Page last updated at 20:28 GMT, Thursday, 26 March 2009

Brown pushes $100bn global fund

Gordon Brown spoke about the global fund at a news conference in Brazil

UK Prime Minister Gordon Brown has called for a $100bn (£69bn) global fund to underwrite world trade as his pre-G20 summit tour continues in Brazil.

Mr Brown is on a three-continent trip ahead of next week's London summit.

He was speaking after holding talks with Brazil's President Luiz Inacio Lula da Silva.

Brazil's exports fell 25% in the past three months and the PM, who will also meet ex-football hero Socrates, urged the World Bank to provide trade credit.

Trade finance

In a joint statement, the two leaders called for measures to boost global economic demand and for action to protect emerging market economies from financial volatility.

Mr Brown argued that the credit crunch has led to a collapse in world trade, affecting economies of all sizes, and that support was needed to help rebuild it.

G20 LONDON SUMMIT
World leaders will meet next week in London to discuss measures to tackle the downturn. See our in-depth guide to the G20 summit.
The G20 countries are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the US and the EU.

In particular, he said levels of trade credit - which exporters and importer use to settle accounts - must be increased.

"I am going to ask the G20 summit next week to support a global expansion of trade finance of at least $100bn to help revive trade in all parts of the world," he said, while giving no specific details.

The prime minister also urged countries not to resort to protectionism and backed a new system to publicly highlight countries who bring in trade barriers.

The Brazil leg of Mr Brown's trip will also include talks with business leaders. The final part of the tour will be in Chile.

Russian dialogue

It also emerged that Mr Brown had spoken to Russian president Dmitriy Medvedev about the forthcoming G20 meeting.

The Kremlin said the two leaders had had a "constructive dialogue" about the summit and proposed reforms to institutions like the International Monetary Fund.

"Gordon Brown noted the harmony of the British and Russian positions on the majority of aspects of the preparation for the G20 summit," it said in a statement.

Brazil's president blames wealthy countries for the crash

But the Brazilian president warned the London summit must agree some concrete measures or the crisis would "deepen".

"If the G20 becomes a meeting just to set another meeting, we will be discredited," he said.

On his first visit to Brazil, Mr Brown is arguing it deserves a more prominent place at the global economic top table.

Like other developing countries, Brazil's trade has been severely affected in recent months as the credit which underwrites it has disappeared and the PM says the G20 should restore that credit.

'Decisive steps'

Mr Brown has urged leaders to "take action" at the G20 to reform the banking system, protect jobs and help the world's poorest countries, saying "doing nothing is no longer an option".

Business secretary Lord Mandelson - who is travelling with the prime minister - said the G20 summit cannot be expected to "transform" the global economic situation overnight.

But in a speech in Sao Paulo, he said he expected world leaders to take "decisive steps" in London to boost confidence, focusing on credit, bank regulation and stimulating economic demand.

Gordon and Sarah Brown
Gordon Brown will conclude his trip in Chile

And Foreign Office minister Lord Malloch-Brown, closely involved in preparations for the summit, said the G20 must signal to the public it is taking clear action in key areas.

"We can't again engage in meaningless, empty commitments which don't survive the flight home," he told Associated Press.

He added: "Incumbency is hell nowadays, just about every government is struggling with terrible opinion polls and very angry people."

Amid talk of rifts between nations over the best way to handle the crisis, the UK has insisted there is "far more agreement" among world leaders than is being portrayed.

Progress has been made, Mr Brown says, on getting tax havens to agree to share tax information while there had already been "the biggest fiscal stimulus in history" and big interest rate cuts.

He has said every country has its own timetable for announcing its fiscal and monetary policies and that this must remain a matter for individual governments.

He has played down comments made by Governor of the Bank of England Mervyn King, that the government should be cautious about a further fiscal stimulus, given the high levels of UK debt.

US President Barack Obama has said he wants a "robust" and "sustained" fiscal stimulus and has said all countries must share the burden of rescuing the global economy.



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