BRASILIA (Reuters) - Prime Minister Gordon Brown urged the G20 on Thursday to back a $100 billion (69 billion pound) expansion of trade finance to reverse a fall in exports and, with his Brazilian counterpart, called for a global trade agreement.
“I‘m going to ask the G20 summit next week to support a global expansion of trade finance to reverse a slide in world trade,” Brown told a news conference after meeting Brazil’s President Luiz Inacio Lula da Silva.
Lula and Brown said countries should adopt more fiscal and monetary stimulus to help combat the global economic crisis and called for tougher financial market regulations.
A shortage of trade financing has contributed to a sharp drop in global trade that is exacerbating the economic crisis.
Trade officials estimate the funding gap for developing countries in trade finance could be as high as $300 billion.
In a later speech at a business school in Sao Paulo, Brown said governments, regional development banks, the private sector and domestic export credit agencies could help fill the gap, suggesting the creation of a “reusable pool of finance of around $100 billion.”
A British official said one idea being looked at was to have the World Bank oversee this trade financing fund.
Leading industrial and developing nations, including Brazil, will attend the G20 summit Brown hosts in London on April 2.
Lula, speaking at a joint press conference with Brown, highlighted the dangers of inaction at the G20.
“If the G20 becomes a meeting just to set another meeting, we’ll be discredited and the crisis can deepen,” Lula said.
“We must not let the crisis drag on as long as the Japanese crisis did,” he said, in reference to a decade of stagnation in the Asian country.
Lula and Brown called in a joint statement for “an early and comprehensive resolution of the Doha Development Round on the basis of the significant results achieved so far.”
Washington has complained the current Doha proposals fail to spell out the export opportunities they would create for the United States. It wants to revise a partial agreement reached in the World Trade Organisation last July.
Brown said the international community should monitor the compliance of trade agreements and single out any violators.
“We must name and make public those countries that break agreements they have made, that they be monitored by the World Trade Organisation and abide by its rules,” Brown said.
Brown is on the third stop of a tour through Europe, United States and Latin America to seek support for the G20 meeting that will discuss ways to tackle the global financial crisis.
Lula and Brown said in the joint statement that the G20 meeting was a vital opportunity to take international action required to “restore global demand through concerted and coordinated fiscal and monetary policy action.”
Some European leaders have opposed U.S. President Barack Obama’s calls to agree to larger stimulus packages at the G20 meeting.
Brown and Lula want the G20 to implement fundamental reforms of the international financial system and its regulations.
Britain strongly supports Brazil’s bid to become a permanent member of the U.N. Security Council, Brown said.
Lula has been one of the most outspoken advocates of giving developing countries more say in multilateral organizations like the International Monetary Fund.
Asked to explain his comment that the international crisis had been caused and fomented by “white people with blue eyes,” Lula said he had no ideological bias. But poor people were the first to suffer from the crisis, he said.
Lula has often blamed the United States for causing a global crisis by practicing “casino capitalism.”
Writing by Raymond Colitt; Editing by Bill Trott and Andre Grenon