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Trade Finance
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A New Era of Professionalism in Trade Finance

What would you highlight as the key factors influencing your customers’ trade agenda this year?

I think the most important issue on treasurers’ and finance managers’ minds is the impact of continuing global economic uncertainty. No country is now removed from any other in terms of its economic prospects, and the effects of globalisation are nowhere more apparent than in trade. In 2011, world trade grew by just 5%, compared with growth of 13.8% in 2010 as the world’s economies rebounded from the 2008/9 global financial crisis. Although the total value of trade is now at an all-time high of $19.2tr, this is largely accounted for by higher commodity prices, whereas most countries are seeing more or less flat trading volumes (source: World Trade Organisation, April 2012).

Globalisation has meant that a trade transaction is rarely a simple exchange of goods between buyer and seller. Trade counterparties are often in different countries or regions, with intermediaries transferring goods between them. Not only are buyers and sellers of a finished product often geographically remote from each other, but the product itself will frequently be made up of components sourced from many different suppliers and locations, and will cross many borders during its manufacture, assembly, finishing and warehousing.