THE World Trade Organisation (WTO) is encouraging its members to build on their discussions to develop a trade finance work programme to benefit developing economies in the run-up to the 12th Ministerial Conference (MC12) scheduled for November this year.

Speaking at a meeting of the Working Group on Trade, Debt and Finance on Monday, WTO Director-General Ms Ngozi Okonjo-Iweala said declining private trade credit line availability has had a knock-on effect on low to middle-income countries, which have few government schemes to help importers and exporters and frequently lack export credit agencies or even adequate fiscal resources to make trade finance available to businesses.

"Multilateral development banks provided an estimated record USD 35 billion in one year, but it is only a dent in the USD 1.5 trillion trade finance gap," the DG noted. "Working capital costs including for the financing of trade have increased 30 per cent over the past year on average, 60 per cent in some developing countries."

The rejection rate for trade finance applications of small and medium enterprises is 45 per cent internationally, leading in half of these cases to trade transactions being abandoned.

Ms Okonjo-Iweala reaffirmed that trade finance is both a financial and a trade issue which is pertinent to the business of the WTO. She said, "I'm convinced we have absolutely no way of integrating developing members more effectively into the multilateral trading system without better attention to this issue."

Recalling the WTO's convening and advocacy role during the 2008-09 financial crisis, she welcomed proposals to guide the MC12 outcomes in mobilising trade finance for the benefit of its members.