April 2 - The International Chamber of Commerce is urging the G20 nations to take action to fight protectionism and support trade finance to keep trade flowing.

Leaders of the G20 countries must coordinate their national policies to end the global recession, support a monitoring system to honour previous promises to reject protectionism, and restore trade financing to more normal levels, the ICC) has said.

ICC Chairman Victor K. Fung said. "The G20 summit in London provides the perfect opportunity for the international community to reassert its confidence in the multilateral trading system, which spurred the phenomenal economic growth of recent years and pulled hundreds of millions of people out of extreme poverty. At this time of world crisis we call on the G20 leaders to harness the political will to adopt policies ensuring job creation and long-term economic growth.

ICC said the need for a credible monitoring system to combat protectionism was underlined by a recent World Bank study showing that since the G20 Summit in Washington last November, 17 of the G20 countries have adopted 47 measures restricting trade. Increases in tariff and non-tariff barriers as well as discriminatory public procurement policies, for example, require careful monitoring.

"World trade depends heavily on trade credit, which has all but collapsed during the current financial crisis, effectively throttling the flow of goods," the ICC said after surveying 122 banks in 59 countries. A new survey by the ICC Banking Commission shows overall decreases of more than 40 percent in both trade credit volume and value.

Asia is suffering more than most, the ICC found: "Trade finance to and from emerging markets in Asia appear to have been particularly hard hit."

In all 470f banks reported a decrease in export letter of credit volume. Forty-three percent reported a decrease in the value. These drops came despite a move away from open account sales towards letters of credit.

"480f respondents indicated they had experienced an increase in demand for issuance of bank undertakings between the last quarter of 2007 and the last quarter of 2008, recognising the increased security sought by exporters for their shipments," the survey found.

Forcing banks to hold more capital has also contributed to the downturn, the report's authors claimed: "Many banks are facing tougher capital requirements for their trade assets. Evidence is therefore accumulating that the implementation of the new capital adequacy regime, at a time when the world is experiencing a global recession, has contributed to the drought of available finance."