United Nations Radio

New global trade agenda

Developing economies have been hit the hardest by the worst decline in global trade flows since the Depression. To mitigate the crisis, the World Bank pledged to increase the access of middle income and developing economies to trade finance with its new Trade Facilitation Facility (TFF).

In a key note speech to delegates at the UN, John S. Wilson, Lead Economist for the World Bank, outlined a new global trade agenda to aid Land Locked Developing Countries. Kit Cockburn caught up with him and found out why Mr. Wilson thinks the credit crunch is an opportunity for increased and sustainable trade growth in developing nations.

DURATION: 4:00

WILSON: The bank has had an active trade program for a number of years. But mindful of the crisis and the need to very rapidly address constraints associated with the crisis, in many dimensions the bank has very rapidly moved to initiate new programs of assistance, lending, grants, aid and other programs to help countries to address capacity and other restraints in trade, as an engine to help alongside other programs in moving out of crisis and beyond.

COCKBURN: You mentioned in the talk that donations would be a key part of the process. Is this something that could possibly put the poorer countries in the world into further world debt?

WILSON: The Bank has moved to increase on a demand-basis it's lending and grant making in regard to trade, even before the crisis. The donor community has been, I think, very generous in supporting the work of the Bank and other institutions in regard to financial and other technical assistance, including to the least developed on an aid basis whereby it is not directly associated with adding new burdens of debt. So, the Bank technical assistance and knowledge and other expertise, in particular to the least developed countries, combined with the very strong interest of donors in supporting the trade agenda, I think combines to a great opportunity to take advantage of moving beyond the crisis and addressing some of these embedded barriers to trade and trade facilitation.

COCKBURN: There seemed to be a few nodding heads around as you were giving your presentation today from the developing countries. Is there any aspect of the agenda that could see people from those countries having a problem with?

WILSON: I believe that what we hear at the Bank is the recognition, including in the least developed countries, that these embedded barriers to trade associated with regulation, with infrastructure, with addressing issues of transparency are agenda items that really need to be taken very seriously. There's the increased recognition at the country level that they need to be addressed. So I think we're very optimistic at the Bank, and I think expressions of demand and requests for assistance in this area that countries are ready and do recognize the need to address these barriers and that institutions like the Bank and others are prepared to assist in any way they can in making real progress.

COCKBURN: Just one last question. One of the questions came about speculating as to what the world economy would look like after this kind of change. At the time you said, obviously, you won't know until later on. If you could just give us some idea of what you think the changes will be on a global economic scale?

WILSON:I think coming out of the crisis hopefully we will be in a more sustainable growth path. That problems that helped engender the crisis will have been addressed. That the recognition that trade and these barriers associated with trade facilitation and logistics are ones that are among the most costly and detrimental to global economic growth during the crisis. Looking beyond that I think there is real opportunity for a more sustainable and stronger growth trajectory over time that even before the crisis.