ICC launches high-level advisory group to prime trade finance

Wednesday, 9 September 2020 00:00 - - {{hitsCtrl.values.hits}}

The International Chamber of Commerce (ICC), the institutional representative of 45 million businesses worldwide, has announced the creation of a new Advisory Group on Trade Finance (ATF) – a cross-sectoral coalition of leaders in global trade.

Fung Group Chairman

Victor Fung

The ATF – co-chaired by Victor K. Fung, Chairman of the Fung Group, and Marcus Wallenberg, Chair of SEB – will work to inform policy reforms and interventions to prime the trade credit ecosystem to power a rapid economic recovery from COVID-19.

Despite impressive early actions taken by commercial banks and public bodies in response to the initial phase of the crisis, reports suggest that the commercial trade financing market is showing signs of volatility – raising concerns as to its ability to finance a rebound in global trade in 2021.

On the launch of the Advisory Group, Fung said: “Trade finance is the critical enabler of international trade and key to the revival of the global economy and job creation post COVID-19. We intend to meet the trade finance challenge which has hit SMEs particularly hard to help build a new multilateral global economy that is more sustainable and inclusive.”

Trade finance underpins an estimated 80-90% of global trade flows, but its supply has proven highly vulnerable economic crises in recent decades. With up to $ 5 trillion in credit needed to restore trade to 2019 levels next year, ICC, the B20 and the World Trade Organization recently called for proactive measures to mitigate the risk of trade finance shortages deepening the economic crisis caused by the coronavirus pandemic.

In this context, the ATF will provide strategic insights and lead external engagement to:

Build awareness of the importance of trade financing to a post-pandemic recovery;

Inform interventions from governments and multilateral institutions to mitigate risks of short-term credit shortages affecting SMEs; and Provide thought leadership, data and strategic guidance to help bridge persistent trade financing gaps, particularly in emerging markets.

Regarding the objectives of the Advisory Group, Wallenberg added: “Rapid development in new technologies, a strong focus on sustainable supply chains in society and new regulatory requirements in the financial sector all present challenges and opportunities to the trade finance ecosystem. Trade finance providers, such as banks, need to collaborate to deliver new solutions to meet the needs and expectations of the community.”

In addition to the two co-chairs, members of the group will include: Anabel Gonzalez, Former Minister of Trade of Costa Rica and Senior Fellow at the Peterson Institute for International Economics; Amy Jadesimi, Chief Executive Officer of Lagos Deep Offshore Logistics Base (LADOL); Flora Mutahi, Chief Executive Officer of Melvin Marsh; Takeshi Niinami, President and Chief Executive Officer of Suntory Holdings; Samuel Palmisano, Chairman of the Center for Global Enterprise; Kevin Sneader, Global Managing Partner of McKinsey; Mark Tucker, Group Chairman of HSBC Holdings; Jeremy Weir, CEO, Trafigura; and Zhu Min, Chairman of the National Institute of Financial Research at Tsinghua University. ICC Secretary General, John W.H. Denton AO, also joins the ATF as an ex officio member. ICC Global is represented in Sri Lanka by ICC Sri Lanka.