Japan and the United States have agreed on a deal to allow Tokyo to join talks on a U.S.-led Asia-Pacific free trade pact that Prime Minister Shinzo Abe is making a keystone of his strategy to open Japan's economy and spur long-sought growth.

The bilateral deal brings Japan closer to entering talks on the Trans-Pacific Partnership (TPP) pact, which Japan hopes to participate in as early as July.

Abe last month announced his decision to join the trade talks - despite fierce opposition from Japan's politically powerful farm lobby - as part of a "third arrow" in his "Abenomics" policy triad, after fiscal spending and drastic monetary policy easing.

The U.S.-Japan agreement allows the White House to give Congress 90-days' notice that it plans to start trade negotiations in time for Japan to participate in a July round of TPP talks.

U.S. labour groups had been concerned about the impact of removing U.S. tariffs on autos. Japanese media have reported that Tokyo and Washington agreed that the United States could keep tariffs of 2.5 percent on Japanese car imports and 25 percent on imported trucks. The bilateral agreement also covered insurance and farm goods, the reports said.

New Zealand Trade Minister Tim Groser said last month the TPP member nations could formally decide whether to allow Japan into the talks when the 21-member trade officials meet in Indonesia on April 20-21 for the annual meeting of the Asia-Pacific Economic Cooperation forum.

Countries in the trade talks aim to strike a deal by the end of this year.

Presented by Adam Justice