The U.S. Administration under Congressional pressure to cut the trade deficit will urge Tokyo and Bonn to meet commitments to speed economic growth to stabilise currencies at Wednesdays meetings of leading industrial nations in Washington monetary sources said. The U.S. Will also try to develop proposals made at the 1986 Tokyo Summit for measures to ensure agreements such as the Paris Accord are more binding they said. Treasury Secretary James Bakers dual initiatives reflect U.S. Frustration with the two countries for not moving fast enough to curb their huge trade surpluses they added. Japanese Finance Minister Kiichi Miyazawa is expected to bring the outline of an economic stimulus package to the meeting which will be attended by West Germany France Britain Italy and Canada as well as the U.S. And Japan the sources said. The sooner the Japanese can announce their intention to announce a stimulative packagethe better it is for Japan and for the exchange markets in general one of the sources said. Treasury Secretary James Baker said the Paris Agreement in which West Germany and Japan made their commitments will be renewed by the industrial countries this week. Other U.S. Officials said a meeting of the Group of Seven will be a status report on progress Bonn and Tokyo have made setting up stimulus measures. The U.S. Will tell its partners that it expects a further substantial budget deficit reduction package to be agreed with Congress this year the sources said. Washington would like its economic partners to establish specific economic policy goals. Sharp deviations from the set objectives would trigger consultations among the countries on appropriate corrective action they added. The Paris accord envisaged surplus countries like Japan and West Germany stimulating domestic demand to absorb more imports and the U.S. Cutting its budget deficit thereby depressing its demand for imports. But the markets are signalling the dollars floor may be far below its level at the time the Paris agreement was struck the sources said. Monetary sources also said the dollars recent sharp fall against the yen reflected the U.S.-Japanese dispute over semi-conductor trade which resulted in U.S. Tariffs on certain Japanese electronic goods. One of the sources said the dispute has to some extent soured the atmosphere ahead of the meetings. Congressional sentiment for protectionist measures aimed particularly at Japan has strengthened the sources said.
U.S. TO PRESS FOR FASTER JAPANESE, GERMAN GROWTH