Developing economies remain the drivers of international trade growth despite the ever-rising level of regulation in the wake of the financial crisis and a clear trade finance gap for small- and medium-sized enterprises (SMEs) in the southern hemisphere, says the ICC.
“Yet, the resilience and increasing importance of developing countries have become more evident,” according to the International Chamber of Commerce (ICC) 2013 survey on trade and finance, released on Monday.
The survey, titled ‘Rethinking Trade and Finance – An ICC Private Sector Development Perspective’ and released in Paris, says although developing country exports fluctuated throughout the year, they surpassed pre-crisis levels rising to 8.5 percent in 2012.
Trade facilitation programmes by multilateral development banks (MDB) also increased in 2012 according to the survey, which predicts the role of MDBs will become even more instrumental in supporting global recovery, economic development and poverty alleviation in future years.
It has found that a continued shortage of trade finance for international trade remains a major challenge for economic recovery and development, with many traders depending on overdraft and other corporate loans to finance exports and imports.
According to the survey, nodes of uncertainty over the US presidential election results, crises in the Middle East, and Sino-Japanese tensions all contributed to the lackluster pace of world trade which fell back to 3.8 percent growth in 2012, down from 6.1 percent the previous year.
Sluggishness in the Eurozone economy prompted weak global demand by midyear, as economies in China, India, Brazil and other emerging markets slowed down in turn.
The survey positively indicates that despite uneven performance around the world in 2012, the market for trade finance does show signs of slow and steady growth, with temporary trade measures imposed during the financial crisis – including the rise in fees for trade –slowly being removed.
The survey includes analysis of trade traffic data, from financial messaging service provider SWIFT, indicating that by the year 2020, a third of global trade will likely be South-South.
The data reveals a signature shift in the Asia-Pacific region where 73 percent of all export transactions took place in 2012 together with a rise of 2.32 percent in import traffic.
Providing a detailed statistical analysis of the regional and global trends in trade finance, Rethinking Trade and Finance 2013 received responses from representatives of 260 banks in 112 countries.
Expanded in scope, the 2013 Survey includes a new section on potential market developments, which includes the views of some of the world’s leading experts in global trade finance on the drivers and potential solutions to a more robust and resilient market.
The 2013 survey also received the participation of two new partners: the International Trade Centre (ITC), to cover credit constraints and non-tariff measures in trade; and Factors Chain International (FCI), providing business trends in factoring.
Rethinking Trade and Finance 2013 fulfils ICC’s commitment to bridge the information gap on trade finance through market intelligence reporting and monitoring that leads to a better understand and markets worldwide.
Source: UNB Connect
