conference in Doha  in November 2001 with the following mandate 
(“the mandate”)1:   
"We agree to an examination,  in a Working Group under the auspices of the General 
Council, of the relationship between trade,  debt and finance, and of any possible 
recommendations on steps that might be taken within the mandate and competence of the WTO to enhance the capacity of the multila teral trading system to contribute to a 
durable solution to the problem of external indebtedness of developing and least-
developed countries, and to strengthen th e coherence of international trade and 
financial policies, with a view to safeguarding the multilateral trading system from the effects of financial and monetary instab ility.  The General Council shall report to 
the Fifth Session of the Ministerial Conference on progress in the examination." 
2. This report describes the activities of the Working Group since the 7
th Session of the 
Ministerial Conference in Geneva in December 2009. 
II. THE GROUP'S ACTIVITIES SINCE THE 7TH SESSION OF THE MINISTERIAL 
CONFERENCE 
3. The Working Group held four formal meeti ngs between March 2010 and October 2011: on 
4 June 2010, 8 November 2010, 10 May 2011 a nd [24] October 2011. The Working Group was 
chaired by Ambassador F. González (Republic of Paraguay) in 2010, and by Mr. Martin Glass (Hong 
Kong, China) in 2011. 
4. As concluded in the report of the Working Group to the 2009 Ministerial Conference 
(WT/WGTDF/9), Members wished to continue exch anging views on trade finance in relation to the 
market situation, as the Working Group had become fo r some time the focal point in the WTO for the 
examination and the follow-up of initiatives taken in  support of trade finance. Members supported the 
focus of the Working Group’s activities, which we re generally seen as having contributed both to 
awareness-building in the institutio n and to support for the Dir ector-General's initiatives.   
5. At the Working Group’s meeting on June 4, 2010, the Secretariat based its report on 
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 
                                                      
1 WT/MIN(01)/DEC/1, para. 36. WT/WGTDF/W/58/Rev.1 
Page 2  
 
  improved significantly since the autumn of 2009; the bulk of trade flows (both trans-Atlantic and 
trans-Pacific) 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. 
6. At the meeting on November 8, 2010, based on a Secretariat report (WT/WGTDF/W/49), it 
was acknowledged that despite the confirmation of re covery 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. 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 development bank risk mitigation instruments. Low income countries' trade risked 
marginalization in the period of recovery. Member s 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 an important barrier to trade. At the 
invitation 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 – 
particularly with respect to regulatory issues – and loss default information on trade finance, to 
support the case for trade finance. The presentati on by the ICC was circulated to Members in 
WT/WGTDF/W/50. It was also noted that several delegations had expressed the desire to discuss 
other issues pertaining to the relationship between trade and finance, and trade and debt. It was 
suggested that these delegations follow-up with writt en submissions to engage the Working Group in 
meaningful discussion of these matters. 
7. At the meeting on May 10, 2011, Members ex amined the progress made by the WTO in 
implementing the mandate granted by the G-20 Summit in Seoul with respect to possible actions and 
recommendations to improve the access of low-income  countries to affordable trade finance. The 
Secretariat reported to Members in WT/WGTDF/W/ 52.  In addition, the International Finance 
Corporation of the World Bank Group produced for the Working Group a short information note on the importance of trade finance programs in favour  of low-income countries (WT/WGTDF/W/54).  
The International Chamber of Commerce also produ ced a short information note on the financing of 
value-added chains, circulated in WT/WGTDF/W/ 55. Under a separate agenda item, the Working 
Group considered the submission by the delegation of Brazil (WT/WGTDF/W/53). After an extensive 
discussion, the Chairman sensed th at there had been general support for the thrust of Brazil's 
proposals, which contained two "pilla rs".  As regards pillar one, the Chairman concluded that he had 
heard almost universal, unqualified support for unde rtaking the work program sequentially; as regards 
pillar two, the Chairman had noted a number of re quests for further consideration, and concerns 
expressed regarding both the Cohere nce Mandate, and the need to avoid duplication of work with 
other international organizations and processes. Furthe r consultations would be held to refine Brazil's 
proposal further under pillar two. The report of  the meeting is contained in Document 
WT/WGTDF/M/22.    
8. At the meeting on October 24, 2011, the Secr etariat presented the literature review on the 
relationship between exchange rate and trade (WT/ WGTDF/W/57) as set out in Brazil's proposals and 
agreed by Members. Several Members and observers had drawn the attention of the Secretariat to 
selected literature. Some 30 papers had been sent to  the Secretariat for review. Members had a first  WT/WGTDF/W/58/Rev.1 
 Page 3 
 
 
  discussion on the direct and indirect effects of ex change rate volatility and misalignments on global, 
regional and sector trade flows. Members also considered the new submission by the delegation of Brazil, as circulated in Document WT/WGTDF/W/56. The Working Group also took stock of the on-going work on trade finance, in particular the report by the Secretariat on the initiatives of the 
Director-General, aimed at improving the availab ility of trade finance in low-income countries. 
III. CONCLUSIONS 
9. Members recommended that the Working Group continue to examine the relationships 
between trade, debt and finance, and to make appropriate recommendations on steps that might be 
taken within the mandate and competence of the WT O to enhance the contribution of the multilateral 
trading system to the alleviation of the extern al indebtedness of developing and least-developed 
countries, and to strengthen the coherence of interna tional trade and financial policies with a view to 
safeguarding the multilateral trading system from the effects of financial and monetary instability. 
10. Members wished to continue exchanging view s on trade finance in relation to market 
developments after the 8
th Session of the Ministerial Conference, including on internationally agreed 
initiatives. The Working Group also agreed to conti nue to proceed with the work programme on the 
relationship between exchange rates and trade, in pa rticular to work at holding a seminar on the topic 
in the first quarter of 2012.  11. On November 4, 2010, the Working Group adopted  its Annual Report (2010) to the General 
Council on a lapse-of-time basis.  
 
 
_______________ 
 
 WT/WGTDF/W/58/Rev.1 
Page 4  
 
  ANNEX 
 
Summary of contributions received in the Working Group  
on Trade, Debt and Finance  
(January 2010 – October 2011)  
Symbol 
(WT/WGTDF/W/-) Member / Other source Title or Topic 
W/48 Secretariat Informal Report on the Expert 
Group on Trade Finance  
W/49 Secretariat Informal Report on the Expert 
Group on Trade Finance 
W/50 International Chamber of 
Commerce The Role of the International 
Chamber of Commerce in 
Turbulent Times  
W/51 Chairman Draft Annual Report to the 
General Council 
W/52 Secretariat Informal Report on the Expert 
Group on Trade Finance 
W/53 Brazil Submission by Brazil on the 
Relationship Between 
Exchange Rates and International Trade 
W/54 International Finance 
Corporation Trade Finance: An Essential 
Contribution of Aid-For-Trade 
W/55 International Chamber of 
Commerce Supply Chain Finance: The 
Challenge of Providing More 
W/56 Brazil Submission by Brazil on The 
Relationship Between Exchange Rates and 
International Trade 
W/57 Secretariat The Relationship Between 
Exchange Rates and International Trade: A Review 
of Economic Literature 
 
W/58 Chairman Draft Annual Report to the 
General Council 
 
 
__________