Brazilian, British leaders propose trade fund

British Prime Minister Gordon Brown and Brazil's President Luiz Inacio Lula da Silva on Thursday proposed creating a 100-billion-dollar global fund to spur 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 Brown.

Brown, who will host the Group of 20 meeting in London on April 2, arrived in Brasilia Thursday to meet with Lula. Their working agenda was almost completely taken up by discussions of key issues for the summit of the world's largest industrialized and developing economies aimed at finding ways forward amid the financial crisis.

The fund idea proposed by Brown, with 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," Brown argued.

"I welcome Brazil's commitment to play its part," 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," Brown added.

Lula stepped in to support 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," 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."

Proposals from world leaders are acquiring more substance as the date for the London summit draws closer.

In Washington US Treasury Secretary Timothy Geithner said President Barack Obama would us the G20 to push for new global financial regulatory standards.

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," Geithner told a congressional hearing.

He indicated an international Financial Stability Forum would launch a "new initiative to address prudential supervision, tax havens, and money-laundering issues in weakly regulated jurisdictions."

Away from the talk about slumping markets and gummed-up credit, Brown took time off to visit Sao Paulo's Pacaembu Stadium and a recently opened museum of football.

There the prime minister, who lost sight in one eye playing rugby as a schoolboy, met Brazilian legend Socrates and kids involved in a football program funded by the British government.

Football is hugely popular in Britain, where Brown faces general elections by spring next year.