The group of 20 major economies are expected to work to provide billions of dollars in trade finance to developing countries to ensure the recovery of the global economy after the Covid-19 pandemic, a senior official said on Saturday. World organization of commerce.
WTO Deputy Director-General Alan Wolff told G20 leaders it is essential to use trade to help support the economy, facilitate trade in essential medical supplies and reform the institutional framework for trade global.
“When crops are not moving and factories are idle in the developing world, the global recovery will be delayed for all,” Wolff, a US citizen, told leaders. “A trade finance initiative should be seen as an essential part of improving the prospects for economic recovery.”
This year’s World Economic Forum said the Covid-19 pandemic is exacerbating a gap in global trade finance and that we need to address it now which was already $ 1.5 trillion before the crisis began, plus 50% of requests for financial support to trade being rejected.
Lack of access to trade finance hits the least developed countries hardest, which already suffer from the high cost of financial transactions.
Wolff said close cooperation between international financial institutions, the WTO and major commercial banks would be needed to free up trillions of dollars in required funding.
G20 leaders will underline their commitment to the multilateral trading system in a joint statement to be released on Sunday, a draft statement showed.
The Geneva-based world trade body is in turmoil as the administration of outgoing US President Donald Trump has blocked both the selection of a new CEO and the functioning of a dispute settlement body.
Wolff urged G20 leaders to seriously engage in a “major institutional reform effort” and restore the deliberative and negotiating functions of the WTO.
Wolff also called for new measures to speed up the supply of essential medical products where they are needed, including updates to existing agreements to ensure duty-free global trade in pharmaceuticals and medical equipment.
He said border barriers and the use of export restrictions should be reduced, ensuring greater transparency and speeding up improved trade facilitation efforts, especially for poorer countries.