SEOUL, Nov 12 (Reuters) - Japan and the European Union agreed to proceed with high-level talks with the aim of launching trade negotiaions at their summit next year, a Japanese official said, with Tokyo keen to catch up with Asian rival South Korea.
The agreement was reached during a meeting between Prime Minister Naoto Kan and European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso on the sidelines of the Group of 20 summit in the Korean capital.
Japanese firms are urging the government to forge more trade pacts to boost the competitiveness of electronics and automobile exports in the face of fierce competition from South Korea, whose pact with the European Union takes effect in July.
"I hope we will agree with the EU to launch the talks at next year's regular summit meeting," Japanese Deputy Chief Cabinet Secretary Tetsuro Fukuyama quoted Kan as telling the EU side.
While the EU is seeking Japan's efforts to ease non-tariff trade barriers including government procurement, Japan is asking the EU to tackle auto-related and other tariffs, Fukuyama said.
Politically sensitive agricultural products are not up for discussion.
Prior to Friday's meeting, Japan has promised greater EU access to public works contracts, pharmaceuticals and medical equipment markets, to coax the bloc into free trade talks.
European businesses are eyeing free trade deals with Asian countries to secure opportunities in highway construction, environmental technology, banking and cars. The bloc is currently in free trade talks with India, Singapore and Malaysia.
Seoul and Washington failed to reach an agreement on revamping an existing trade deal at a meeting on Thursday between President Barack Obama and his counterpart Lee Myung-bak.
After the G20 meeting ends on Friday many of the leaders will travel to Japan for a weekend summit of the Asia-Pacific Economic Cooperation (APEC) forum, with the focus again on boosting trade and shoring up economic growth. (Reporting by Tetsushi Kajimoto; Editing by Alex Richardson)