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Trade costs remain high despite recovery talk-survey

Published 09/07/2009, 08:42 AM
Updated 09/07/2009, 08:45 AM

* Trade finance problems seen outlasting economic rebound * Export credit costs continue to rise GENEVA, Sept 7 (Reuters) - Trade finance remains hard to get and costly, suggesting the global recovery is still elusive, the International Chamber of Commerce (ICC) said on Monday.

After polling 122 banks in 59 countries, the ICC said there had been "no significant sign of relief in capital requirements for trade assets," meaning exporters continue to struggle in getting the loans they need.

"The costs of obtaining traditional trade finance products are still rising," the Paris-based group said in a statement about its survey, conducted in July and August.

"A recovery in demand for merchandise trade without a corresponding increase in the ability of banks to provide credit would risk a significant dislocation of trade, thus hampering the global recovery," it said.

Economists have warned the financial system needs to be healthy enough to support rebounding volumes of shipments from manufacturing hubs such as Asia, or else traders will be unable to keep pace with improved consumer sentiment. [ID:nLA340165]

The ICC appealed for more multilateral trade financing pledges, following the G20 decision earlier this year to support $250 billion worth of trade over two years. [ID:nL1230573] It also called for acute attention to the costs of doing business even as global gross domestic product starts to rebound.

"Despite an anticipated return to positive growth, problems relate to the availability of trade finance can be expected well into 2010," the report said. (Reporting by Laura MacInnis; editing by Chris Pizzey)

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