The European Bank for Reconstruction and Development (EBRD) has joined the World Trade Organization (WTO) and other multilateral development banks to provide urgently needed support for trade during the COVID-19 crisis, which has caused a devastating economic downturn, the EBRD and WTO announced in a joint statement on Wednesday.
The EBRD, the WTO, the International Finance Corporation (IFC), the Asian Development Bank, the African Development Bank and the International Islamic Trade Finance Corporation said that they committed to working together to ensure that trade finance remains available through the ongoing difficult period, just as they did previously during the global financial crisis of 2008-2010.
They added that they will join forces to monitor ongoing developments and act to fill financing gaps that could emerge.
“We prioritise our support to areas in the world where such support is needed most, particularly the poorest countries. We also call on other institutions, trade credit insurers, central banks, other public-backed and private sector institutions to join current efforts and support essential trade finance transactions,” they added in the statement.
The EBRD has stepped up its support under its Trade Facilitation Programme, providing amplified financing for trade with a record €1.5 billion for the first five months of 2020 in the 38 economies in Europe, Asia and Africa where it currently invests.
Global trade is expected to drop around 18.5 percent (Y-o-Y) in the second quarter of 2020 due to the COVID-19 crisis, according to the WTO.
In June, the WTO said that the volume of merchandise trade shrank by 3 percent in the first quarter of 2020 compared to the same three months in 2019, adding that initial estimates for the second quarter, when the pandemic and its related lockdown measures affected a large share of the global population, indicate a year-on-year drop of about 18.5 percent.