Japan must speed up talks on planned free trade pacts and study new free trade arrangements with the United States and the European Union (EU) to keep up with the global economic trend, a government task force said.

The group of experts, mostly academics, also called on the government to speed up much-needed reforms in the agricultural sector, where a protectionist environment has hindered Tokyo's trade talks with other countries.

"This is an urgent issue. If untreated, we will be left behind," said Takatoshi Ito, head of the group within Prime Minister Shinzo Abe's top economic council.

The group's report said Japan has been too slow in promoting and concluding free trade pacts.

South Korea, for one, has agreed on a free trade pact with the United States, and looks set to strike a similar deal with the EU by the end of the year, it added.

"The impact of a EU-South Korea deal would be bigger than the US-South Korea pact as the EU has high tariffs on key items that Japan exports and that compete with South Korea," Ito said, citing the EU's duty on cars and flat-screen TVs.

"The speed is the key," added Ito, who is also a member of Abe's Council on Economic and Fiscal Policy (CEFP).

The report said the government should start preparing for a free trade pact with the EU quickly, and should also start a joint study with the United States for a possible free trade agreement.

Japan currently has free trade pacts with Singapore, Mexico, Malaysia, the Philippines, Chile, and Thailand. It has also reached broad agreements to strike similar deals with Indonesia, Brunei and the Association of South East Asian Nations (ASEAN).

But talks with South Korea have stalled, while negotiations are still under way with countries such as India, Vietnam and Australia.

It usually takes a year or two for Japan to study the pros and cons of trade pacts with countries before it starts official negotiations.

The official talks then often take several months to a few years before both countries sign a deal.

The report also called for drastic structural reform in Japan's agricultural sector, where many steps have been taken to protect farmers.

"In order to lead free trade negotiations, it is inevitable that we deal with the agricultural sector, where reforms have not been implemented," the report said.

"We should aim for a strong agriculture sector that does not fear globalization. It is an important challenge to strengthen agricultural reforms," it added.

The report was submitted to the CEFP, along with earlier proposals on making Tokyo a more competitive financial centre along with New York and London.

The task force hopes that many of their recommendations in the report will be included in the CEFP's annual report of reform proposals expected to be finalized in June. (Reuters)