G20 economies should work to provide trillions of US dollars in trade financing for developing countries to ensure the recovery of the global economy from the COVID-19 pandemic, a top WTO official said on Saturday.
WTO Deputy Director-General Alan Wolff told G20 leaders it was critical to utilize trade to help underwrite the economy, facilitate trade in essential medical supplies and reform the institutional framework for world trade.
“When crops do not move and factories are idled throughout the developing world, the global recovery will be delayed for all,” the American said. “A trade finance initiative should be seen as an essential part of improving the outlook for economic recovery.”
Photo: Reuters
The World Economic Forum this year said that the pandemic was exacerbating a gap in global trade funding that was already at US$1.5 trillion before the crisis began, with over 50 percent of requests for trade funding being rejected.
The lack of access to financing hits least developed countries hardest.
Cooperation between international institutions, the WTO and commercial banks would be needed to free up trillions of US dollars in required funding, Wolff said.
G20 leaders were set to underscore their commitment to the multilateral trading system in a joint statement to be signed yesterday, a draft of the communique showed.
The Switzerland-based WTO is in turmoil as the administration of US President Donald Trump has blocked the selection of a new director-general and the functioning of a dispute settlement body.
Wolff urged G20 leaders to engage in a “major institutional reform effort” and restore the WTO’s deliberative and negotiating functions.
Wolff also called for new measures to speed up the supply of essential medical products.
Barriers at borders and export restrictions should be reduced, particularly for the benefit of the poorest countries, he said.
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