Lamy sets up task force to study financial crisis

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New Delhi, Oct 14 : Worried that the fast-spreading financial crisis would soon have a direct impact on developing country’s access to financing of imports and exports, World Trade Organisation director-general Pascal Lamy on Tuesday has set up a task force to look into the effects of the liquidity crunch on the global trading system.

Asking all the 153 members of the WTO to continuously review the situation and “be ready to act as necessary”, Lamy said at the WTO general council meeting.

He added if there are indications of the financial situation having major implications on trade or the trading system, he would consult the chairman of the trade negotiations committee and see if a general council meeting under the WTO’s coherence mandate can be convened.

Taking a note of the initiative by the World Bank International Finance Corporation last week to increase its trade financing programme by $500 million, Lamy said despite this welcome move, he was concerned about the deterioration of financial landscape. Lamy said he has reconvened a meeting of the major providers of trade finance on November 12 to examine this issue and explore ways to alleviate the situation if it was to deteriorate.

According to agency reports, some of the prominent invitees to the meeting include International Monetary Fund managing director Dominique Strauss-Kahn, World Bank president Robert Zoellick as well as top officials from the trade financing majors like Royal Bank of Scotland , HSBC, Citigroup, JP Morgan, Commerzbank and from the development banks of Asia , Africa and Inter-America.

“One third of the world economy, mainly in emerging countries, still has a big growth potential and we must try and make sure that this engine can work through trade,” Lamy said. A meeting of the working group on trade, debt and finance at the end of November would follow up the November 12 meeting, he added.