U.S. TREASURY'S BAKER CANCELS TRIP TO AUSTRALIA
Treasury Secretary James Baker has
cancelled a trip to Australia because of pressing business at
home, including the visit this week by Japanese Prime Minister
Yasuhiro Nakasone, a Treasury spokesman said.
    The spokesman, who asked not to be identified, said: "I
would not draw any conclusion from the cancellation...I would
just say it's the press of business."
    But he added that the visit by the Japanese leader was "part
of the press of business."
    The spokesman denied the cancellation was linked to the
current turmoil in the financial markets.
   
    Nakasone's visit is expected to be crucial for the currency
markets. Unless the Japanese prime minister brings with him
measures to stimulate the Japanese economy by fiscal expansion
or lower interest rates, the visit is likely to be considered
by currency markets as an outright failure.
    In addition, it is thought highly unlikely that Nakasone
and Reagan will agree on the removal of U.S. trade sanctions
imposed earlier this month on certain electronic goods.
    But the participation in the talks by Baker, the
administration's top policy maker on international economic
affairs, suggests that hard bargaining between the two sides
may be in prospect.
   
    Asked if the trip by Baker, who was to have left April 30
and returned May 6, had been dropped in the last couple of
days, the Treasury spokesman replied: "I would think so."
    He described the trip as "purely ceremonial."
    Both Japan and the United States have a lot to lose from an
unsuccessful outcome to the this week's talks.
    Tokyo and Washington are aware that nervous currency 
markets stand ready to bail out of dollars and buy yen, which
economists fear could send world interest rates soaring and
even lead to global recession.
    Baker has been the driving force behind the
administration's efforts to coordinate international economic
policies and reduce global trade imbalances.
   
 Reuter
