The New Nation - Internet Edition

AFP, Tokyo

Japan needs to show strong political leadership if it is to achieve a free trade deal with the United States, a prospect that presents both huge opportunities and challenges, a US envoy said on Friday.

Assistant US Trade Representative Wendy Cutler said she sensed "some momentum" was building in Japan towards the goal of a free trade agreement (FTA) between the world's two largest economies.

Expectations for what a US-Japan free trade deal could accomplish would be very high, she told reporters on a visit to Tokyo.

"We're the world's two largest economies with a complex economic relationship and a vast range of interested stakeholders. I believe that a US-Japan FTA would present enormous challenges and opportunities," she said.

Cutler was the chief US negotiator for a huge free trade deal signed with South Korea in June, the biggest such deal for Washington in nearly 15 years.

"The question is when-or some say whether-Japan will be ready to move forward with the same kind of bold steps that led Korea to embark and conclude a high quality FTA with the largest economy in the world," she said.

"It's no secret to met that there's a lot of rivalry between many ministries in Japan. For an FTA to work you would really need to have strong political leadership."

The United States wants Japan to open up its tightly shut agriculture sector before it negotiates a free trade deal with Asia's largest economy.

"Japan would need to look at its own economic future and figure out if its current economic course is really the right way to go if it wants to continue to grow and remain a vibrant economic force in the global economy," Cutler said.

Washington urged Japan yesterday to take further steps in opening and deregulating its markets, especially the medical, pharmaceutical and insurance sectors, as part of an annual review of trade relations.