UN agrees to review global trade finance gap

Humanitarian group confirms it will examine root causes of global trade finance shortfall, with a view to boosting international development

Following pressure from the International Chamber of Commerce (ICC), the UN has announced that it will review the global trade finance gap – cited the world over as a major impediment to business growth.

In a report summing up its recent forum on financing for development, the UN’s Economic and Social Council wrote: “We note that many micro, small and medium-sized enterprises are not benefiting sufficiently from the international trading system, and have difficulties integrating into global value chains.

“We will promote policies that encourage access by micro, small and medium-sized enterprises to adequate and affordable trade finance at all levels.

“We also note the $1.6 trillion shortage in trade finance provision reported by the… ICC and invite the Inter-Agency Task Force to review the trade financing gap, within its mandate and existing resources and as part of its 2018 report.”

On a related point, the Council added: “We reaffirm that international trade is an engine for inclusive economic growth and poverty reduction, and can contribute to the promotion of sustainable development. We note that trade growth was subdued over the past year.

“To make trade more free and fair, we recognise the importance of strengthening the international trading system and increasing the contribution of trade to our economies.”

It added: “World Trade Organization members have made significant progress towards the goal of providing duty-free and quota-free market access on a lasting basis for all products for all least-developed countries and further improvement in this direction would be welcomed.”

In its 22 May announcement urging the UN to examine the trade finance gap, the ICC noted that the global network of anti-financial crime and anti-money laundering legislation had exerted a chilling effect upon the market.

Reacting to the UN’s report, ICC secretary general John Danilovich welcomed the UN’s pledge to investigate the issue. He said: “We welcome the enhanced focus placed by the UN’s Financing for Development Forum on securing access to trade finance for small businesses and entrepreneurs. We know that small businesses face increasing difficulties accessing bank finance to support international transactions.

“This means lost opportunities to use the international trading system to support inclusive growth and job creation – particularly as the internet opens up opportunities for many small businesses to trade internationally.”

He added: “The decision to mandate an official UN review of the estimated $1.6 trillion trade financing gap is a welcome step in addressing this now chronic problem. This is a complex global problem requiring a concerted global response in the context of the UN’s 2030 Agenda for Sustainable Development.

“ICC will continue to engage fully in this process, utilising its unique Observer Status within the UN system.”

Read the UN's full report here.

Scroll to top