The gap between supply and demand in trade financing could hamper the ability to support economic recovery after the pandemic, international organizations warned on Thursday (09.07.2020).
In joint declaration, the World Trade Organization (WTO), International Chamber of Commerce (ICC) and B-20 Saudi Arabia warned about the effects of reduced funding.
The text urged the private and public sector to collaboration to address the negative effects of the pandemic and stressed the importance of cross-border trade in order to boost the economy after the recession caused by Covid-19.
Trade finance is a critical element to revive global growth in imports and exports, the statement reiterated, estimating that trade finance would be worth between $2 trillion and $5 trillion to meet this demand.
Addressing the deficit will be the challenge, he said.
The growing gap between demand and supply will particularly affect small and medium-sized enterprises and those in developing countries, with significant implications for employment and income, he predicted.
In this regard, WTO Director-General Roberto Azevêdo said: “Failure to address the trade finance gap will seriously undermine ongoing efforts to give trade the boost it needs to help global economic recovery.”
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