REPORT OF THE WORKING GROUP ON TRADE, DEBT AND FINANCE (2014)

TO THE GENERAL COUNCIL

1. The Working Group held two meetings, on 13 June and 11 November 2014, under the Chairmanship of H.E. Bertrand de Crombrugghe (Belgium). At the meeting on 13 June 2014, the Working Group discussed how to proceed with the priorities set out by Members in the context of the preparations for the 9^th Ministerial Conference, that is: to continue exchanging views on the relationship between exchange rates and trade, in particular with a view to strengthen the coherence between the IMF and WTO; and to continue exchanging views on trade finance in relation to market developments and internationally agreed initiatives to improve the availability of trade finance in developing countries. With respect to exchange rates and trade, Brazil had tabled a submission (WT/WGTDF/W/73) in early June making proposals on how to push the agenda forward. In the discussion, Members have expressed their readiness to examine Brazil's submission in depth, but did not have sufficient time to consult with capitals. Members agreed to revert to it at the following meeting. Regarding trade finance, there was general support for Australia's proposal to commission a factual paper to the Secretariat on the remaining financing gaps in developing countries. This paper would also be discussed at the following meeting. Finally, some Members expressed an interest in reviving the "the debt pillar" of the Working Group. Other delegations wondered whether the interested delegations could be more specific about the nature and extent of the issue and what work, if any, could usefully be undertaken in the WTO. To help stimulate the thinking, the Secretariat re-circulated the 2002 concept note on the relationship between trade and debt, and flagged new statistics.

2. At the meeting on 11 November 2014 Members reverted to Brazil's submission on the relationship between exchange rates and trade. After careful consideration by Members of the three proposals made in document WT/WGTDF/W/73, the Chairman concluded on the following: (a) regarding proposal 1, there was general support for the continuation of the on-going dialogue with the IMF; Members did not wish to prescribe the content of such dialogue, which generally aimed at being better informed and at acquiring a more thorough understanding of IMF policies with respect to exchange rates (b) there was no consensus to move forward on proposal 2, i.e. to commission a discussion paper to be jointly drafted by the WTO secretariat, the IMF and the World Bank, on how the coherence mandate was implemented in the area of exchange rates and trade (c) on proposal 3, there was a consensus to commission a factual note to the Secretariat on the instances in which Article II.6 of the GATT/WTO has been invoked in the past. Members issued a strong note of caution, emphasizing the factual and historical character of that note, which should neither venture into analysis nor affect their right and obligations under the current agreements. Members examined the Secretariat background note on the remaining gaps in trade finance in developing countries (WT/WGTDF/W/74). The note received overall strong support, notably regarding to the need for the WTO, including its Director-General, to continue its diagnosis, advisory and advocacy role on the availability of trade finance in developing countries in partnerships with the IMF, the World Bank and multilateral development banks. It was also agreed that a seminar on the challenges faced by trade finance would be held in the spring of 2015, possibly back-to-back with the meeting of the Director-General's Expert Group. Finally, in regard of the relationship between trade and debt, while the proponents were not immediately in a position to present a submission, it was made clear that this pillar of the Working Group's mandate was still valid and relevant to the Group's work.

3. On November 21, 2014, the Working Group adopted its Annual Report (2014) to the General Council.

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