By Doug Palmer
WASHINGTON, March 11 (Reuters) - The United States is working with the World Bank and other countries to boost trade financing to help reverse a severe downturn in global trade, U.S. Treasury Secretary Timothy Geithner said on Wednesday.
World Bank President Robert Zoellick "has proposed some really quite creative ways to provide a quite substantial facility in place to help support trade finance," Geithner told reporters before heading to England for a meeting with other G20 finance ministers and central bankers.
"We'd like to support that effort," Geithner said.
That requires making sure national credit agencies, such as the U.S. Export-Import Bank and the Overseas Private Investment Corporation, are "moving very forcefully alongside" multilateral lenders to keep trade finance flowing, he said.
World trade is expect to fall in 2009 for the first time since 1982 as credit markets have dried up and consumer demand has slumped in response to the global economic turmoil.
The finance ministers meeting on Friday and Saturday sets the stage for a G20 leaders summit April 2 in London to discuss how to restore confidence and jump-start growth.
The Wall Street Journal reported on Wednesday the United States and Britain were working ahead of the leaders meeting on a global plan to provide several hundred billion dollars in trade financing to fight the sharp downturn in trade.
"I don't have any details on numbers now. But you're seeing, again, an unprecedented contraction in global trade ... So there's a very strong case in that context for governments providing some source for financing," Geithner said.
The U.S. Eximbank has already taken some steps to boost trade financing and is examining additional ways, including in coordination with other G20 credit agencies, to help keep trade flowing, Eximbank spokesman Phil Cogan said.
Senior Eximbank officials will be attending the G20 summit in London, Cogan added.
U.S. manufacturers welcomed the effort to boost trade financing and said they understood the plan was still in the development stage.
"But it's going to be multilateral and it will be using national as well as multilateral financial institutions," said Pat Mears, director of international commercial affairs at the National Association of Manufacturers.
"We haven't heard of companies who have actually lost deals over trade finance, but there certainly is a lot of constriction. Sales are being postponed because of just the length of time it takes to get financing," she said.
Meanwhile, the World Trade Organization is bringing together export credit agencies and private lenders next week for the second time in five months to discuss the issue.
(Reporting by Doug Palmer)