TRADE, DEBT AND FINANCE WTO’s contribution to solving debt and financial crises

The Working Group on Trade, Debt and Finance was set up at the Fourth Ministerial Conference in Doha in November 2001. Members had seen financial crisis in Asia and the heavy debt burden borne by many developing countries, and they decided to explore how trade could help.

The underlying belief is that markets should be kept open worldwide in periods of financial crisis. This would ensure that crisis-hit economies can continue to count on exports in order to earn foreign exchange, and to help their incomes to grow. If access to foreign markets is restricted, indebted countries may not be able to earn enough foreign exchange and to service their external debt. They may have to resort to further unsustainable borrowing.

During the six meetings it held, the working group examined the relationship between trade and finance, between trade and debt, and the relevant WTO provisions. The group made good progress in identifying key linkages. A number of papers were presented both by members and by international governmental organizations.

The working group is now proposing a more focused list of themes and projects for further work after Cancún:

  • trade liberalization as source of growth
  • WTO rules and financial stability
  • the importance of market access and the reduction of other trade barriers in the Doha Development Agenda’s negotiations
  • trade and financial markets
  • trade financing
  • better coherence in the design and implementation of trade-related reforms and monitoring
  • the linkages between external liberalization and internal reforms
  • external financing, commodity markets and export diversification