KEY POINTS:
Japan and New Zealand have set up a working group to develop the bilateral trade and economic relationship.
Japan is New Zealand's third largest trading partner with two-way trade worth more than $7.3 billion but it has always shied away from a free trade deal due to its agricultural trade barriers.
The working group will consist of cross-agency officials looking at ways to improve the relationship and is expected to report back to both governments before the end of 2007.
Trade Minister Phil Goff said Prime Minister Helen Clark and Japan's then prime minister Junichiro Koizumi had agreed at a meeting last year that more work was needed to add value to the countries' relationship.
He said the working group process would allow both countries to set out their interests and concerns.
"I hope it will help set the scene for a better informed discussion about the possibility of a closer economic partnership," he said.
"The working group is clearly an important step in the right direction, but we have a lot of work to do before decisions on specific initiatives can be taken."
- NZPA
