International trade is an important driver of productivity, jobs and development – but, to be effective, adequate trade finance is essential. Trade finance is a set of techniques or financial instruments used to mitigate the risks inherent in international trade to ensure payment to exporters while assuring the delivery of goods and services to importers. Trade finance includes loans and working capital facilities needed by exporters to process or manufacture products and by importers to buy inputs, raw materials and equipment. Insufficient trade finance increases the risks of the trade transaction (i.e. not receiving payment or delivery) and trade costs (i.e. opportunity costs of using scarce cash resources).
The World Trade Organization (WTO) estimates that trade finance plays a key role in facilitating and supporting as much as 80 to 90 percent of international trade. However, there exists a large gap in accessing to trade finance, especially in developing countries. In 2023, the Asian Development Bank estimated the global trade finance gap to be US$ 2.5 trillion, mainly in developing countries.
WTO and International Finance Corporation (IFC) in 2023 had launched the co-publication titled “Trade Finance in the Mekong Region” to underline how an expansion in trade finance could further increase the region’s participation in world trade. Presenting survey results from banks in the Mekong-3 countries — Cambodia, Lao People’s Democratic Republic and Viet Nam — the publication reveals the challenges faced by businesses in accessing credit and proposes strategies for improving local producers’ access to finance and integration into global supply chains.
Acknowledging the importance of accessing to finance, especially trade finance, Foreign Trade University (FTU), the only representative from Vietnam and one of 17 selected WTO Chairs for 2022-2026 period, will hold an international workshop, namely “Access to Finance, Including of Trade Finance” in 23rd February 2024. The representatives from WTO and IFC will present the co-publication on Trade Finance. A round table discussion with the representatives from WTO, IFC, FTU experts, Vietnamese government agencies will be followed to exchange the insights on how local firms can get access to finance, especially working capital and long-term capital to increase their competitiveness for furrther integration in the global value chains.
More information of the Workshop:
- Time: Friday, 23rd February, 2024
- Venue: Foreign Trade University, Hanoi
- Format: Offline and Online via Zoom
- Registration link: https://docs.google.com/forms/d/e/1FAIpQLScbTnUcFytQykN4YVoJfS7KjgvkRbQ5u1TCgloujLggtm8oWw/viewform
- RSVP: Lu Thi Thu Trang (L.LM.) Mobile: (+84)904484069 Email: ftu_wtochair@ftu.edu.vn
