* WTO chief says global market for trade finance still tense
* Exporter lending costs stabilise in Brazil, India, China
* Africa, Asia, Latin America, Eastern Europe "need support"
(Adds findings from WTO/OECD report, new paras 12-17)
By Laura MacInnis
GENEVA, July 2 (Reuters) - Exporters are struggling to get the loans they need to ship their goods, the head of the World Trade Organisation said ahead of a high-level meeting on ways to bolster commercial flows from poor countries.
"Anecdotal evidence shows that the global market situation remains tense, with increased payment defaults and high costs of credit," WTO Director-General Pascal Lamy said in a report on protectionism whose main findings were made public on Thursday.
Interventions from the Brazilian, Indian and Chinese central banks and governments have stabilised trade finance costs that shot up during the credit crunch, Lamy said, estimating their local spreads are now 150-200 basis points above policy rates.
"In other areas of the world the situation has not improved," he said in the report, which will inform discussion at a July 6-7 WTO meeting involving the heads of major regional lenders and the World Bank and International Monetary Fund.
The African Development Bank has seen a 50 percent drop in trade finance deals since January 2009, and many Asian exporters rely on the Asian Development Bank and the World Bank's private sector arm "to facilitate their trade transactions due to the deterioration of the country risk," Lamy found.
"In Latin America, some of the smallest Central American countries, or larger but poor countries, also need support," he said, further noting that several eastern European countries currently have no access to new trade credit in the markets.
"Even in the United States, spreads on opening new letters of credit are up, at 100-200 basis points depending on the quality of risk," he said. "The WTO, along with partner institutions, will continue to monitor the market situation."
FREE TRADE SWEETENER
Lamy's protectionism report, his third review of barriers imposed in response to the world's economic slide, also raised questions about when G20 states and international lenders will disburse $250 billion in trade support they proposed in April.
"No specific indication of the utilisation of such a package is available yet," he said.
Aid for trade was promised to poorer nations at a 2005 WTO meeting in Hong Kong to help "to build the supply-side capacity and infrastructure they need to take advantage of trade opening and to connect with the global economy."
Diplomats say the funds are seen as a sweetener to encourage developing states to accept exposing their industries to more competition under a new global free trade accord, which has been under negotiation since 2001.
But a new report from the WTO and the Organisation for Economic Cooperation and Development stressed the credit crunch has made trade assistance even more critical for exporters who now cannot afford to upgrade crumbling infrastructure.
Investing in roads, ports, electrical grids and telecoms networks "seems to be the most effective way to reignite economic growth and reduce poverty," the study said.
"Aid for trade can have an immediate stimulus effect, averting the worst consequences of the downturn, while laying the groundwork for a more stimulating business environment."
Next week's meeting is not expected to yield new pledges from top donors like the United States, Japan and the European Union. Instead, WTO officials said, governments and multilateral lenders will discuss priorities for future investments.
India, Vietnam, Afghanistan and Iraq have received most aid for trade funds to date, and big regional projects are underway to speed up the passage of goods between African ports and along Central American and Southeast Asian roads.
"The longer the transit delays the higher are the costs of transport to users," the WTO and OECD explained.
Lamy's full 77-page report, a copy of which was obtained by Reuters on Wednesday, said the global economy was "fragile" and that goods trade would slump 10 percent in 2009. (Editing by Richard Balmforth)