Japan agrees to talk free trade 

New Zealand and Japan will begin discussions on a free trade agreement.

The breakthrough comes after a meeting between Helen Clark and Japanese Prime Minister Yasuo Fukuda in Tokyo on Wednesday night.

Clark says it has taken years for Japan, which is New Zealand's third largest export market, to agree to trade talks.

The agreement by Japan to investigate a free trade deal has been welcomed by the Wellington Regional Chamber of Commerce.

Chamber chief executive Charles Finny says there is a lot of water to flow under the bridge before New Zealand will actually get to negotiations let alone conclusion.

But, he says it is a lot more than what was expected to come out of those talks so the Prime Minister's done well.

Finny says the biggest risk for New Zealand is that Australia is in free trade negotiations already, and if it gets free access to the Japanese market, trade will be diverted from New Zealand across the Tasman.

Just last month New Zealand signed a free trade deal with China. That agreement promises to eliminate tariffs or taxes on New Zealand's imports to China, although most are graduated over time.

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