The U.S hopes it will be able to resolve a disagreement with Tokyo over an existing bilateral agreement on expanding foreign access to Japan's paper and paper products market, according to Lawrence Greenwood, economic minister counselor of the U.S. Embassy.

Greenwood was speaking Mar. 6 in a question-and-answer session after making a speech at the Foreign Correspondents' Club in Tokyo. U.S. and Japanese trade officials are holding a two-day meeting here for the last round of reviews of a bilateral five-year agreement on paper and paper products that expires April 4.

Washington hopes to extend the agreement for another five years, while Japan believes the extension is unnecessary. "We remain puzzled by the fact that (there is) so little foreign access in Japan in the paper sector," Greenwood said.

Although Greenwood acknowledged the positive effects of the agreement, he said, "Overall, it seems that we need to find ways to continue (cooperation) in this area." "I am optimistic that we will be able to reach some form of (agreement) on cooperation," he said.

Concerning Washington's trade policy toward Japan, which was the main theme of his speech, Greenwood said the U.S. will continue pushing Tokyo to promote deregulation, which is important to the U.S. for two major reasons. "First, regulations lie at the heart of our market access problem with Japan," he said. "Regulation is part of an overall bias for the status quo against new market entrants, who often are foreign." Second, he said, regulatory reform is about the only way for Japan to promote sustainable, domestic demand-led economic growth, given the severe constraints Japan faces in pursuing aggressive fiscal and monetary policy.