Australia and Japan have started to work on a Free Trade Agreement (FTA) feasibility study, announced Australian Deputy Prime Minister Mark Vaile on Wednesday.

The two countries have agreed on detailed terms of reference to examine the feasibility of a comprehensive FTA covering a number of issues including trade in goods and services, investment and intellectual property rights, he said in a statement.

Vaile said he is confident the study will highlight the benefits an FTA would bring to both economies.

Economic modeling published by both governments last April showed that full bilateral liberalization of markets would produce 39 billion Australian dollars (30 billion US dollars) in additional GDP over 20 years for Australia and 27 billion dollars (20.8 billion US dollars ) for Japan.

"An FTA would take this important relationship (with Japan) to new levels of integration," he said.

"That said, if the study concludes that Australia and Japan should proceed to negotiate an FTA, we need to be realistic that any negotiation will require a firm political commitment on both sides," he added.

Source: Xinhua