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INDIA RELAXES RULES FOR EXPORT PROMOTION The Reserve Bank of India , RBI , announced new rules to allow exporters of 25 products to use foreign exchange up to 10 pct of their firm ' s total annual export earnings for export promotion abroad . The move is designed by the government to improve India ' s trade deficit . Products eligible for the new Blanket Exchange Permit Scheme include tea bags , cigarettes , coffee , leather , various textiles , chemicals , pharmaceuticals , plastics , engineering and electronic goods , ready - made garments , processed food , sports goods , fabricated mica and consultancy services . The scheme replaces current rules which allow different amounts of foreign exchange to be used only when firms attain a minimum annual turnover prescribed for each product . RBI said under the new rule , 16 other products will qualify , on a discretionary basis , for overseas promotional spending of not more than two pct of the freight - on - board value of annual export earnings . These include oil cakes , cereals , raw cotton , raw and semi - processed leather , gems , castor and sandalwood oil , psyllium husks and seeds , opium and various mineral ores . RBI said exporters of products not covered by either of the two groups will be eligible to use up to five pct of their freight - on - board value of their annual export earnings . Industry sources said the new entitlements , considerably higher than the previous limits , are also more flexible because holders of new permits no longer need to frequently apply to RBI for release of foreign exchange for export purposes .

zulchzulu SAYS CRITICISM NOT " ONE - WAY STREET " Finance Minister Gerhard Stoltenberg said he was surprised by recent criticism of West German economic policies voiced by U . S . Treasury Secretary James Baker but added that the criticism was not purely one - sided . Stoltenberg told the West German Trade and Industry Association ( zulchzulu ) that before a meeting with Baker on Monday , " There had been surprising notes of criticism ( from the United States zulchzulu He added . " Criticism is not a one - way street zulchzulu He did not elaborate , but Bonn has often called on the U . S . To reduce its federal budget deficit . Over the weekend Baker had criticised West German economic policies , saying that rises in domestic interest rates here were not in the spirit of last February ' s Louvre pact to stabilise currencies . Stoltenberg told the zulchzulu that his meeting on Monday with Baker had resolved differences between the two countries . At a news conference earlier on Tuesday Stoltenberg had declined to comment specifically on Baker ' s criticisms , but he had said that after three hours of discussions on Monday , " one remark or another has been clarified zulchzulu

GERMAN BANKERS ' REMARKS REVIVE TALK OF RATE CUT Remarks by two leading central bankers sparked renewed speculation in financial markets that a cut in the West German three pct discount rate may be under discussion , currency dealers said . Bundesbank board member Claus Koehler said in a speech that monetary growth resulting from speculative capital inflows required cuts in interest rates . Separately , West Berlin state central bank president Dieter Hiss told journalists that the discount rate could fall below its lowest ever point of 2 . 75 pct . He made clear that he was not making a forecast on interest rates , however . Currency dealers here and in the Far East said the dollar gained slight background support from the speculation . But German dealers noted that the Bundesbank kept the 3 . 80 pct rate unchanged at which it offered liquidity to the money market this week , dashing some expectations that it may either offer lower fixed rate money or offer a reduced minimum rate and let the strength of banks ' demands set the allocation rate . It allocated 6 . 1 billion marks in new liquidity , much less than the 14 . 9 billion leaving the market as a prior pact expired . This further weakened sentiment the Bundesbank could move to a more accommodative monetary stance , dealers said . Koehler said in a speech in Surrey , England , speculative capital inflows may cause monetary growth , regardless of whether central banks intervened or exchange rates fell . " In other words , the monetary policy measures required are different from -- and sometimes diametrically opposed to -- those needed when the money stock is increasing as a result of mounting economic activity zulchzulu Though Koehler was known to be the most liberal of the generally monetarist Bundesbank board , his comments marked the first time cuts in rates had been concretely suggested as a counterpoint to overly strong monetary growth , dealers said . REUTER ^ M

zulchzulu SEES NO CHANGE IN MONETARY COURSE The Bundesbank sees no current reason to change monetary course , vice - president Helmut Schlesinger told Reuters in a telephone interview . Schlesinger was responding to questions following remarks yesterday by Bundesbank board member Claus Koehler and West Berlin state central bank president Dieter Hiss , which , dealers said , revived some speculation that German interest rate cuts may once again be under discussion . Schlesinger said he had no comment on the remarks of his two central bank council colleagues . But he added that the last central bank council meeting on April 2 had discussed the economic situation with a mood of " subdued optimism zulchzulu particularly influenced by the news brought by several state central bank presidents . " Much is going better than the impression gained by the public from the January figures , which have been in the meantime superseded zulchzulu he said . German January industrial output fell 3 . 0 pct after a decline of 0 . 9 pct in December . New industry orders fell 1 . 9 pct after they had been unchanged in December . Bank economists said that the two together showed the economy would either stagnate or contract in the first quarter of 1987 . Aside from the economic developments , Schlesinger added , a steady monetary course was important to hold the dollar / mark rate around current levels as Bundesbank president Karl Otto Poehl had said while attending the Washington World Bank / IMF meeting . Asked , however , if the Bundesbank could move to cut rates on repurchase agreements at the setting of the next repurchase tender , due next Tuesday , Schlesinger said , " Since the central bank council gives its opinion on this theme only every 14 days , this is hardly probable zulchzulu Responding to the question whether the Bundesbank had moved away from a policy of targetting monetary growth toward one of targetting currency rates , Schlesinger said he could have no comment on the subject while negotiations were still

zulchzulu LOOKS SET FOR EIGHT MORE YEARS AT zulchzulu For currency dealers Karl Otto Poehl is the scourge of speculators , for bankers he is the man who has played a key role in shaping the world ' s financial destiny for the last seven years , and for Germans he is the guardian of the mark . President of the powerful and independent West German central bank , the Bundesbank , Poehl is likely to have his contract renewed for another eight years when it expires at the end of this year , government officials say . ( Index of economic spotlights , see page ECRA ) But no official announcement has yet been made , raising eyebrows in West Germany ' s business community . The ebullient Poehl spent seven years in Bonn in top ministerial posts under the Social Democrats , now in opposition , before he moved to the Bundesbank . There has been speculation that Chancellor Helmut Kohl would try to replace Poehl with a man closer to his own Christian Democrats . But officials noted that Poehl has worked closely and successfully with Finance Minister Gerhard Stoltenberg since Kohl ' s government took office in 1982 . Poehl , the most senior central banker apart from Paul Volcker of the United States , enjoys a strong international reputation which it would take a newcomer years to build up . Given these circumstances , Kohl will probably overlook Poehl ' s past as an adviser to former Social Democrat Chancellor Willy Brandt , and top aide to Helmut Schmidt when he was Finance Minister , bankers said . It was Schmidt who , as Chancellor , appointed Poehl to his present job in 1980 . In recent months , with the mark ' s strong rise against the dollar , Poehl has made exchange rates the central concern of the Bundesbank ' s council , a highly conservative institution which has doggedly pursued monetary policies to prevent inflation catching hold . Older Germans can remember two bouts of galloping inflation this century . But with

zulchzulu CREDIT POLICY CHANGES UNLIKELY The Bundesbank is unlikely to change credit policies when its central bank council meets on Thursday for its last session before the Venice summit , banking economists and money market dealers said . The Bundesbank steered money market rates lower last month by cutting the rate on its security repurchase pacts , and is unlikely to cap this move with a cut in leading interest rates in the near future , they said . The council will meet in Saarbruecken , and the meeting will be followed by a news conference at around 1030 GMT . But Bundesbank officials noted that a news conference was usually called when the council meets outside Frankfurt , and did not necessarily herald any policy moves . Bundesbank Vice - President Helmut Schlesinger said today there was no reason to cut interest rates because money supply growth had shown no signs of slowing in May and the dollar was stable against the mark . Schlesinger told Reuters in Tokyo , where the Bundesbank has opened a representative office , that the West German economy was now picking up after contracting by a seasonally adjusted 1 / 2 to one pct in the first quarter . Money market dealers said call money was likely to hold in a 3 . 50 / 70 pct range for most of this month , after the Bundesbank switched last month to tenders by interest rate at a minimum bid rate of 3 . 50 pct , allocating funds at 3 . 55 pct . " They have set this signal and indicated they could maybe lower market rates even further , but not with the discount or Lombard zulchzulu Winfried zulchzulu , chief economist of Schroeder , zulchzulu , Hengst Investment GmbH said . Werner zulchzulu , managing partner at Bethmann Bank , said German rates were among the lowest in industrial countries and around historical lows for West Germany . A further cut in rates would have little impact on the economy as banks are in any case reporting slack credit demand

KUWAITI DINAR RATES FIRM , AID WINDOW OPEN Interest rates on Kuwaiti dinar deposits held firm in scattered trading despite a Central Bank decision to revive limited funding lines , dealers said . The Central Bank , which last Tuesday shut a daily aid window through which it lent funds of up to one year , reopened the facility for three month money , which was available at seven pct , they said . It offered one month funds at seven pct through swap facilities , dealers said . Today ' s Central Bank action , combined with sales of dollars by some banks , helped ease a recent credit squeeze engineered by the monetary authority to stem a rush for the U . S . Currency arising from attractive U . S . Interest rates and Gulf tension , dealers said . However , as one dealer noted : " The market is still unsettled zulchzulu Overnight funds , bid at 20 pct at the outset of business , traded up to 30 pct before easing as liquidity dragged offers down to 10 pct by the close . Tomorrow - next , for which buy / sell quotes started at 30 , 20 pct , ended at 14 , eight . Spot - next was indicated at 8 - 1 / 2 , seven after opening bids of 10 . Dealers quoted one - week at eight , seven against an early 9 - 1 / 2 , 7 - 1 / 2 . One month rates were at the same level after trade at eight then 8 - 1 / 2 . Dealers quoted three months at seven , 6 - 3 / 4 pct and six - month to one year funds at seven , six pct . They reported offshore offers of overnight at 10 , tomorrow - next at eight and one year at 6 - 1 / 2 pct towards the close . The Central Bank fixed its dinar exchange rate steady at 0 . zulchzulu / 67 to the dollar , against yesterday

FED EXPECTED TO SET CUSTOMER zulchzulu The Federal Reserve is expected to add reserves to the U . S . banking system by arranging a round of customer repurchase agreements during this morning ' s intervention period , several economists said . Some others , however , judged that the Fed has almost completed its reserve - adding requirement for the statement period ending on Wednesday and will not need to operate today . Fed funds were trading at 6 - 11 / 16 pct , compared with Friday ' s average of 6 . 63 pct .

ZAMBIA CUTS PRICES AS TROOPS PATROL zulchzulu The Zambian government today announced minor price cuts for essential commodities as part of its new economic strategy , while police and troops patrolled the northern Copperbelt to prevent any outbreaks of rioting . However , staple foods , such as bread , sugar and maize meal , were not affected by the cuts and many people said this could provoke trouble from disgruntled elements who had expected more sweeping reductions . Observers in the capital expressed disillusionment with the small extent of the price cuts , which ranged up to 10 pct on items such as blankets , soap , detergents and baby food . Residents in the Copperbelt contacted by telephone said government forces had set up roadblocks around the main towns . In Lusaka , business went on as usual and there was no sign of troops or police reinforcements on the streets . President Kaunda had ordered the price reductions to take account of lower import costs following the revaluation of the kwacha to a fixed rate of eight per dlr from 21 on May 1 . The revaluation formed part of a new go - it - alone economic strategy which Kaunda adopted to replace Zambia ' s IMF austerity program . Labour leaders in the Copperbelt said last week gangs of unemployed youths were being formed in the politically volatile region to take action against shops that did not reduce their prices after today ' s deadline . Fifteen people were killed in the Copperbelt during food riots last December after the government tried to lift maize subsidies .

G - 7 ISSUES STATEMENT AFTER MEETING Following is the text of a statement by the Group of Seven -- the U . S zulchzulu Japan , West Germany , France , Britain , Italy and Canada -- issued after a Washington meeting yesterday . 1 . The finance ministers and central bank governors of seven major industrial countries met today . They continued the process of multilateral surveillance of their economies pursuant to the arrangements for strengthened economic policy coordination agreed at the 1986 Tokyo summit of their heads of state or government . The managing director of the International Monetary Fund also participated in the meeting . 2 . The ministers and governors reaffirmed the commitment to the cooperative approach agreed at the recent Paris meeting , and noted the progress achieved in implementing the undertakings embodied in the Louvre Agreement . They agreed , however , that further actions will be essential to resist rising protectionist pressures , sustain global economic expansion , and reduce trade imbalances . In this connection they welcomed the proposals just announced by the governing Liberal Democratic Party in Japan for extraordinary and urgent measures to stimulate Japan ' s economy through early implementation of a large supplementary budget exceeding those of previous years , as well as unprecedented front - end loading of public works expenditures . The government of Japan reaffirmed its intention to further open up its domestic markets to foreign goods and services . 3 . The ministers and governors reaffirmed the view that around current levels their currencies are within ranges broadly consistent with economic fundamentals and the basic policy intentions outlined at the Louvre meeting . In that connection they welcomed the strong implementation of the Louvre Agreement . They concluded that present and prospective progress in implementing the policy undertakings at the Louvre and in this statement provided a basis for continuing close cooperation to foster the stability of exchange rates .

ITALIAN BALANCE OF PAYMENTS IN DEFICIT IN MAY Italy ' s overall balance of payments showed a deficit of 3 , 211 billion lire in May compared with a surplus of 2 , 040 billion in April , provisional Bank of Italy figures show . The May deficit compares with a surplus of 1 , 555 billion lire in the corresponding month of 1986 . For the first five months of 1987 , the overall balance of payments showed a surplus of 299 billion lire against a deficit of 2 , 854 billion in the corresponding 1986 period .

U . S . TAKES TOUGH STAND ON GATT FARM ISSUES The United States is prepared to " pull out all the stops " to defend its agricultural trade rights under the General Agreement on Tariffs and Trade ( GATT zulchzulu U . S . Ambassador to GATT Michael Samuels said . Those rights are now being challenged by the European Community ' s ( EC ) agricultural support policies , he told a conference sponsored by the American Soybean Association . He reiterated Washington ' s firm intention to retaliate if the EC goes ahead and bans imports of hormone - fed beef without the issue being investigated by a GATT special committee . The U . S . claims the EC directive , due to come into effect on January 1 , threatens to cut 100 mln dlrs worth of U . S . meat shipments into the EC . The U . S . also will oppose all EC efforts to impair U . S . trade via the EC oilseeds regime , which supports EC oilseed prices over the current market level and which may be extended to include a hotly disputed oils and fats tax , Samuels said . Reduction of trade - distorting world agricultural subsidies , an aim of most key participants in GATT multilateral trade negotiations , " is meaningless if import barriers continue to be erected zulchzulu Samuels said . Samuels called the U . S . plan to eliminate world farm subsidies by the year 2000 , proposed at GATT in July , " visionary " and " very serious zulchzulu The EC and Japan have said it is unrealistic . The EC Commission this month announced its draft proposal on farm trade reform , expected to be tabled at GATT formally next week . The EC scheme involves emergency measures to reduce tensions in troubled surplus sectors of cereals and cereals substitutes , dairy and sugar . It also calls for reduction of farm subsidies . The U . S . Is not opposed to short - term measures

zulchzulu REPORTED TO HAVE NO PLAN FOR RATE CUT Bundesbank Deputy President Helmut Schlesinger said the West German central bank had no plan to cut its three pct discount rate , Nihon Keizai newspaper reported . The financial daily quoted Schlesinger as saying in an interview that the bank would try to maintain current interest rate levels for the time being . He also told the newspaper he saw no need for large - scale intervention in the foreign exchange market because exchange rates are stable . Earlier , Schlesinger told a press conference that the Bundesbank would continue its policy of maintaining short - term interest rates at a low level for currency stability . He also said he was satisfied with the current dollar / mark exchange rate but added that he was not certain if it was ideal for the West German economy .

JAPAN TRADE SURPLUS WILL GROW AGAIN IN 1987 , OECD Japan ' s trade surplus is likely to continue to grow in 1987 , as sales of Japanese goods abroad increase while domestic demand remains sluggish , the Organization for Economic Cooperation and Development ( OECD ) said . In its latest half - yearly review of the world economy , the OECD said Japan managed to considerably reduce its surplus last year , when domestic demand grew by four pct in 1986 while export markets rose by only two pct . But it said this differential between the growth of domestic and foreign demand would reverse in 1987 and 1988 , " thus weakening the international adjustment process zulchzulu It forecast a slowing in domestic growth to little over two pct but with a rise in exports of 3 . 3 pct in 1987 and 3 . 6 pct in 1988 . As a result , the current account surplus in 1987 will rise to 95 billion dlrs from 86 billion in 1986 , although in 1988 it should fall back to 87 billion dlrs . The OECD outlook did not take account of the 6 , 000 billion yen package announced last month to stimulate domestic demand and increase imports to Japan . However , OECD officials said the measures will significantly strengthen domestic demand , quite possibly exceeding one pct GNP when the full effects have worked through , and thus will provide some stimulus to imports . The OECD outlook said , " Continued large current account surpluses and the further build - up of an already - substantial net external asset position could well lead to upward pressure on the yen zulchzulu It said that further appreciation could then lead manufacturers to postpone their investment plans and thus weaken domestic growth . The OECD said Japan ' s Gross National Product was likely to gorw an annual two pct in 1987 and 1988 , below 1986 ' s 2 . 5 pct growth . But it said Japan would continue its good performance on inflation

zulchzulu BALANCE OF PAYMENTS IN DEFICIT IN MAY Italy ' s overall balance of payments showed a deficit of 3 , 211 billion lire in May compared with a surplus of 2 , 040 billion in April , provisional Bank of Italy figures show . The May deficit compares with a surplus of 1 , 555 billion lire in the corresponding month of 1986 . For the first five months of 1987 , the overall balance of payments showed a surplus of 299 billion lire against a deficit of 2 , 854 billion in the corresponding 1986 period .

JAPANESE TARIFFS SEEN AS WORLDWIDE WARNING The tough trade sanctions President Reagan imposed on Japanese exports are not only a shot across Japan ' s bow but also a sign Reagan will attack unfair trade practices worldwide , U . S . officials said . But Robert Crandall , a trade specialist at Brookings Institution , a think tank , said " a shot across their bow can often result in a shot in our stern zulchzulu He said it left the United States open to retaliation . The U . S . officials said the 100 pct tariffs Reagan ordered on 300 mln dlrs worth of Japanese goods will also show Congress that a tough pro - trade stand can be taken under existing laws , and no new protectionist legislation is needed . In the past year tough trade action had been taken against the European Community over corn and sorghum , Taiwan over beer and wine , South Korea over counterfeiting of copyrights , patents and zulchzulu and Japan on tobacco . White House spokesman Marlin Fitzwater told reporters the tariffs - up from five pct - should be seen as a " serious signal " to other nations on the need for fair trade practices . Reagan said he imposed the sanctions on certain computers , television sets and some hand tools because Japan did not honor an agreement to end dumping semiconductors in world markets at less than cost and to open its markets to U . S . products . The tariffs were placed on items which were available from other sources so there would be little effect on the American consumer , Fitzwater said . Reagan has come under heavy pressure to take tougher action - especially against Japan - to end global unfair trade practices and reverse the growing U . S . trade deficit . The alternative was that if he did not , Congress would . The U . S . trade gap last year was a record 169 . 8 billion dlrs , and continues to rise , with

CURRENCY MOVES MAY BE HURTING WORLD TRADE Japanese trade figures are seriously challenging the entrenched view of policy makers of the Group of Seven industrialised nations that relative currency rates are the key to smoothing world trade problems . Senior Japanese , U . S . And European officials in Tokyo say they are at a loss to fully explain the data , for if currencies are the key they ask , why then are are U . S . Exports to Japan shrinking ? What if manipulating currencies and driving the dollar down made world trade problems worse rather than solving them , fulfilling Federal Reserve chairman Paul Volcker ' s forecast of world trade recession ? U . S zulchzulu Japan trade has declined even after a 40 pct dollar fall against the yen since the September 1985 Group of Five pact in New York . The lower dollar ought to have made U . S . Exports 40 pct more competitive in Japan . The officials , most of them economists , can offer no objective reason why they are not . Worse , how are European Community sales to Japan rising rapidly when the European Currency Unit has until now declined only 11 pct against the yen zulchzulu Last week ' s G - 7 meeting in Washington has been widely interpreted as a sign from the policy makers that the dollar must go lower . So worst of all , what if Volcker is correct ? At a loss to give an objective explanation , officials can only offer explanations which tend to be highly subjective . " I don ' t know and I don ' t think anyone knows zulchzulu said Hugh Richardson , acting head of the EC delegation in Tokyo . " What I do know is that Community exporters are making a hell of an effort in this market . If you make an effort , there is money to be made in Japan zulchzulu he added . But U . S . Officials and businessmen are convinced low U

SAUDI RATES RISE AS BAHRAIN BANKS CAUGHT SHORT Saudi riyal interest rates rose as Bahrain - based banks scrambled to cover short positions , dealers said . Several Bahrain banks had been lending in the fixed periods and borrowing in the short dates , but today they found the day - to - day money in short supply , dealers said . " Everybody ' s stuck in the spot - next zulchzulu one trader said . Spot - next rose to as high as 6 - 1 / 4 , six pct from 5 - 1 / 4 , five pct yesterday , and the borrowing interest spilled over into the periods , with one month rising to around 6 - 3 / 16 , 5 - 15 / 16 pct from 5 - 15 / 16 , 7 / 8 pct yesterday . Three months edged up to around 6 - 9 / 16 , 5 / 16 pct from 6 - 7 / 16 , 1 / 4 pct , while six months was quoted a touch firmer by some banks at seven , 6 - 3 / 4 pct . Commercial banks quoted the spot riyal at 3 . 7500 / 04 to the dollar after 3 . 7507 / 09 yesterday .

SOVIETS OUTLINE 1988 ECONOMIC TARGETS The Soviet Union outlined its economic targets for 1988 on Monday , stressing the need to improve standards in the country ' s sluggish engineering industry . Planning chief Nikolai zulchzulu told the Supreme Soviet industrial output should rise by 4 . 5 pct in 1988 , up from a planned 4 . 4 pct in 1987 . It rose 3 . 6 pct in Jan - Sept 1987 . zulchzulu said national income , the nearest Soviet equivalent to gross national product , should rise by 4 . 3 pct against a planned 4 . 1 pct this year . Gross national product measures the output of a country ' s goods and services . He said the Kremlin planned to produce 235 mln tonnes of grain in 1988 versus a planned 232 mln this year . Moscow produced 210 mln tonnes in 1986 . Kremlin leader Mikhail Gorbachev has described machine - builing as a sector whose rapid modernization is essential if the Soviet Union is to compete effectively on world markets . " Certain difficulties have arisen this year in the machine - building industry . The economy is not receiving a considerable amount of the equipment that it requires zulchzulu said zulchzulu , who heads the state planning committee zulchzulu . Soviet data show the machine - building industry , which makes machine tools , instruments and other engineering goods , increased output by 3 . 3 pct in the first nine months of 1987 compared with the same period last year . However , this was far below the 7 . 3 pct increase planned for the industry for the whole of 1988 . zulchzulu said the ruling Politburo had concluded at a recent meeting that an improvement in economic performance depended to a large extent on conserving resources better . " Large - scale measures are planned to save resources zulchzulu he said . Finance Minister Boris Gostev told the Supreme Soviet that defense spending in 1988 would total 32 billion dlrs , the same figure as was announced

ITALY DEFICIT NOT DUE TO LIBERALIZATION - MINISTER Italy ' s Foreign Trade Minister Mario zulchzulu , commenting on speculation in the Italian press , said a sharp balance of payments deficit in May could not be attributed to recent moves liberalizing the purchase of foreign securities . zulchzulu was reacting to suggestions that last month ' s overall 3 , 211 billion lire deficit , which compares with April ' s 2 , 040 billion surplus , could be linked to a May 13 decree abolishing obligatory non - interest - bearing deposits on foreign securities purchases . " The deficit can be better attributed to premature and delayed foreign trade payments and receipts ( leads and lags ) rather than capital outflow to portfolio investment zulchzulu zulchzulu said in a statement . Earlier today the newspaper La Repubblica cited remarks by the Bank of Italy , which announced the deficit for May and said it had been partly caused by " non - banking capital outflows zulchzulu " In practice , it seems that there has been a constant flow of capital to foreign securities or investments outside our borders zulchzulu said the newspaper . But the newspaper added that it was still not possible to say how far the move to abolish foreign securities purchase deposits had affected Italy ' s balance of payments .

BONN MINISTRY HAS NO COMMENT ON BAKER REMARKS The West German Finance Ministry declined to comment on weekend criticism by U . S . Treasury Secretary James Baker of recent West German interest rate increases . Baker said the U . S . Would re - examine the February Louvre Accord to stabilise currencies reached by leading industrial democracies . The rise in West Germany short term interest rates was not in the spirit of an agreement by these nations in Washington , which reaffirmed the Louvre pact , he said . A Finance Ministry spokesman , asked for an official ministry reaction to Baker ' s remarks , said he could make no comment .

EC AGREES TRADE DEAL WITH ARGENTINA The European Community ( EC ) agreed a trade deal with Argentina designed to compensate the country following the entry of Spain and Portugal into the group , EC officials said . Under the deal agreed by EC foreign ministers , Argentina will gain additional trading rights on a series of products including meat , fish and cereals by - products . But ministers failed to agree on new trade deals with Canada and Japan and are due to study these again , the officials said . The deal with Argentina was agreed by a majority of EC states after West Germany withdrew objections to increased quotas for Argentina on high - quality beef . Ireland and France continued to oppose the deal on meat , saying that the main dispute was over sales of cereals substitutes , but they were outvoted by the other states , the officials said . Under the deal , Argentina will benefit from improved quotas on exports of beef to the EC . In particular the quota on high - quality Hilton beef will be raised by 4 , 500 tonnes to 34 , 300 tonnes and quotas on frozen boneless beef will be increased by 3 , 000 tonnes to 53 , 000 tonnes . Argentina will also benefit from an additional quota of 5 , 000 tonnes of frozen hake fillets at 10 pct duty and reduced levies on 550 , 000 tonnes of wheat bran , the officials said . The improved trade terms were offered after Argentina said that Spain and Portugal ' s entry into the EC affected their exports of cereals substitutes to these two countries . They have been negotiated under the rules of GATT ( General Agreement on Tariffs and Trade zulchzulu But officials said ministers had been unable to resolve Canadian claims that its sales of certain fish to Spain had been affected by the country ' s EC membership . Officials said the EC had asked GATT to arbitrate on the fish dispute with Canada . Ministers also

U . S . SENATE TEAM WANTS MULTINATIONAL GULF FORCE The leaders of a U . S . Senate team probing American defense strategy in the MidEast Gulf said they favored a multinational force to keep oil flowing through the waterway . Sen . John Glenn and John Warner , in Kuwait as part of a Gulf Arab tour , said at a news conference that top officials in the area appeared ready to discuss extra facilities needed if the U . S . upgraded its defense role . The Senate team next heads for the United Arab Emirates , their last stop on a fact - finding mission prompted by Reagan administration plans to let half of Kuwait ' s 22 - tanker fleet fly the U . S . flag . Glenn and Warner said the U . S zulchzulu Britain and France , should explore the possibility of a unified Gulf force . " The American ships , the British ships , the French ships now talk to each other and all we ' ve got to do is formalize this arrangement zulchzulu Warner said . Glenn said a multinational force could be effectively deployed within 24 hours of a decision . Glenn voiced a preference for a United Nations multinational force , or failing that , an American , British , French force with cooperation from the Gulf Arab states . Warner voiced concern that the Soviet Union might use the situation in the Gulf to raise its presence . " And , unequivocally , all GCC states we have talked with , have said that would not be in the interests of the Arabian peninsula zulchzulu

FED EXPECTED TO ADD RESERVES VIA CUSTOMER RPS The Federal Reserve is expected to enter the government securities market to add reserves via customer repurchase agreements , economists said . They expected the amount to total around 1 . 5 billion to two billion dlrs . Economists added that the low rate on federal funds indicates the Fed is unlikely to add funds agressively through overnight system repurchases , unless it feels the need to calm volatile financial markets . Federal funds were trading at 7 - 1 / 8 pct , down from yesterday ' s average of 7 . 61 pct .

SENATOR URGES ACTION TO STABILIZE STOCK MARKETS Sen . John Heinz , R - Pa , urged the Administration to take steps to reduce volatility in the financial markets , including suspending program trading and limiting daily trading on stock index futures . Heinz said margin requirements for index futures , now six pct , should be the same as for common stock and equities . He urged creation of a task force to be headed by former Federal Reserve chairman Paul Volcker to coordinate international credit and zulchzulu policies among major nations and stabilize interest rates at the lowest possible levels .

JAPAN MUST TRY HARDER TO CUT SURPLUS - MINISTER Japan must try harder to reduce its trade surplus or the yen will come under renewed upward pressure , Economic Planning Minister Tetsuo Kondo . He told a press luncheon he hoped Japan could cut its current account surplus by some 10 billion dlrs a year until it is reduced to some 50 to 60 billion dlrs . In the fiscal year ended March 31 the surplus totalled 93 . 76 billion dlrs , or about 4 . 5 pct of GNP . The 6 , 000 billion yen economic stimulation package the government unveiled late last month would help slash Japan ' s current account surplus by five to six billion dlrs , he said .

JAPAN TO REVISE LONG - TERM ENERGY DEMAND DOWNWARDS The Ministry of International Trade and Industry ( MITI ) will revise its long - term energy supply / demand outlook by August to meet a forecast downtrend in Japanese energy demand , ministry officials said . MITI is expected to lower the projection for primary energy supplies in the year 2000 to 550 mln kilolitres ( kl ) from 600 mln , they said . The decision follows the emergence of structural changes in Japanese industry following the rise in the value of the yen and a decline in domestic electric power demand . MITI is planning to work out a revised energy supply / demand outlook through deliberations of committee meetings of the Agency of Natural Resources and Energy , the officials said . They said MITI will also review the breakdown of energy supply sources , including oil , nuclear , coal and natural gas . Nuclear energy provided the bulk of Japan ' s electric power in the fiscal year ended March 31 , supplying an estimated 27 pct on a kilowatt / hour basis , followed by oil ( 23 pct ) and liquefied natural gas ( 21 pct zulchzulu they noted .

FED NOT EXPECTED TO TAKE MONEY MARKET ACTION The Federal Reserve is not expected to intervene in the government securities market to add or drain reserves at its usual intervention time this morning , economists said . With the Federal funds rate trading comfortably at 6 - 9 / 16 pct , down from yesterday ' s 6 . 74 pct average , economists said the Fed did not need to take reserve management action today .

FED EXPECTED TO SET CUSTOMER zulchzulu The Federal Reserve is expected to intervene in the government securities market to supply temporary reserves indirectly via customer repurchase agreements , economists said . Economists expect the Fed to execute 2 . 0 - 2 . 5 billion dlrs of customer repos to offset pressures from the end of the two - week bank reserve maintenance period today . Some also look for a permanent reserve injection to offset seasonal pressures via an outright purchase of bills or coupons this afternoon . The Federal funds rate opened at 6 - 3 / 8 pct and remained at that level , up from yesterday ' s 6 . 17 pct average .

FED ADDS RESERVES VIA OVERNIGHT zulchzulu The Federal Reserve entered the U . S . Government securities market to arrange overnight System repurchase agreements , a Fed spokesman said . Dealers said that Federal funds were trading at 6 - 3 / 8 pct when the Fed began its temporary and direct supply of reserves to the banking system .

GATT CASE AGAINST JAPAN A MODEL FOR U . S . - zulchzulu Agriculture Secretary Richard Lyng said the ruling of a GATT panel on a U . S . trade complaint against Japan , expected soon , may influence the U . S . stance in negotiations with Tokyo on beef and citrus import quotas . The ruling of a GATT tribunal on a U . S . demand that Japan end quotas on 12 categories of food items is expected by the end of the year . Lyng said he is optimistic the ruling will favor the U . S . " These are quota items , and the principles that apply to them , it seems to me , will have some bearing on the question of whether you would have quotas or not on beef and citrus zulchzulu Lyng told Reuters in an interview . He repeated the U . S . demand that Japan lift the quotas on beef and citrus after March 31 , next year . The Japanese quotas on 12 food categories which the United States has challenged include items such as tomato paste , some cheeses and specialty fruit juices . U . S . officials had hoped a ruling against the quotas would be issued earlier this year but the GATT panel decision has been delayed by the illness of the tribunal ' s chairman . The U . S . has taken a hardline stance on the beef and citrus quotas , which Tokyo says must remain in place to protect Japanese farmers . " We will not negotiate new quotas or accept new quotas ( on beef and citrus zulchzulu If they impose them we would consider that an illegal action in the GATT , Lyng said . He declined to say what action the U . S . would take next April if Japan continues to resist U . S . demands .

REAGAN HINTS U . S . WANTS HELP IN zulchzulu GULF President Reagan said he would discuss the Mideast Gulf situation with allied leaders at next week ' s Venice economic summit and hinted he would seek their help in preserving free navigation . In a speech prepared for delivery as the United States made plans to protect 11 Kuwaiti oil tankers from Iranian attack , Reagan said the American people were aware that " it is not our interests alone that are being protected zulchzulu Saying that allied dependence on gulf oil was no secret , Reagan declared , " During the upcoming summit in Venice , we will be discussing the common security interests shared by the western democracies in the MIDEAST Gulf . " The future belongs to the brave . Free men should not cower before such challenges , and they should not expect to stand alone zulchzulu Reagan will meet the leaders of Britain , France , West Germany , Italy , Canada and Japan at the economic summit , which will take place in Venice June 8 - 10 . The 13th annual top - level meeting of the major industrial democracies will take place against a backdrop of rising congressional concern over Reagan ' s plan to protect gulf shipping and demands that the allies do more . These concerns were heightened by the May 17 Iraqi missile attack on the U . S . frigate Stark which killed 37 seamen . " They died while guarding a chokepoint of freedom , deterring aggression and reaffirming America ' s willingness to protect its vital interests zulchzulu Reagan said . In a pre - summit speech celebrating the 40th anniversary of the Marshall Plan , Reagan , who spoke to an audience of foreign affairs experts , also pledged to push for economic expansion by West Germany and Japan to bolster the world trading system . " While the vibrancy of the U . S . economy has contributed enormously to the world expansion , preserving a growing world economy is the business of

zulchzulu WARNS AGAINST FURTHER DOLLAR FALL Bundesbank President Karl Otto Poehl said a weaker dollar would be risky and a further appreciation of the mark would damage prospects for sustained West German economic growth . In a speech to the Institute of Contempory German Affairs here , Poehl said " It would be an extremely risky policy to aim for a further substantial decline in the value of the dollar to correct the trade deficit zulchzulu He said the United States could face a vicious circle of depreciation , inflation and more depreciation if it took that route . Poehl noted West Germany had already taken steps to meet U . S . Demands for greater stimulation of its domestic economy , accelerating tax cuts , cutting interest rates and tolerating above - target money supply growth . He said he would have been happy to have brought forward five billion marks of tax cuts now planned for January 1988 to the beginning of this year , but he said the government faced political constraints getting such measures through the upper house of the West German parliament . But there were also limits to the impact West Germany could accept on exports from a rising mark , he said . Poehl said West Germany relied on exports for about one - third of its gross national product , so a substantial erosion of export markets could not be offset by increasing demand at home . " A further appreciation of the mark could even be an obstacle to further growth zulchzulu he said . Poehl said the Bundesbank had tolerated rapid money supply growth last year because the country enjoyed low inflation and because external factors , including low oil prices and favourable terms of trade , had given some extra leeway . But Poehl said West Germany now faced a difficult dilemma over monetary policy . The underlying rate of inflation was now two pct , not the reported negative inflation rates last year , and West Germany was affected more than before by exchange rate developments . "

U . S . SENATE LIFTS SOME BANS ON NATURAL GAS The Senate unanimously approved legislation to lift a ban on new construction of natural gas - fired power plants and other large industrial gas - burning plants . The bill , sponsored by Senate Energy Committee chairman Bennett Johnston , also repeals mandatory incremental pricing of natural gas which was designed to protect residential consumers from major price increases by forcing some industrial users to pay higher than market prices . " This legislation will open up new natural gas markets zulchzulu the Lousiana Democrat said . The gas restrictions were enacted in 1978 in response to a shortage of natural gas and predictions of higher prices . " Now both oil and gas prices are severely depressed zulchzulu Johnston said . In a compromise with coal producers , the bill requires new baseload electric powerplants be designed to accomodate modifications necessary to burning coal or another alternate fuel .

zulchzulu INSISTS ON MAINTENANCE OF LOUVRE ACCORDS French Finance Minister Edouard Balladur issued a firm call for the continued faithful application of the Louvre accords on currency stability by all major industrial countries . Balladur , responding to weekend remarks by U . S . Treasury Secretary James Baker that the U . S . Would take another look at the accords , said " I firmly desire a faithfull and firm adherence by all the major industrial countries to the Louvre accords -- in both their letter and spirit zulchzulu On Sunday , Baker said last week ' s rise in short - term West German interest rates was not in keeping with the accords . The Louvre accords , agreed in Paris last February , called for stability among the major currencies after a prolonged dollar slide . The accords were reaffirmed by the Group of Seven Finance Ministers in Washington last month . But Baker said at the weekend that the West German rate rise was " not in keeping with the spirit of what we agreed to zulchzulu " What I ' m really saying is that they should not expect us to simply sit back here and accept increased tightening on their part on the assumption that somehow we are going to follow them zulchzulu he added .

SENATE BACKS U . S . RETALIATION IN GULF The U . S . Senate on Tuesday backed President Reagan ' s retaliatory strike against Iranian targets in the Gulf as it moved to take a greater role in making policy in the volatile region . Senators voted 92 - 1 for a non - binding measure that endorsed Monday ' s U . S . attack on two Iranian oil platforms in retaliation for an Iranian attack last Friday on a Kuwaiti ship flying the American flag . The measure said the attack was a firm indication of U . S . resolve that Iran " cannot take military action against the United States with impunity zulchzulu Earlier , the Senate cut off Republican stalling tactics and set a vote on a measure that could give Congress a larger role in making Gulf policy . The measure , however , does not require Reagan to comply with the 1973 War Powers Act , which could lead to a pullout of U . S . forces from the Gulf . While Democrats and Republicans praised the U . S . retaliatory strike , many voiced new fears about the growing U . S . involvement in the Gulf and some demanded that Reagan comply with the War Powers Act .

zulchzulu URGES G - 7 TO RESPECT LOUVRE ACCORD French Finance Minister Edouard Balladur said the Group of Seven ( G - 7 ) industrial countries should respect pledges on monetary policy made in the February Louvre accord on currency stability . " We have to strengthen the cooperation between the seven major industrial countries and remind ourselves of the pledges we made at the Louvre zulchzulu he told journalists . " They were not simply pledges to maintain currency stability , but also to conduct a certain type of economic and monetary policy zulchzulu he added . Balladur ' s comments came after U . S . Treasury Secretary James Baker said on Sunday that the U . S . Would have to re - examine the Louvre accords in the light of the rise in West German short - term interest rates . Balladur was one of the main architects of the Louvre accord and has invested considerable political capital in defending them .

U . S . DOLLAR LOSSES PROPEL BROAD COMMODITY GAINS Commodities from gold to grains to cotton posted solid gains in a flurry of buying today as losses in the U . S . dollar and rising interest rates kindled fears of inflation and economic instability . Gains were most pronounced on the Commodity Exchange in New York , where gold jumped 12 . 40 dlrs and closed at 436 . 50 dlrs a troy ounce , and silver 22 . 5 cents to 6 . 86 dlrs a troy ounce . A key factor behind the advance was anticipation that inflation will be the only way for the major industrial nations to halt the slide in the value of the U . S . dollar , said Steve zulchzulu , director of commodity research with Smith Barney , Harris Upham and Co zulchzulu in New York . The dollar tumbled one day after top finance officials from the seven largest industrial nations reaffirmed their commitment to support its value , and despite reports of intervention by the U . S . Federal Reserve Bank , traders said . Traders said it appears that the industrial nations , known as the Group of Seven , lack the ability to change the long - term direction of the currency markets . " Maybe they have some ideas or plans zulchzulu said zulchzulu . " If they do , it ' s not evident zulchzulu " It looks like there ' s no cure but to let the free market take values to where they should be . " One way or another , we will force our major trading partners to stimulate their economies zulchzulu as a measure to correct the mounting U . S . trade deficit , zulchzulu said . " I think the markets believe , and have believed for a long time , that the only recourse is to reflate at some point . It ' s going to be a long and tedious process , but that ' s what ' s happening zulchzulu he said

UAE CENTRAL BANK CD YIELDS UNCHANGED Yields on certificates of deposit ( CDs ) issued today by the United Arab Emirates central bank were unchanged from those on last Monday ' s offer , the bank said . The one month yield was set at last week ' s 6 - 3 / 4 pct , while two and three month CDs also remained unchanged at 6 - 13 / 16 pct . The six month yield was set at seven pct .

U . S zulchzulu AT U . N zulchzulu CLAIMS SELF - DEFENSE FOR GULF ATTACK The United States invoked the right of self - defense in destroying an Iranian oil platform in the Gulf , the American delegation told the United Nations . Lieutenant General Vernon Walters sent letters about the incident to Security Council President Maurizio Bucci , the delegate of Italy , and Secretary General Javier Perez de Cuellar . U . N . press secretary Francois Giuliani said the Secretary General had no comment on the attack , which followed his appeal last Friday for restraint in the crisis while he pursued efforts to obtain a ceasefire between Iran and Iraq . In his explanation , Walters said the United States took defensive action in response to an Iranian attack against American ships in the Gulf . He cited an Iranian Silkworm missile strike last Friday in Kuwait waters against the United States - flag ship Sea Isle City . Walters said that military forces on the destroyed Iranian platform had engaged in a variety of actions against United States - flag and other zulchzulu vessels and planes . " In accordance with Article 51 of the United Nations ( Charter zulchzulu I wish , on behalf of my government , to report that United States forces have exercised the inherent right of self - defense under internation law by taking defensive action in response to attacks by . . . Iran against United States vessels in the Gulf zulchzulu Walters said . Members of the Security Council met behind closed doors on Monday to discuss developments in the Gulf war , but no statement was issued afterwards .

PAKISTAN UNVEILS NEW TRADE POLICY TO BOOST EXPORTS Pakistani government allowed freer cotton and rice export in a three - year new trade policy aimed at narrowing the country ' s yawning trade gap . Commerce and Planning Minister Mahbubul Haq said in a televised speech the government had also decided to allow duty - free import of cotton yarn to make the textile industry more competitive , and to link bulk tea imports to the export of Pakistani products . Cotton and rice are Pakistan ' s main exports , which have been handled exclusively by state corporations since early 1970s . But Haq said now the private sector would also export cotton and rice along with the corporations , which meets a long - standing demand of the local traders . The duty - free import of cotton yarn has been allowed to bring down prices and help the local ancillary industries compete effectively in the world market , he said . Haq said the new policy , effective from the fiscal year 1987 / 88 beginning on July 1 , would be for three years but reviewed every year . It was a departure from the previous practice of announcing trade policies for a single fiscal year , and Haq said it would enable the businessmen to plan their market strategies over a longer period . He said an export credit of 250 mln dlrs had been provided for the export of engineering goods to selected third world countries on soft credit terms . Pakistan ' s 1986 / 87 exports at 3 . 6 billion dlrs , 18 . 2 per cent more than in the previous year , and imports at 5 . 23 billion dlrs compared to 5 . 63 billion dlrs in 1985 / 86 . He said the government policy was to rationalise and streamline import controls . " It has been observed that due to restrictions on imports , specially on raw materials and intermediate goods , local industry has been suffering for want of necessary inputs zulchzulu he said .

JAPAN DETAILS PLAN TO STAVE OFF TRADE PROBLEMS Japan ' s Liberal Democratic Party ( LDP ) has drawn up a detailed plan calling for large tax cuts and an increase in government purchases of foreign goods , the head of the committee working out the plan , Junichiro Koizumi , said . The plan will also urge the government to double 1985 ' s official development assistance to 7 . 6 billion dlrs within five years instead of seven as the government had promised , senior LDP officials said at a press conference . LDP executive council chairman Shintaro Abe will explain the plan to U . S . Officials when he visits the U . S . On April 19 . Abe ' s visit is to prepare for Prime Minister Yasuhiro Nakasone ' s talks with President Ronald Reagan later this month . Koizumi said the LDP plan will not specify the size of the tax cut or the amount of domestic demand to be stimulated . However , top LDP executives will work out figures so that Abe will be able to offer specifics to U . S . Officials . The proposed increase in procurement of foreign goods by the government will probably include the purchase of super computers , LDP officials said . specific trade problems with other nations and will encourage flows of funds to developing countries , the officials said . The LDP expects the measures to prop up the economy and lessen trade problems with the U . S zulchzulu They added . The basic ideas of the LDP ' s plan were presented to and welcomed by monetary authorities of the major industrial nations in Washington last week , they said . The LDP plan will form the basis for the last of several packages to stimulate Japanese domestic demand and will be unveiled by the government in late May .

WEST GERMANY STILL COMMITTED TO LOUVRE ACCORD West German government sources said Bonn remained committed to the Louvre Accord to stabilise currencies , which was struck by leading western democracies in Paris last February . Over the weekend , U . S . Treasury Secretary James Baker criticised recent rises in West German short - term interest rates and said such developments were not in the spirit of the Louvre pact . He said the agreement may have to be re - examined . The sources said the West German interest rate rises had to be seen in the context of interest rate developments worldwide .

JAPAN DETAILS PLAN TO STAVE OFF TRADE PROBLEMS Japan ' s Liberal Democratic Party ( LDP ) has drawn up a detailed plan calling for large tax cuts and an increase in government purchases of foreign goods , the head of the committee working out the plan , Junichiro Koizumi , said . The plan will also urge the government to double 1985 ' s official development assistance to 7 . 6 billion dlrs within five years instead of seven as the government had promised , senior LDP officials said at a press conference . LDP executive council chairman Shintaro Abe will explain the plan to U . S . Officials when he visits the U . S . On April 19 . Abe ' s visit is to prepare for Prime Minister Yasuhiro Nakasone ' s talks with President Ronald Reagan later this month . Koizumi said the LDP plan will not specify the size of the tax cut or the amount of domestic demand to be stimulated . However , top LDP executives will work out figures so that Abe will be able to offer specifics to U . S . Officials . The proposed increase in procurement of foreign goods by the government will probably include the purchase of super computers , LDP officials said . According to the plan , Japan will also strive to solve specific trade problems with other nations and will encourage flows of funds to developing countries , the officials said . The LDP expects the measures to prop up the economy and lessen trade problems with the U . S zulchzulu They added . The basic ideas of the LDP ' s plan were presented to and welcomed by monetary authorities of the major industrial nations in Washington last week , they said . The LDP plan will form the basis for the last of several packages to stimulate Japanese domestic demand and will be unveiled by the government in late May .

VENEZUELA LOWERS EXCHANGE RATE FOR OIL EARNINGS Venezuela ' s cabinet approved a new exchange rate for oil and mining export earnings , setting it at 14 . 50 bolivars to the dollar from 7 . 50 bolivars previously , Minister Manuel zulchzulu UA said . zulchzulu told reporters after a cabinet meeting that the measure is " fundamental to conserving the economic and financial strength of the petroleum industry zulchzulu He said the new exchange rate , which goes before the central bank for final approval tommorrow , will allow the state oil company Petroleos De Venezuela , S . A zulchzulu PDVSA ) to solve its problem of working capital and implement investment plans , estimated at 20 billion bolivars for 1987 . He did not say when the measure would become effective . Venezuela ' s oil industry previously sold its dollar earnings to the government at 7 . 50 to the dollar but bought foreign exchange from its imports at 14 . 50 bolivars . The new exchange rate will promote purchases of domestic goods and services by the industry , zulchzulu said . He added that it would also put PDVSA in a position to purchase more government debt bonds . PDVSA had available liquid assets of 20 billion bolivars at the start of this year , of which nine billion were in a trust fund in the Central Bank of Venezuela ( BCV ) and placed in government bonds . According to a contract between PDVSA and the central bank , the BCV must provide cash as the oil industry requries by repurchasing the bonds . PDVSA ' s contribution to the treasury last year was 44 . 480 billion bolivars . It foreign earnings for oil and zulchzulu sales were 8 . 023 billion dlrs .

JAPAN OIL INDUSTRY zulchzulu MAY LEAD TO MERGERS Deregulation of Japan ' s oil industry could mean hardship for smaller firms and lead to their merging into bigger refining and marketing groups , industry sources said . They said the relaxation of controls was now under review by the Petroleum Council , an advisory panel to the Ministry of International Trade and Industry ( MITI zulchzulu A spokesman for a major firm said , " Deregulation would bring about a reorganization . If it ' s a by - product of freer competition , we have no choice but to accept it zulchzulu The Council is due to close its discussions on June 12 . The sources said the Council was likely to tell MITI it should end its 50 year - old protection of the industry . It should cut capacity to 3 . 8 mln barrels per day , about 75 pct of current capacity . Quotas should end for crude throughput and gasoline output , and oil tariffs should be abolished . They said deregulation was vital to promote more competition and efficiency , and most saw it as inevitable . " Deregulation is taking place everywhere . Now it ' s our turn to see if we can survive cut - throat competition zulchzulu said a source at one major Japanese oil company . A spokesman for a smaller refiner said , " We ' ll have a hard time surviving , but that ' s something we must go through zulchzulu " In addition to our streamlining and efficiency programs for the oil division , we will exert efforts towards branching out further into other lines such as real estate and travel agencies zulchzulu he said . Larger companies are also streamlining . Nippon Oil Co Ltd which had the largest share of refined products sales in the Japanese market in fiscal 1985 , cut nine pct of its refining capacity in fiscal 1986 . Cosmo Oil Co Ltd , the third largest seller of oil products in 1985 , cut its workforce by some

BONN CONFIDENT OF MAINTAINING CURRENCY STABILITY U . S . Treasury Secretary James Baker met West German Finance Minister Gerhard Stoltenberg and Bundesbank President Karl Otto Poehl in Frankfurt on Monday , a Bonn Finance Ministry spokesman said . After the meeting the spokesman quoted Stoltenberg as saying he was confident that foreign currencies could be stabilised at around current levels . The meeting came after Baker criticised West Germany for increasing short - term money market interest rates . He had said the rise was not in line with the spirit of the Louvre accord aimed at stabilizing the U . S . dollar last February . The meeting had been arranged last week , the spokesman said . Baker , Stoltenberg and Poehl had agreed to pursue the policies agreed under the Louvre pact with reference to currency stability and monetary policy . Earlier on Monday the zulchzulu injected liquidity into the West German money market in a move which money market dealers interpreted as an attempt by the West German monetary authority to curb interest rate rises . The spokesman described Monday ' s talks , which he called private , as very positive .

WORLD SUPPLY / DEMAND ESTIMATES ISSUED BY USDA The U . S . Agriculture Department made the following 1986 / 87 projections in its world Supply / Demand report , with comparisons , in mln tonnes , except where noted -- Total World Grain 1986 / 87 1985 / 86 04 / 09 / 87 03 / 09 / 87 04 / 09 / 87 03 / 09 / 87 Produc 1 , 682 . 31 1 , 686 . 11 1 , 663 . 69 1 , 663 . 70 Total Supply 2 , 025 . 71 2 , 028 . 45 1 , 919 . 18 1 , 920 . 13 Trade - X 212 . 15 211 . 89 204 . 42 203 . 92 Usage 1 , 635 . 01 1 , 630 . 40 1 , 575 . 78 1 , 577 . 79 End Stks 390 . 70 398 . 05 343 . 40 342 . 34 X - Based on export estimate . All Wheat 1986 / 87 1985 / 86 04 / 09 / 87 03 / 09 / 87 04 / 09 / 87 03 / 09 / 87 Start Stks 137 . 05 136 . 48 125 . 54 125 . 87 Production 529 . 20 528 . 40 498 . 97 498 . 81 Imports 97 . 57 98 . 27 94 . 56 94 . 36 Feed Use 101 . 79 100 . 82 90 . 19 90 . 56 Total Domes 517 . 26 514 . 89 487 . 45 488 . 20 Exports 101 . 08 101 . 20 95 . 92 95 . 76 End Stocks 148 . 99 149 . 99 137 . 05 136 . 48 Note - World imports / exports may not balance due to differing marketing years , grains in transit and reporting discrepancies . Coarse Grain 1986 / 87 1985 / 86 04 / 09 / 87 03 / 09 / 87 04 / 09 / 87 03 / 09 / 87 Start zulchzulu 181 . 64 181 .

ECONOMIC SPOTLIGHT - TELECOM IS KEY JAPAN MINISTRY Japan ' s little - known Ministry of Posts and Telecommunications ( MPT ) has emerged as an international force to be reckoned with , political analysts said . MPT , thrust into the spotlight by trade rows with the U . S . And Britain , is in a position of strength due to its control of a lucrative industry and its ties with important politicians , they said . " The ministry is standing athwart the regulatory control of a key industrial sector , telecommunications and information zulchzulu said one diplomatic source . " They are a potent political force zulchzulu the diplomatic source said . But MPT is finding domestic political prowess does not always help when it comes to trade friction diplomacy , analysts said . " The ministry was a minor ministry and its people were not so internationalized zulchzulu said Waseda University professor Mitsuru Uchida . " Suddenly they ' re standing at the centre of the world community and in that sense , they ' re at a loss ( as to ) how to face the situation zulchzulu Most recently the ministry has been embroiled in a row with London over efforts by Britain ' s Cable and Wireless Plc to keep a major stake in one of two consortia trying to compete in Japan ' s lucrative overseas telephone business . The ministry has favoured the merger of the two rival groups , arguing the market cannot support more than one competitor to Kokusai Denshin Denwa Co Ltd , which now monopolizes the business . It has also opposed a major management role in the planned merger for any non - Japanese overseas telecommunications firm on the grounds that no such international precedent exists . The ministry ' s stance has outraged both London , which has threatened to retaliate , and Washington , which says the merger plan is evidence of Japan ' s failure to honour pledges to open its telecommunications market . Washington is also angry over other ministry moves

REAGAN URGES FULFILLMENT OF EXCHANGE ACCORDS President Reagan , preparing to depart for the Venice economic summit on Wednesday , said the United States and its allies must fulfill agreements on exchange rate stability . " Economic policy decisions made last year in Tokyo , and at this year ' s meetings of Group of 7 Finance ministers in Paris and in Washington , cannot be ignored or forgotten zulchzulu he said . " The commitments made at these meetings need to be translated into action zulchzulu Reagan said in a pre - summit speech celebrating the 40th anniversary of the Marshall Plan .

JAPAN FARM REFORM A KEY TO TRIMMING TRADE SURPLUS Basic reform of Japan ' s protected farm sector is a key to shifting its economy away from export to domestic - led growth , a vital step if it is to trim its trade surplus , securities analysts said . The farm sector , which is protected by import tariffs and quotas , propped up by subsidies and price supports , and sheltered by the tax system , has ample room for change , they said . " In economic terms , reform would be a plus zulchzulu said Christopher Chew of brokerage firm James Capel and Co . The ultimate cost of the existing system is food prices twice those in Europe and two to three times those in the U . S zulchzulu The analysts said . Spending on food accounts for about one quarter of the average household ' s budget and roughly 10 pct of the gross national product ( GNP zulchzulu according to a study by Chew . Reducing these prices could increase household spending power by five pct , his study said . The money could be spent on products which would have a more direct impact in boosting domestic growth , it added . " There ' s a lot of slack zulchzulu a U . S . Government official in Tokyo said . " All that money could be spent on something else zulchzulu Direct central government subsidies to the farm sector amount to some five billion dlrs per year . Independent estimates put total subsidies from all sources as high as 37 billion and the analysts said much of that money is wasted . Changing tax laws to encourage city residents who only farm on weekends to put their land up for sale for residential development would also give a boost to domestic spending , economists said . " Housing construction is the key strategic variable in the expansion of domestic demand zulchzulu wrote Chihiro Nakajima , professor at Kyoto Gakuen University . Japanese business groups are calling for staged farm

SAUDI ARABIA WANTS TO INCREASE OIL SALES TO JAPAN Saudi Arabia hopes to increase the volume of its oil exports to Japan through expanding bilateral trade , Saudi Arabian Interior Minister Naif bin Abdul - Aziz said . He told a Tokyo reception his country hopes to raise crude and products exports to Japan to earlier levels , but did not elaborate . To promote trade , Saudi Arabia is inviting Japanese industries to do business there , he said . Japanese firms now have long - term contracts to import a total of 150 , 000 barrels per day of Saudi crude .

FED ' S JOHNSON SAYS LOUVRE ACCORD STILL VITAL Federal Reserve Board Vice Chairman Manuel Johnson said the Louvre Accord is still healthy , but said the United States and West Germany must work out differences over their respective roles in fulfilling the accord . " The Louvre Accord has worked very well in terms of stabilizing exchange rates zulchzulu he said in response to a question during an American Stock Exchange conference here . He said exchange rates have been stable so far in 1987 as a result of the accord .

EXTRACTS FROM OPEC COMMUNIQUE Following are extracts from the communique issued at the conclusion of the OPEC conference here . " The conference expressed satisfaction about the positive results of the agreement signed in December , 1986 , by which OPEC re - established the system of fixed price at a level of 18 dlrs per barrel supported by OPEC production ceilings distributed into national production levels . " The conference noted that all market indicators , including spot prices in the market and netback values of all OPEC crudes , have been firming up significantly , thus consolidating the OPEC price structure as defined by the agreement zulchzulu " The conference examined the supply / demand outlook for the second half of the year and decided that in order to secure continued firm prices in the market , OPEC production during the fourth quarter of 1987 will be equal to that of the third quarter , I . E . 16 . 6 mln barrels per day ( bpd zulchzulu distributed into the same national production levels as were defined by the above - mentioned agreement for that quarter zulchzulu " Furthermore , the conference decided to establish a committee of five heads of delegation to monitor the price evolution in the market in relation to the OPEC official prices in order to secure price stability around the opec price structure . " Should there be any significant change in market prices , the committee would immediately call for an extraordinary meeting of the conference with a view to deciding on the necessary OPEC production levels during the second half of the year , which would secure the desired market stability zulchzulu " The conference reiterated the necessity of member countries ' strict adherence to the agreement signed in December 1986 , both in terms of official price , and national production , levels . " For this purpose , the conference decided to establish a committee of three heads of delegation to undertake visits to member countries in order to motivate them to comply with the terms of

U . S . MAY END ADDITIONAL SANCTIONS AGAINST JAPAN The United States may lift an additional 84 mln dlrs in trade sanctions against Japan later this month , Reagan Administration officials said . President Reagan imposed 300 mln dlrs in sanctions on Japanese goods last April for its failure to honor a 1986 agreement to end dumping semiconductors in the U . S . and third country markets and to open its home market to U . S . goods . The move raised tariffs to 100 pct from about five pct on Japanese color television sets , hand - held power tools and portable computers . Reagan lifted 51 mln dlrs of the sanctions last June after Japan ended selling the semiconductors on the U . S . market at below production costs . Semiconductors are the small silicon chips used for memory and recall purposes in a wide variety of computers . The Administration officials said Commerce Department monitors showed that Japan was ending its dumping of the semiconductors in third countries , where they had been taking sales away from American - made semiconductors . They said it was likely the 51 mln dlrs in sanctions would be lifted by the end of the month . The United States and Japan remain at odds over opening the closed Japanese markets to U . S . goods . U . S . and Japanese officials reviewed Japan ' s compliance with the agreement earlier this week . The periodic reviews are to continue and the remaining sanctions to stay in force , the officials said , until Japan is in full compliance with the semiconductor agreement .

GROUP OF 10 WELCOMES LATEST G - 7 AGREEMENT The Group of 10 developed nations issued a communique welcoming the reaffirmation of the Paris accord on currency stability by the Group of Seven leading industrial democracies yesterday . In the communique issued this morning , the G - 10 said " prospects of member countries ' economies would be improved by stability in the exchange rates of their currencies zulchzulu The G - 10 includes the group of seven - the United States , Canada , Britain , Japan , Italy , West Germany and France - plus Belgium , the Netherlands , Sweden and also Switzerland . Sources who attended the G - 10 conference this morning said the reference to the latest G - 7 agreement was especially added to the brief communique because currency stability will benefit all the G - 10 members . The G - 10 met briefly before the International Monetary Fund Interim Committee meeting scheduled for today . .

U . S . HOUSE PANEL VOTES TO SPEED UP CORN PAYMENTS The House Agriculture Committee voted to make approximately 2 . 8 billion dlrs of zulchzulu deficiency payments immediately instead of in the late fall . A similar measure was decisively defeated on the Senate floor last week . The bill , which passed by a voice vote , would allow so - called Findley payments to be made immediately rather than late this year . Payments for 1987 - 90 zulchzulu crops would not be changed . Because the bill would move 2 . 8 billion dlrs of spending into fiscal 1987 from fiscal 1988 , the measure is expected to meet stiff resistance in the full House .

US RULED OUT ATTACK ON IRANIAN zulchzulu U . S . military planners ruled out Iran ' s Silkworm missiles as a target in the retaliatory attack mounted on Monday for fear of being drawn more deeply into the Iran - Iraq war , defense and Middle East experts said . U . S . naval forces destroyed an offshore oil platform and raided another in what the administration called a " measured and appropriate response " to an Iranian Silkworm missile attack last Friday on a U . S zulchzulu flagged tanker in Kuwaiti waters . Private analysts generally agreed that going after the rig rather than an onshore economic or military target such as Silkworm launch sites reflected a careful bid by Washington to limit the political , military and diplomatic fallout both at home and in the Gulf . " It simply demonstrated the United States will take military action when they ( Iran ) take military action zulchzulu Norman Polmar , a defense analyst and author , said . He said hitting the platforms had spared Iran the embarrassment of casualties on its own soil , possibly avoiding an escalating spiral of attack and counterattack . In addition , it minimized the risk to U . S . forces and the potential embarrassment of any losses , including aircraft that could have been shot down had they taken part in an attack . Anthony Cordesman , author of a new book on the Iran - Iraq war , said the United States apparently chose a limited target to keep alive the possibility that U . N . Secretary General Javier Perez de Cuellar might still persuade Iran to accept a Security Council call for a ceasefire . " We want the U . N . peace initiative to work if there ' s any chance at all zulchzulu he said , adding that the action made it clear tougher steps would follow if Iran to attack Gulf shipping . In targeting an oil rig -- albeit one said by the Pentagon to have been turned into

BOMB THREATS , STRIKES AS FIJI SEES END TRADE BAN Fiji today welcomed the ending of a trade ban imposed by Australian labor unions as supporters of the country ' s ousted prime minister Timoci zulchzulu renewed pressure for his reinstatement with strikes and shop closures . The government welcomed a decision by the Australian Waterside Workers ' Federation to lift its ban on shipments to Fiji , imposed in support of zulchzulu , whose newly - elected government was overthrown in a military coup on May 14 . The ban had threatened food shortages of imported wheat , fresh vegetables and medicines . A direct result of the union decision would be the immediate shipment of 9 , 000 tons of rice and wheat from an Australian port , the government said . Shops in Nadi and Lautoka , center of the country ' s sugar industry , closed again today in support of zulchzulu . In Nadi two bomb threats forced evacuation of the Australian Westpac bank , but police said they turned out to be a hoax . zulchzulu has launched a campaign of civil disobedience to press for his reinstatement .

PAPER SAYS U . S . TRADE DEFICIT CUT TO 13 . 65 BILLION The Washington Post said the U . S . Commerce Department yesterday issued a new report showing that the U . S . Merchandise trade deficit was 13 . 65 billion dollars in February , a reduction of 1 . 4 billion dlrs from the 15 . 06 billion figure the department reported only two days earlier . The newspaper said : " News of the unexpectedly large 15 billion deficit helped batter the dollar ' s value on foreign exchange markets and boosted U . S . Interest rates . " However , the new report went largely unnoticed by financial markets since such a downward revision in the deficit is a monthly occurrence zulchzulu The Washington Post said : " By law , the department must first publish what a top commerce official agreed are misleading trade figures and then wait 48 hours before putting out the more accurate ones zulchzulu No one was immediately available at the Commerce Department for comment on the Washington Post report .

U . S . COMMERCE TRADE REPORT zulchzulu FREIGHT COSTS The Commerce Department said on that insurance and freight costs for imported goods of 1 . 45 billion dlrs were included in the February trade deficit of 15 . 1 billion dlrs reported on Tuesday . The department is required by law to wait 48 hours after the initial trade report to issue a second report on a " customs value " basis , which eliminates the freight and insurance charges from the cost of imports . Private - sector economists emphasized that the Commerce Department was not revising down the deficit by 1 . 45 billion dlrs but simply presenting the figures on a different basis . A report in the Washington Post caused a stir in the foreign exchanges today because it gave the impression , dealers said , that the underlying trade deficit for February had been revised downward . The Commerce department would like to have the law changed to permit it to report both sets of figures simultaneously . " My feeling is the second one is a better report but there ' s legislation that requires us to delay it two days zulchzulu said Robert Ortner , Commerce undersecretary for economic affairs . " But this has been going on for a long time and no one pays any attention to the second figure zulchzulu The 15 . 1 billion dlr February trade deficit compared with a revised January deficit of 12 . 3 billion dlrs . The law requiring a 48 - hour delay in publishing the monthly trade figure excluding freight and insurance was passed in 1979 . Reportedly the feeling was the first figure , which includes customs , freight and insurance , allowed a better comparison with other countries that reported their trade balances on the same basis . The second figure , which would always be lower by deducting freight and insurance , presents the deficit in a more favorable light for the Reagan administration . Ortner said he would like to see the law changed to eliminate the

U . S . TRADE BILL VERY DANGEROUS FOR CANADA , LOBBY A trade bill before the United States House of Representatives " is a very dangerous bill for Canadian industry zulchzulu Canadian Forest Industry Council chairman Adam Zimmerman told reporters . By changing the definition of subsidy under U . S . countervailing duty law , House of Representatives Bill 3 removes protection for companies that take advantage of widely used government programs , Zimmerman told a media briefing . " Clearly , any industry to which Canadian governments grant rights to fish , mine , cut timber , or produce power could be vulnerable to a finding of a subsidy under this language zulchzulu he said . The Canadian forest lobby ' s Zimmerman also said the House of Representative Bill would adopt a new way of measuring subsidies that would greatly increase the size of any countervailing duties that might be imposed on Canadian resource exports to the U . S . Under the bill , any difference between Canadian prices and U . S . or world market prices would constitute a subsidy , he said . Such a method would make Canadian resource industries vulnerable to similar penalties like a 15 pct export tax imposed last January on shipments of Canadian softwood lumber to the U . S zulchzulu Zimmerman added . Canadian negotiators agreed to levy the new tax if a U . S . forest industry lobby would drop its request for a countervail duty on imports of Canadian softwood lumber . " We represent the first victim of the move to price other countries ' natural resources according to the U . S . system zulchzulu Zimmerman said . " If we ' re an example , than other resource industries had better watch out zulchzulu he added . Zimmerman said the Canadian Forest Industry Council plans to discuss concerns about the U . S . trade bill with lobby groups from other Canadian resource industries .

CANADA SEEKS FIVE YEAR FARM REFORM PLAN Canada will propose at the new round of international trade talks that most trade - distorting farm subsidies be phased out over a five year period , Trade Minister Pat Carney said . " Agricultural subsidies and trade barriers have created a vicious circle which continues to cause problems of overproduction and low commodity prices zulchzulu Carney told the House of Commons . Carney was outlining the government ' s new position on the farm trade problem that was tabled on Tuesday in Geneva in the multilateral talks under the GATT ( General Agreement on Tariffs and Trade zulchzulu While few details were released , Carney said the government would also be pressing for an improvement in market access and new measures to ensure countries do not erect artificial barriers . " Under the Canadian proposal , all countries would have to ensure that domestic policies and programs to address the specific needs of their farm sectors do not distort trade zulchzulu a government background paper said . " Furthermore , in assessing the trade impact of programs , credit could be given to countries which effectively control the output of farm products zulchzulu the papers said .

OKLAHOMA CLEANING UP AFTER WEEK OF FLOODS , RAINS Residents of central Oklahoma returned to their homes over the weekend after a week of heavy rains and severe flooding that left two dead and caused more than 20 mln dlrs in damage , officials said . Some 900 people were evacuated from their homes during the rains and flooding last week , civil defense officials said . Many of the shelters set up throughout the state in areas threatened by flooding , except those near the Washita and Red Rivers , closed as residents returned to their damaged homes . Farmers who had expected a near - record wheat crop now say this year will see one of the largest losses in decades . Gov . Henry Bellmon , who on Thursday declared a flooding emergency for central Oklahoma , was expected to ask President Reagan for federal disaster relief for the area . In northern Texas , officials reported several tornadoes on Friday . A twister in Lubbock yesterday damaged six mobile homes and two houses . No injuries were reported .

EC , U . S . REMAIN DIVIDED OVER PASTA DISPUTE Top - level talks last week between the European Community ( EC ) and the United States failed to resolve a dispute over pasta which may provoke new trade frictions next month , diplomatic sources said . The U . S . Insists the EC complies with what it regards as an unambiguous ruling from the world trade body GATT and dismantles an export subsidy system which has led to Italy taking an increasing share of the U . S . Pasta market . The sources said the EC , which currently provides subsidies of around 16 cents a pound , offered a compromise in last week ' s talks in Brussels but that this was rejected by the U . S . U . S . Assistant Special Trade Representative Jim Murphy has returned to Washington ahead of a theoretical July 1 deadline for agreement , set last August when the two sides resolved a related dispute over EC restrictions on U . S . Citrus imports . The diplomatic sources said the citrus issue could be reopened if the pasta dispute was not solved quickly . It was also possible the U . S . Would reimpose a 40 pct tariff on EC pasta , lifted when the citrus row was settled . But the two sides may agree to extend the deadline for a few days as EC Commissioners Willy de Clercq and Frans Andriessen are due to visit Washington from July 7 to 10 .

ZAMBIA DOES NOT PLAN RETAIL MAIZE PRICE HIKE The Zambian government has no immediate plans to follow last week ' s increase in the producer price of maize with a hike in the retail price of maize meal , an official of the ruling party said . Last December , a 120 pct increase in the consumer price for refined maize meal , a Zambian staple , led to food riots in which at least 15 people died . That price increase , which President Kenneth Kaunda later revoked , followed pressure by the International Monetary Fund ((()))) ( IMF ) to reduce the government ' s subsidy bill . However , if the producer price rise , from 6 . 10 dlrs to 8 . 67 dlrs per 90 - kg bag , is not accompanied by a retail price increase , the government will have to spend more on subsidies , a practice discouraged by the IMF . " There is no way out but to raise the subsidy levels of meal . It ( the government ) would have to choose between the demands of the IMF and those of the people zulchzulu a Ministry of Agriculture economist said .

zulchzulu CALLS FOR G - 7 MEETING European Community Commission President Jacques Delors called for a swift convening of a meeting of the G - 7 countries following the instability in today ' s trading on world money and stock markets . He told a press conference here : " G - 7 should meet discreetly and quickly zulchzulu Delors said if the dollar were to fall further against the mark to levels around 1 . 60 , the European Monetary System would undergo a " test by fire zulchzulu Delors said the current problems in the markets had been caused by excessive growth in financial trading , excessive deregulation and the failure of the fundamentals of the world economy to adapt themselves quickly enough to changing circumstances . He said it was " profoundly unjust " to blame it on recent increases in West Germany .

U . S . OIL PRICES STRONG AHEAD OF OPEC MEETING U . S . crude oil prices are at their highest level in more than a year ahead of next week ' s OPEC meeting , even though most industry analysts do not expect any policy changes from the session . They said prices , which have steadily climbed since the organization ' s accord in December , have risen on technical factors within the market and concerns about supplies because of the Iran - Iraq war , which could disrupt deliveries from the Gulf . The U . S . benchmark crude West Texas Intermediate is trading around 20 . 55 dlrs in the July contract on New York Mercantile Exchange ' s energy futures and in the spot market . That is its highest level since January 1986 . OPEC conference president zulchzulu Lukman , who is Nigeria ' s oil minister , said Friday he expects the meeting in Vienna to be brief and calm and that OPEC ' s current price and production agreement may only need a slight review . Although most industry experts expect just a reaffirmation of the December agreement , oil prices continue to climb due to a desire to hedge positions in case of any surprises . Analysts expect the higher prices to continue until soon after the OPEC meeting . At that point , barring any increased tension in the Gulf or changes in OPEC ' s policies , prices should begin easing . " OPEC will probably not do anything it hasn ' t already agreed to in December because oil prices are firm zulchzulu said John Hill , a vice president at Merrill Lynch Futures . OPEC agreed in December to maintain official oil prices at 18 dlrs a barrel and raise the group ' s production ceiling to 16 . 6 mln barrels per day in the third quarter and to 18 . 3 mln barrels in the fourth quarter . This agreement helped send prices sharply higher , rising from 15 dlrs a barrel in

CHINA TRADE DEFICIT FALLS SHARPLY , RESERVES RISE China ' s trade deficit in the first quarter fell to 1 . 05 billion dlrs from 3 . 04 billion in the same 1986 period , customs figures show . Zhang Zhongji , spokesman of the State Statistical Bureau , quoted the figures as showing exports rose 27 pct to 7 . 28 billion dlrs and imports fell 5 . 1 pct to 8 . 33 billion . He said if imports of gifts , foreign aid items and materials for joint ventures are excluded , the deficit was only 350 mln dlrs , and the surplus on invisibles was 700 mln . As a result , foreign exchange reserves increased somewhat from their level at end - 1986 , he said , but gave no figure . Official figures show the reserves at 10 . 514 billion dlrs at end - 1986 , down from 11 . 9 billion at end - 1985 . Zhang said one reason for the rise in exports was improved incentives to export firms , which are being allowed to retain more foreign exchange from the goods they sell . He said first quarter exports to Hong Kong and Macao rose 35 . 5 pct to 2 . 48 billion dlrs and imports rose 55 . 3 pct to 1 . 46 billion . Exports to Japan fell 2 . 3 pct to 1 . 28 billion and imports 24 . 4 pct to 2 . 14 billion . Exports to the U . S . Rose 23 pct to 640 mln dlrs and imports fell 26 . 7 pct to 840 mln . Exports to the EEC rose 35 . 1 pct to 770 mln dlrs and imports fell 3 . 8 pct to 1 . 5 billion , he said .

TURKEY CALLS FOR DIALOGUE TO SOLVE DISPUTE Turkey said today its disputes with Greece , including rights on the continental shelf in the Aegean Sea , should be solved through negotiations . A Foreign Ministry statement said the latest crisis between the two NATO members stemmed from the continental shelf dispute and an agreement on this issue would effect the security , economy and other rights of both countries . " As the issue is basicly political , a solution can only be found by bilateral negotiations zulchzulu the statement said . Greece has repeatedly said the issue was legal and could be solved at the International Court of Justice . The two countries approached armed confrontation last month after Greece announced it planned oil exploration work in the Aegean and Turkey said it would also search for oil . A face - off was averted when Turkey confined its research to zulchzulu waters . " The latest crises created an historic opportunity to solve the disputes between the two countries zulchzulu the Foreign Ministry statement said . Turkey ' s ambassador in Athens , Nazmi zulchzulu , was due to meet Prime Minister Andreas Papandreou today for the Greek reply to a message sent last week by Turkish Prime Minister Turgut Ozal . The contents of the message were not disclosed .

EC WATCHING GULF WAR DEVELOPMENTS The European Community ( EC ) should watch very carefully for any developments in the Gulf War and their consequences on the oil market , EC Energy Commissioner Nicolas zulchzulu said today . Speaking two weeks after a U . S . warship was attacked in the Gulf , zulchzulu warned , " An escalation in the Gulf would increase tensions in the oil market zulchzulu " But I do not want to be alarmist zulchzulu he told a news conference after an EC energy ministers meeting in Luxembourg . He said the volume of EC oil imports from the Gulf had declined to around 31 pct of total oil imports in the first three months of 1987 against 35 pct in the same period last year . " There are also other potential sources of supplies in the world zulchzulu he added . The issue of Gulf oil imports was not discussed at the ministers ' meeting , he added . A EC committee of national experts in the so - called oil supply group would discuss Gulf oil supplies at their bi - annual meeting on June 19 , he said . But any major decisions would have to be reserved for EC foreign ministers , diplomats said . West European nations have so far shown little enthusiasm for backing a U . S . plan to give military protection to merchant ships in the Gulf which could help insure the safety of oil supplies .

ECUADOR POSTS 71 . 3 MLN DLR 8 - MTH TRADE DEFICIT Ecuador posted a trade deficit of 71 . 3 mln dlrs in the first eight months of 1987 , compared with a surplus of 468 . 6 mln dlrs in the same period of 1986 , central bank figures show . Ecuador suspended oil exports , which made up 55 pct of the value of its total exports in 1986 , for five months this year after an earthquake in March shattered the country ' s pipeline . The central bank said the value of exports from January to August 1987 stood at 1 . 132 billion dlrs and imports 1 . 204 billion dlrs . Net international monetary reserves declined to 57 . 5 mln dlrs at end - September from 146 . 8 mln dlrs at end - September 1986 .

CONVOY RUNS GULF GAUNTLET , OTHER SHIPS STAY CLEAR A new convoy of tankers escorted by American warships headed down the Gulf on Wednesday , towards Iranian oil platforms still oozing smoke after having being blasted by U . S . Navy raiders . Some Gulf sea captains were reported to be steering well clear of Iran ' s Silkworm missiles , however , and frontline emirate Kuwait redeployed air defences to counter the threat . " I think the predominant feeling ... Is of being scared this conflict will escalate zulchzulu a top West German Foreign Ministry official , Helmut Schaefer , told reporters in Bahrain after a tour of three Gulf states . b Shipping sources said on Tuesday night at least six sea captains had voiced fears that Iran would avenge Monday ' s U . S . Raids by unleashing more Silkworm missiles at ships plying the Gulf . Belgium decided two minesweepers en route for the Gulf would stay out for the time being following Monday ' s U . S . Action . But there was no sign that the prospect of more tit - for - tat assaults had reduced the level of shipping activity in the area . Iran , having vowed to react strongly after Monday ' s U . S . Action , launched a barrage of threats and ridicule . For its part , Washington warned Iran again on Tuesday that it was ready for any further hostile action . Pentagon officials then announced that a U . S . Guided missile destroyer began escorting two Kuwaiti tankers flying the U . S . flag southwards -- the 80 , 000 tonne product carrier Ocean City and 46 , 000 tonne petroleum tanker Gas King .

COMMONWEALTH BANK CUTS AUSTRALIA PRIME TO 17 . 5 PCT The Commonwealth Bank of Australia said it will lower its prime lending rate to 17 . 5 pct from 18 . 25 , effective April 15 . The bank ' s new rate will be the lowest of Australia ' s current prime rates . They now range from 17 . 75 pct to 18 . 5 after a recent series of reductions since late March following an easier trend in short term money market rates . Two of the three other major trading banks now have prime rates of 18 pct and one of 18 . 25 . The Commonwealth ' s move reverses an increase from 17 . 5 pct in early February .

CCC CREDIT GUARANTEES TO EL SALVADOR zulchzulu The Commodity Credit Corporation ( CCC ) has reallocated 1 . 3 mln dlrs in credit guarantees originally granted to cover the sale of protein meals to El Salvador so it may buy rice , the U . S . Agriculture Department said . The action reduces the guarantee line authorized for sales of protein meals to 12 . 7 mln dlrs and creates a rice credit guarantee line of 1 . 3 mln dlrs , the department said . All sales under the credit guarantee lines must be registered and exports completed by September 30 , the department said .

SEOUL ANNOUNCES MORE TARIFF CUTS FOR U . S . South Korea will cut import taxes on 50 items , including construction equipment , photographic film , cigarettes and pipe tobacco , to help reduce its trade surplus with the United States , the finance ministry said . The tariff cuts , of between five and 30 percentage points , take effect on July 1 . This brings to 157 the number of goods on which import taxes have been cut this year , a ministry official said . The 157 are among about 290 items on which Washington has asked Seoul to lower tariffs , he added . Today ' s announcement follows Saturday ' s removal of import curbs on 170 products . For 46 of those products , the U . S . Had had sought free access to the South Korean market . " This is in line with the government ' s policy to limit our trade surplus with the United States to help reduce trade friction between the two countries zulchzulu the official said . South Korea ' s trade surplus with the U . S . Rose to 7 . 3 billion dlrs in 1986 from 4 . 3 billion in 1985 . Officials said the surplus was expected to widen further in 1987 but Seoul would try to hold it below eight billion dlrs . The finance ministry said tariffs would be cut later this month on a further 53 items , including acrylic yarn and ethylene , by an average 7 . 7 percentage points in order to check inflation . The officials said the tariff cuts would contribute to holding wholesale and consumer price rises at less than three pct this year .

SINGAPORE EXTERNAL TRADE GAINS 8 . 8 PCT IN QUARTER Singapore ' s external trade grew 8 . 8 pct in first quarter 1987 , against a 12 . 4 pct decline in the same period last year and two pct growth in the previous quarter , the Trade Development Board said . It said exports over the period rose by 8 . 7 pct to 12 . 38 billion dlrs and imports by 8 . 9 pct to 14 . 64 billion for a trade deficit of 2 . 26 billion , against a 2 . 06 billion deficit in the same 1986 period and 1 . 78 billion deficit previously . The growth was attributed to the strength of non - oil trade , especially computers and computer parts , electronic components and garments , it said .

ENERGY / U . S . PETROCHEMICAL INDUSTRY Cheap oil feedstocks , the weakened U . S . dollar and a plant utilization rate approaching 90 pct will propel the streamlined U . S . petrochemical industry to record profits this year , with growth expected through at least 1990 , major company executives predicted . This bullish outlook for chemical manufacturing and an industrywide move to shed unrelated businesses has prompted GAF Corp & lt ; GAF zulchzulu privately - held Cain Chemical Inc , and other firms to aggressively seek acquisitions of petrochemical plants . Oil companies such as Ashland Oil Inc & lt ; ASH zulchzulu the Kentucky - based oil refiner and marketer , are also shopping for money - making petrochemical businesses to buy . " I see us poised at the threshold of a golden period zulchzulu said Paul zulchzulu , chairman of giant Dow Chemical Co & lt ; DOW zulchzulu adding , " There ' s no major plant capacity being added around the world now . The whole game is bringing out new products and improving the old ones zulchzulu Analysts say the chemical industry ' s biggest customers , automobile manufacturers and home builders that use a lot of paints and plastics , are expected to buy quantities this year . U . S . petrochemical plants are currently operating at about 90 pct capacity , reflecting tighter supply that could hike product prices by 30 to 40 pct this year , said John Dosher , managing director of Pace Consultants Inc of Houston . Demand for some products such as styrene could push profit margins up by as much as 300 pct , he said . zulchzulu , speaking at a meeting of chemical engineers in Houston , said Dow would easily top the 741 mln dlrs it earned last year and predicted it would have the best year in its history . In 1985 , when oil prices were still above 25 dlrs a barrel and chemical exports were adversely affected by the strong U . S .

U . S . FEBRUARY TRADE TO BE REPORTED ON NEW BASIS The February monthly merchandise trade figures to be reported Tuesday by the Commerce Department will be on a new basis reflecting more recent data , so avoiding future revisions of the monthly figure , Commerce officials said . The overall January deficit of 14 . 8 billion dlrs will be revised , but the February figure will be a final one , officials said . Previously , the initial monthly figure has had to be revised in subsequent months because of the time lag between the report and the compiling of final estimates on imports and exports . The reporting of the February trade data was delayed several weeks to permit gathering latest figures on imports and exports to give a clearer picture of the monthly trade balance .

U . S . FEBRUARY TRADE TO BE REPORTED ON NEW BASIS The February monthly merchandise trade figures to be reported Tuesday by the Commerce Department will be on a new basis reflecting more recent data , so avoiding future revisions of the monthly figure , Commerce officials said . The overall January deficit of 14 . 8 billion dlrs will be revised , but the February figure will be a final one , officials said . Previously , the initial monthly figure has had to be revised in subsequent months because of the time lag between the report and the compiling of final estimates on imports and exports . The reporting of the February trade data was delayed several weeks to permit gathering latest figures on imports and exports to give a clearer picture of the monthly trade balance .

TASS DENOUNCES U . S . ATTACK ON IRAN AS zulchzulu The official Soviet news agency Tass denounced a U . S . Attack on an Iranian oil - drilling platform in the Gulf on Monday as military adventurism and said it would bring no dividends to the Reagan administration . Tass commentator Mikhail zulchzulu said the administration had embarked on an adventurist path in order to deflect attention from the scandal in which the United States sold arms to Iran and the profits were diverted to Nicaraguan rebels . " The confrontation is a fact now . What is obvious is that the latest military adventure will not bring political dividends to the American administration zulchzulu zulchzulu said . Soviet leader Mikhail Gorbachev and Foreign Minister Eduard Shevardnadze abruptly left a parliamentary session earlier on Monday , sparking diplomatic speculation that they were concerned with an urgent matter of foreign affairs . Soviet officials have previously criticized the United States for sending naval forces into the Gulf , saying their presence serves to increase tension . Moscow is officially neutral in the war between Iran and Iraq . It is a major arms supplier to Iraq but has also sought broader contacts with Iran in the last year . zulchzulu said : " The United States has undertaken an act of armed aggression against Iran , the probability of which has long been spoken of by Washington officials zulchzulu

COARSE GRAIN SUPPLY / DEMAND BY COUNTRY -- USDA The U . S . Agriculture Department detailed world supply / demand data for major importers and exporters of coarse grains , by country , as follows in mln tonnes -- USSR COARSE GRAIN 1986 / 87 1985 / 86 04 / 09 / 87 03 / 09 / 87 04 / 09 / 87 03 / 09 / 87 Start zulchzulu N . A . N . A . N . A . N . A . Production 103 . 30 103 . 30 99 . 99 99 . 99 Imports 12 . 00 10 . 00 13 . 70 13 . 70 Domes Use 112 . 30 112 . 30 111 . 99 111 . 99 Exports NIL NIL NIL NIL End Stocks N . A . N . A . N . A . N . A . N . A . - Not Available . EC - 12 COARSE GRAIN , in mln tonnes -- 1986 / 87 1985 / 86 04 / 09 / 87 03 / 09 / 87 04 / 09 / 87 03 / 09 / 87 Start zulchzulu 14 . 91 14 . 93 10 . 53 10 . 53 Production 81 . 22 81 . 19 88 . 21 88 . 28 Imports 16 . 58 17 . 26 18 . 29 18 . 24 Dom Use 79 . 64 81 . 27 82 . 38 82 . 55 Exports 19 . 90 19 . 96 19 . 73 19 . 56 End Stocks 13 . 18 12 . 15 14 . 91 14 . 93 EASTERN EUROPE COARSE GRAIN , mln tonnes -- 1986 / 87 1985 / 86 04 / 09 / 87 03 / 09 / 87 04 / 09 / 87 03 / 09 / 87 Start zulchzulu 4 . 07 3 . 72 5 . 14 5 . 14 Production 73 . 95 74 . 50 68 . 28 68 . 38 Imports 4 . 90 4 . 47 5 . 58 5 . 26 Dom

SRI LANKA PLANS TO RENEW ABU DHABI OIL CONTRACT Ceylon Petroleum Corp ( CPC ) has decided to renew its one - year contract with Abu Dhabi for 480 , 000 tonnes of Upper Zakum crude oil , CPC officials told Reuters . They said CPC made the recommendation to the cabinet and is now awaiting its approval . CPC ' s one - year contract with Abu Dhabi expired on May 31 this year and it wants the renewed contract to begin on June 1 at the government selling price . Delivery will be determined in the course of the year . Last year , shipments were in three parcels of 120 , 000 tonnes each and four of 30 , 000 tonnes each . CPC officials also said the company agreed with the Egyptian government for the supply of 240 , 000 tonnes of Gulf of Suez crude for delivery in two shipments this year at the government selling price . Last year , CPC bought 120 , 000 tonnes Gulf of Suez through C . Itoh . Officials said plans to buy 240 , 000 tonnes of Basra Light from Iraq have not been finalised yet because of several constraints . CPC said it could not accept 120 , 000 tonne parcels and proposed to lift 30 , 000 tonnes in eight shipments . Iraq National Oil Co ( INOC ) told CPC a Red Sea port where lifting was to take place could not accept small ships . INOC then proposed to deliver eight shipments of 30 , 000 tonnes each . CPC said INOC planned to ship the oil to an Indian port for delivery of Indian requirements , later going to Colombo to offload CPC ' s needs , but CPC considered this unsuitable . CPC said it had not received a reply from INOC since December . Sri Lanka imports all its annual needs of 1 . 7 mln tonnes . This year it plans to buy 400 , 000 tonnes on the spot market compared with about 1 . 3 mln tonnes

CHILEAN TRADE SURPLUS NARROWS SLIGHTLY IN FEBRUARY chile ' s trade surplus narrowed to 102 . 2 mln dlrs in february , from 105 . 4 mln dlrs in the same month last year , but it was above the 18 . 2 - mln - dlr surplus recorded in january 1987 , the central bank said . Exports in february totalled 379 . 4 mln dlrs , 17 . 2 pct above the january figure . Imports fell 9 . 2 pct from the previous month to 277 . 2 mln dlrs . The figures for the same month last year were 314 mln and 208 . 6 mln dlrs , respectively . The accumulated trade surplus over the first two months of 1987 stands at 120 . 4 mln dlrs against 132 . 8 mln dlrs the previous year .

CHINA DAILY SAYS VERMIN EAT 7 - 12 PCT GRAIN STOCKS A survey of 19 provinces and seven cities showed vermin consume between seven and 12 pct of China ' s grain stocks , the China Daily said . It also said that each year 1 . 575 mln tonnes , or 25 pct , of China ' s fruit output are left to rot , and 2 . 1 mln tonnes , or up to 30 pct , of its vegetables . The paper blamed the waste on inadequate storage and bad preservation methods . It said the government had launched a national programme to reduce waste , calling for improved technology in storage and preservation , and greater production of additives . The paper gave no further details .

NO PRESSING NEED FOR SOVIET WHEAT SUBSIDY - zulchzulu The Soviets have not indicated an urgent need for a U . S . wheat subsidy offer , and it is unlikely that such an offer will be ma during the U . S zulchzulu Soviet summit expected to be held next month , Agriculture Secretary Richard Lyng told Reuters . In an exclusive interview with Reuters , Lyng said he did not know if the United States will offer Moscow another wheat subsidy offer this year or when that offer will be made . " Last year it was well into the year before we offered it . There ' s been nothing that ' s taken place to indicate to me that there ' s a pressing need on their part for that sort of deal ( a wheat subsidy zulchzulu When asked if a subsidy would be offered at a U . S zulchzulu Soviet summit , Lyng said , " No , I don ' t think so . I don ' t think that zulchzulu The Agriculture Secretary said a U . S . wheat subsidy deal to Moscow would not be the kind of topic appropriate for discussion at a summit . " It would not be the kind of issue that the President or the Chairman would get into specific negotiations or discussions about zulchzulu Lyng said . " When Mr . Nikonov ( communist party secretary for agriculture ) was here ... he indicated that trade in wheat was not something that would be discussed with the President of the United States . He said it ' s not presidential zulchzulu Lyng said . Lyng said uncertainties about wheat quality in some major producing areas of the world , volatile wheat prices and the still unfinished Soviet grain harvest could delay any final decision on the timing of another wheat subsidy to Moscow . The future of the U . S zulchzulu Soviet long - term grains agreement will be discussed the first of next year , Lyng said , but the Agriculture

CHANCES OF DIRECT U . S zulchzulu IRAN GULF CLASH SEEN LOW U . S . moves to increase its warships in and around the Mideast Gulf could trigger more attacks on unprotected merchant ships but run little risk of sparking a direct military clash with Iran , diplomats said . They said the American decision inevitably carries some risk of armed confrontation , but Iran -- despite its blunt rhetoric -- would want to avoid this as much as Washington . " As Iran knows very well , what America is bringing into the Gulf could do serious damage zulchzulu said one western diplomat . Diplomats see the greatest potential danger in more attacks on " soft targets " such as merchant shipping not protected by American or other western navy vessels patrolling the Gulf . The risk of Iranian attack on U . S . Warships or Kuwaiti oil tankers carrying the U . S . Flag and under naval escort is rated by diplomats as low . However , " There is the threat that the Iranians , seeing these heavily protected U . S zulchzulu flag tankers , will go for softer targets zulchzulu one diplomat said . Tehran Radio quoted Iran ' s top defence spokesman Ali Akbar Hashemi Rafsanjani as saying yesterday that Washington was " moving to the brink of an armed encounter with us zulchzulu The U . S . is increasing its Gulf fleet from seven to 10 warships and sending the refurbished battleship Missouri to patrol just outside the Strait of Hormuz . The build - up ties in with U . S . plans to start escorting Kuwaiti oil tankers next month , which have been re - registered to fly the American flag to give them naval protection . Shipping serving Kuwait has come under repeated attack by Iran , angered at the emirate ' s war backing of Iraq . Concern in the region has mounted over the threat posed by Chinese - made Silkworm missiles , which the U . S . says Iran is preparing

U . S . LAWMAKERS SUPPORT GULF ACTION American lawmakers rallied behind President Reagan for the U . S . strike against Iranian targets in the Gulf but the attack fueled a sharp new White House - Congress debate over limits on his powers to make war . The Pentagon announced on Monday that U . S . warships destroyed a non - producing oil platform used for monitoring Gulf ship traffic and military operations , and also raided a second Iranian oil rig in retaliation for an earlier Iranian attack on a Kuwaiti ship flying the American flag . Many Democrats , who control Congress , and Republicans expressed support for the attack and praised it as an appropriate " measured response zulchzulu But Democrats and liberal Republicans voiced new fears that the growing confrontation between Tehran and the United States could erupt into a major war , and demanded that Reagan comply with the 1973 War Powers Act , which could lead to a pullout of American forces from the waterway . " Those who contend the strike was necessary must realize their words are easily construed as a tacit endorsement of war with Iran zulchzulu said Sen Mark Hatfield of Oregon , a Republican .

SPAIN APPEALS FOR EC HELP ON MAIZE IMPORTS Spanish farm minister Carlos Romero , speaking at a meeting of EC farm ministers , called for action to help the Spanish maize market , Spanish diplomatic sources said . Spain is threatened with massive imports from third countries by the end of the year , they said . They said the imports are due to come in as a result of the accord by which the EC has promised the United States it will import two mln tonnes of maize and 300 , 000 tonnes of sorghum into Spain from third countries this year . Around a sixth of this tonnage has so far come in under a reduced levy system and the EC cereals management committee may decide this week to authorise the Spanish intervention board to make direct purchases . The sources said Romero urged that other EC countries should take some of the imports to prevent disturbance of the Spanish market . They said he threatened to withhold support for the EC Commission plan for new limits on farm output which if breached would mean price cuts unless Spain received some help . The sources said no direct reply was given to Romero at the meeting .

SOVIET TRADE DEFICIT WITH WEST SOARS IN 1986 The Soviet trade deficit with the West almost quadrupled last year , reaching 2 . 72 billion roubles compared with 713 mln in 1985 , official figures showed . Statistics published by the monthly journal Foreign Trade showed Soviet trade turnover for 1986 fell to 130 . 9 billion roubles from 142 . 1 billion the previous year , a drop of 7 . 8 pct . Moscow ' s trade surplus with East Bloc countries continued to grow in 1986 . Western analysts attributed the deficit rise with the West to the world oil price slump , which hit Moscow ' s main export and cut hard currency earnings needed for purchases in the West .

SHULTZ PREDICTS RAPID NARROWING OF U . S . TRADE GAP Secretary of State George Shultz said the U . S . Would erase its large foreign trade deficit faster than many predicted , and the consequences for its trade partners might be traumatic . " The U . S . Economy will inevitably make the adjustment necessary to move from a deficit to a surplus trade balance in order to service our growing foreign debt zulchzulu he told a conference attended by the six members of the Association of Southeast Asian Nations and their leading Western friends . " In my view , this will happen more rapidly than many observers now predict zulchzulu " The universal strategy of aggressive export - led growth is becoming less effective zulchzulu Shultz said . " It is not arithmetically possible for every country in the world to be a net exporter at the same time . The U . S . Deficit , which we all decry , has been in a sense the place into which everyone ' s export - led strategy for growth has gone zulchzulu " The huge surpluses of Japan and ( West ) Germany have fed on this deficit , so something will have to give and it will be possibly a traumatic experience zulchzulu he added . " While you must keep up the pressure on us to eschew protectionist policies , you must act too zulchzulu Shultz said . " I can do a better job of convincing the Congress to leave our door open to imports if more of our trading partners open their doors wider zulchzulu he told the group , which included representatives from Australia , Canada , Japan , New Zealand and the European Community .

EC COULD DECIDE ON JAPAN TRADE MOVES IN LATE MAY The European Community ( EC ) has effectively given Japan six weeks to take moves to open its market to imports before it decides on possible tough retaliatory trade measures , EC diplomats said . They said EC foreign ministers will meet on May 25 and 26 to review the state of trade relations between the two sides . The EC executive commission was asked by representatives of member states on Friday to propose a renunciation of some EC pledges to the world trade body , GATT , unless there are " adequate and early measures to open the Japanese market zulchzulu Such a renunciation would be the first step to imposing stiff increases in duties , or quantitative limits , on Japanese exports . The diplomats said it was unlikely that the issue would be discussed in detail at the next meeting of EC foreign ministers on April 27 and 28 in Luxembourg as time was needed to prepare proposals for possible retaliatory action . They said the commission has powers to take some limited action before getting ministerial approval to prevent Japanese exports of electrical , photographic and other goods being diverted to Europe following of possible U . S . Tariff moves . In May , the ministers are also likely to discuss how to prevent Japan from getting an extra trading advantage as a result of Spain and Portugal joining the bloc , which obliges them gradually to reduce tariffs on many industrial goods . Japan ' s trade surplus with the Community has grown steadily , registering a record 2 . 13 billion dlrs in March .

ARMISTICE zulchzulu EC AND U . S . IN SPAGHETTI WAR Talks between the European Community ( EC ) and the United States have failed to settle a trade dispute over pasta , an EC Commission spokesman said . Diplomatic sources said the dispute could provoke new trade friction unless it was settled soon . Washington is insisting that the EC comply with what it regards as an unambiguous ruling from the world trade body GATT and cut export subsidies which have allowed Italy to take an increasing share of the U . S . pasta market . The EC provides subsidies of about 16 cents a pound on pasta exports . The spokeswoman said the talks foundered on the question of how much the subsidy should be cut .

WHITE HOUSE SAYS JAPANESE zulchzulu LIKELY The White House said high U . S . Tariffs on Japanese electronic goods would likely be imposed as scheduled on April 17 , despite an all - out effort by Japan to avoid them . Presidential spokesman Marlin Fitzwater made the remark one day before U . S . And Japanese officials are to meet under the emergency provisions of a July 1986 semiconductor pact to discuss trade and the punitive tariffs . Fitzwater said : " I would say Japan is applying the full - court press ... They certainly are putting both feet forward in terms of explaining their position zulchzulu But he added that " all indications are they ( the tariffs ) will take effect zulchzulu

AUSTRIAN CURRENT SURPLUS GROWS IN FOUR MONTHS Austria ' s current account surplus grew to 11 . 0 billion schillings in the first four months this year from 8 . 2 billion in the same period last year , the National Bank said . In April , the current account recorded a deficit of 300 mln schillings compared with an 800 mln surplus in March and an 800 mln deficit in April , 1986 , the bank said in a statement . The trade deficit in the first four months fell to 16 . 4 billion schillings from 17 . 5 billion in the same period last year while in April the deficit was 4 . 1 billion compared with 6 . 9 billion in March and 3 . 6 billion in April , 1986 .

LATEST ATTACK SEEN POINTING UP DILEMMAS FOR US Military experts say the United States faces a dilemma in the Gulf following U . S . destruction of an Iranian oil platform in retaliation for an attack on a U . S zulchzulu flagged tanker . The experts told Reuters Tehran holds the initiative and is likely to control the tempo and direction of the conflict as long as America simply reacts to Iranian attacks by launching limited retaliatory strikes . But if Washington seizes the initiative with bolder steps -- such as mining Iran ' s harbors , blockading its shipping , or destroying key bases -- it could find itself in a major war . " Iran is in the driver ' s seat in an absolute sense as the cycle of attack and retaliation continues zulchzulu said Fred zulchzulu , a Gulf War expert with the private Center for Strategic and International Studies ( CSIS zulchzulu " It ' s like a Greek tragedy zulchzulu said retired Adm . Eugene Carroll of Washington ' s private Center for Defense Information ( CDI ) think tank . Some Middle East experts say the only way out is for Washington to join forces with Moscow in pressing for an end to the war between Iran and Iraq . They say it is not feasible for America to withdraw its 30 - ship force from the Gulf area , where the Navy began escorting U . S zulchzulu flagged Kuwaiti tankers in July . Withdrawal would give the appearance of being chased away by Iran , which President Reagan could never accept . U . S . Defense Secretary Caspar Weinberger told a Pentagon news conference the destroyers Kidd , Young , Leftwich and Hoel fired about 1 , 000 rounds of five - inch shells at Iran ' s Rostam oil rig 120 miles east of Bahrain beginning at about 1400 Gulf time ( 0700 EDT ) on Monday . Weinberger said the platform had been used as a military base by Iran and that the attack responded to an

U . S SENATE PANEL VOTES TO LIMIT COUNTY LOAN DROP The Senate Agriculture committee voted to limit changes in county loan rate differentials starting with the 1988 crop as part of a budget deficit reduction package . The panel also approved measures that could trigger larger corn and wheat acreage reduction requirements , increase farmer - held reserve storage payments , reduce a potential milk support price cut , and require advance deficiency payments for producers of major crops . A proposal to require imported tropical oils be labeled on U . S . food products failed by a 10 - 8 vote .

EC , U . S . PLAN HIGH - LEVEL TRADE TALKS The European Community is willing to offer limited concessions to the United States on one of two major issues which threaten to poison their trade relations next year , an EC commission spokesman said . He said the offer would be made at a meeting later this month between U . S . Trade Representative Clayton Yeutter and EC External Relations Commissioner Willy de Clercq . EC Farm Commissioner Frans Andriessen told agriculture ministers meeting in Luxembourg that the EC is willing to make some temporary arrangements to lighten the impact on U . S . Exports of an EC plan to ban the sales of meat from animals fed with growth hormones , the spokesman said . Washington has said it will take trade reprisals if the EC proceeds with the ban from January 1 and if European countries do not quickly cut back what it sees as unfair subsidies to the makers of their Airbus airliner which are harming U . S . Manufacturers . It claims the hormones ban has no scientific basis and will rob it of 130 mln dlrs ' worth of exports a year . Diplomatic sources said the Yeutter - de Clercq meeting will take place in London and will also involve the aerospace ministers of France , Britain , West Germany and Spain , the countries involved in the Airbus project .

SEASONAL EXPORTS REPORTED BY U . S . EXPORTERS Exports of the following commodities between start of current seasons and April 2 , with comparisons , as reported to USDA by exporters , in thousand tonnes , unless noted -- 4 / 2 / 87 Prev Wk 4 / 3 / 86 Wheat 21 , 044 . 6 20 , 398 . 3 19 , 725 . 8 Soybeans 14 , 334 . 2 14 , 063 . 5 14 , 698 . 4 Corn 20 , 296 . 0 19 , 194 . 6 25 , 182 . 6 - x Sorghum 3 , 222 . 5 3 , 149 . 7 3 , 168 . 9 - x Soybean Oil 138 . 4 135 . 8 179 . 9 Soybean Meal 4 , 098 . 0 3 , 880 . 6 3 , 141 . 3 Cotton 4 , 333 . 1 4 , 204 . 7 1 , 510 . 4 X - 2 , 059 , 300 tonnes of corn and 763 , 800 tonnes of sorghum added to reflect change in marketing year to Sept - Aug .

MAJOR U . S . PIPELINE MAY BE CLOSED SEVERAL DAYS The operator of a major U . S . crude oil pipeline , shutdown because of flood damage , said it may be several days before repairs are made and the system is functioning again . Dan Stevens , manager of public and government affairs at Texaco Inc & lt ; TX zulchzulu operator of the pipeline through its subsidiary Texaco Pipeline Co , said the company hopes repairs will begin in about five days and expects it to take several more days to complete . " At this point we are lining up what we know we need , to get the job done zulchzulu Stevens said , adding that the timing for repairs will depend on the damage to the pipeline which is difficult to assess because of flooding on the Red River . The pipeline was shipping roughly 225 , 000 barrels of crude oil per day , or about 55 pct of its capacity during the 30 days preceding its shutdown on Saturday , Stevens said . The pipeline was shut down from Cushing , Okla , to Witchita Falls , Kan , on Saturday due to an undetermined leak at the Red River crossing , near the Oklahoma / Texas border , because of severe rains , a spokesman for Texaco said . Stevens said it was reasonable to suggest the pipeline could operate at full capacity when it reopens in order to make up for the zulchzulu but cautioned they will talk with customers to determine their requirements . Oil analysts and traders said they were not sure if the shutdown will continue to raise U . S . oil prices . Monday , after Texaco confirmed that the pipeline had been closed , West Texas Intermediate crude in the spot market and on New York Mercantile Exchange ' s energy futures complex rose 20 cts a barrel . Stevens said it was reasonable to suggest the pipeline could operate at full capacity when it reopens in order to make up for the

JAPAN WARNS U . S . IT MAY RETALIATE IN TRADE DISPUTE Japan warned the United States it may take retaliatory measures if the United States imposes its planned trade sanctions on April 17 , a senior government official said . Shinji zulchzulu , Vice Minister of the International Trade and Industry Ministry , said in a statement Japan would consider measures under the General Agreement on Tariffs and Trade and other actions if the United States imposes 100 pct tariffs on some Japanese exports as planned next week . However , zulchzulu said Japan was ready to continue trade talks with the United States despite its failure to convince America to call off the threatened tariffs during two days of emergency talks which ended in Washington yesterday . Last month President Reagan announced the sanctions in retaliation for what he called Japan ' s failure to honour a July 1986 agreement to stop dumping computer microchips in markets outside the United States and to open its home market to American goods . zulchzulu said the United States had regrettably not listened to Japan ' s explanation of its efforts to live up the pact and said Washington had not given any detailed explanation of why it planned to impose the tariffs .