NEW YORK, Jan 20: Powerful US and Japanese business leaders called on Friday for a free-trade agreement to link the world's two largest economies. After day-long talks in New York, the US Business Roundtable organization and Japan's Keidanren group also pledged to work together on taking advantage of China's rapid growth, and on climate change.

The groups said their proposed “Economic Partnership Agreement” (EPA) held “tremendous potential” for the US and Japanese economies, and urged their governments to start negotiations as soon as possible.

Both countries should push for a global liberalization deal at the World Trade Organization (WTO), the business groups said in a joint statement.

“But while world trade talks move slowly, the governments have an opportunity to push ahead and lead by example, to demonstrate the importance of open trade, investment and regulatory reform, and to establish a new foundation for United States-Japan economic relations, they said.

The EPA would enmesh two economies that together account for 40 per cent of global gross domestic product.

Outside of its free-trade partners Canada and Mexico, the United States carries out more trade with Japan than with any other country, the groups noted.

The United States is Japan's top trading partner, and Japanese companies invest more in the country than anywhere else with about 600,000 Americans on their payrolls.

These economic facts reflect unprecedented good economic relations in recent years,” the joint statement said.

A US-Japan EPA would build on this interdependence by providing longer-term stability and new opportunities for growth in the US-Japan economic relationship, symbolizing the continued vitality of the countries' alliance.

Finally, an EPA between the United States and Japan could be constructive in facilitating broader economic integration in the Asia-Pacific region. As talks at the WTO have stalled, the US government has pursued a number of ambitious bilateral trade pacts. It is locked in difficult talks with South Korea and Malaysia now, but Japan has yet to appear on the radar.

Following their first meeting since July 2005, the US and Japanese lobby groups also noted the major opportunity thrown up by China's breakneck growth.

At the same time, the business leaders understand that the challenges presented by China's rapid growth are real, and must be addressed through both bilateral and multilateral agreements, they said.

The groups agreed to work with each other to “encourage China” on regulatory transparency, intellectual property rights and market access in services.

They also said that climate change and sustainable growth demanded responses from the private sector as well as governments.

They pledged to cooperate “to promote proactive and voluntary business efforts to maximize resource efficiency and minimize greenhouse-gas emissions.

The Business Roundtable says it groups chief executives of leading US companies with 4.5 trillion dollars in annual revenues and more than 10 million employees combined.

Nippon Keidanren, with nearly 1,700 members, is the key representative organisation for Japanese business and industry, and occupies an influential role in Japan's policymaking.

—AFP