Brown, Lula propose massive trade fund

British Prime Minister Gordon Brown and Brazil's President Luiz Inacio Lula da Silva yesterday proposed creating a 100-billion-dollar global fund to spur on trade amid the world cash crunch.

"We need a transfusion into the world economy, and I'm going to ask the G20 summit next week to support a global expansion of trade finance of 100 billion dollars to help trade in all parts of the world," said Mr Brown.

Mr Brown, who will host the G20 meeting in London on April 2, arrived in Brasilia yesterday to meet with Mr Lula. Their working agenda was almost completely taken up by discussions of key issues for the G-20 summit aimed at finding ways forward amid the financial crisis.

The idea proposed by Mr Brown, with Mr Lula's backing, would be just one part of a global strategy. It was not immediately known how the fund would be structured or funded.

"It is absolutely vital, if we are to move forward from this recession, that world trade is resumed to the benefit of all importing and exporting countries. And the 100 billion dollars proposal is the minimum we need to kick start trade in the next month," Mr Brown argued.

"I welcome Brazil's commitment to play its part," Mr Brown said without offering details.

"Other donors, like multilateral development banks, private sector and export credit agencies, must also step up and play their part," Mr Brown added.

Mr Lula stepped in to support Mr Brown's message and warned that protectionist measures would only bring major risks.

"We have got to get investments flowing again, and above all the flow of trade," Mr Lula said. "That is why this proposal is so important."

"I usually compare trade protectionism with drugs," the Brazilian leader said. "While people look to drugs for immediate satisfaction, what follows is deep depression. With protectionism, it's the same thing."

Meanwhile US President Barack Obama will push new global financial regulatory standards at the upcoming G20 summit in London, US Treasury Secretary Timothy Geithner said in Washington.

Mr Obama will "underscore the imperative of raising standards across the globe and encouraging a race to the top rather than a race to the bottom," Mr Geithner told a congressional hearing.