World leaders are close to agreeing a package of $250 billion in financing to support global trade flows, a source at the G20 summit in London told Reuters on Thursday.
But analysts said the countries must act quickly to help unblock trade, which has slowed since a financial crisis damaged consumer confidence and restricted access to credit.
“The leaders are close to agreement that they will insure availability of at least $250 billion over the next two years to support trade finance through export credit and investment agencies and through multi-lateral development banks,” the source said, speaking on condition of anonymity.
Officials said the sum referred to guarantees that would most probably be issued under trade schemes to importers and exporters rather than the cost to governments of the schemes.
Summit officials said the $250 billion would include an earlier pledge by World Bank President Robert Zoellick to create a trade financing programme worth $50 billion.
British Prime Minister Gordon Brown had reported before the summit a trade finance deal worth $100 billion. The European Union’s trade chief said on Wednesday the amount needed was in reality about 230 billion euros ($304 billion).
Analysts said any increase in trade would depend on how fast the money would be made available.
“The key now is implementation. G20 governments must act quickly to provide this finance to companies that need it urgently,” said Eoin O’Malley, senior adviser on international trade at BusinessEurope, Europe’s top business group.
“The measure also needs to be part of wider package to avoid protectionism and conclude the Doha round which will stimulate trade growth. The key point now is to move forward with Doha.”