Federal Finance Minister Jim Flaherty and Robert Zoellick, World Bank group president Tuesday signed an agreement authorizing a US$200 million Canadian contribution to the International Finance Corp.’s Global Trade Liquidity Program.

Canada is the first country to officially participate in this new program, a World Bank-led initiative that brings together governments, international finance and development institutions, and private sector banks, and will support much-needed trade finance in developing countries.

“By keeping our fiscal house in order long before the global turmoil began, Canada has been recognized as being better placed than many countries to weather the global financial turbulence and worldwide recession,” said Flaherty, in a release.

“This Canadian support to the World Bank’s new trade finance program will help shore up global trade flows — a key element of global economic recovery,” Flaherty added.

“Supporting the Global Trade Liquidity Program will help get trade moving in developing economies, which is critical for a global turnaround that would benefit all countries,” said Zoellick. “Canada’s $200 million will have a multiplier effect by leveraging private sector resources for trade financing, and will help vulnerable countries, hard hit by the crisis, to get their goods to market.”

Canada originally announced the US$200-million contribution at the London G20 leaders’ summit in April. The funding is part of Canada’s commitment to provide additional resources to the World Bank and the International Monetary Fund to help build a more stable global financial system and strengthen the global economic recovery.

The signing coincided with Zoellick’s visit to Canada. He is also meeting with Prime Minister Stephen Harper, and other cabinet ministers.

IE