World Trade Organization's Counsellor Marc Auboin discuss ADB Trade Finance Program's role in narrowing market gaps in trade finance.
How does TFP narrow trade finance gaps?
SOT: Marc Auboin
Counsellor, Economic Research & Statistics Division
World Trade Organization
“Trade finance programs have been developed between the mid-2000 and the early part of this decade, in part as a result of a recognition that there was a structural trade finance gap around the world, and of course they have been developed during the financial crisis.
The WTO has been a driving force behind the extension of these trade finance facilitation programs, which have been started at the EBRD and at the Asian Development Bank, which have been extended to other multilateral institutions so that there be sort a firewall of a trade finance facilitation program.
One very important function that these programs could fill is the possibility to close the so-called 'perception gap’ - the gap between the perception of risk of doing trade finance operations, which is high in developing countries; and the actual level of risk, which is small. So it provides an opportunity to learn by doing for developing countries, and more and more now between developing countries themselves."