A top official of the Organization for Economic Cooperation and Development on Monday urged Japan to accelerate regulatory reform to help spur economic growth led by information and communications technology.

Speaking at the National Press Club in Tokyo, OECD Secretary General Donald Johnston said the Paris-based club of 29 industrialized nations expects the Japanese economy to pick up since it bottomed out last year.

While the OECD prepares its forthcoming economic outlook on Japan, however, Johnston stressed that "regulatory reform still remains on the front burner as far as the OECD is concerned for Japan."

"We see the real potential for Japan is in structural reform," Johnston added, saying that a lack of deregulation has prevented some sectors from experiencing the explosive growth allowed for by communications technology.

Commenting on the so-called new economy, the IT-led growth paradigm exemplified by the U.S. economy, Johnston attributed Japan's stagnant growth this past decade to its failure to implement effective regulatory reforms in areas like telecommunications, noting the high charges Japanese must pay to access the Internet.

Johnston said that boosting consumer confidence is important in promoting use of the Internet and suggested the OECD should quickly and effectively address the rising number of computer bugs and hacking cases.

Johnston is in Tokyo to exchange opinions with Japanese government officials on the forthcoming Group of Eight summit meetings to be held in July in Okinawa. The meetings will be preceded by OECD ministerial meetings to be held late next month. Johnston said that in a few days the OECD will transmit its preparatory work to G8 members. The work encompasses a substantial package, including reports on biotechnology and other aspects of food safety, such as genetically modified organisms.

Japan, EU stay close

Japan and the European Union reaffirmed efforts Monday for the four major economic powers to reach an accord on the long-delayed start of a new round of multilateral trade negotiations.

During a 35-minute telephone conversation, Foreign Minister Yohei Kono and EU Trade Commissioner Pascal Lamy also agreed to encourage developing nations to join and help realize the new round under the World Trade Organization, a Foreign Ministry official told reporters.

The so-called quadrilateral economic powers are Canada, the EU, Japan and the United States.

Kono and Lamy reaffirmed the importance of addressing three major areas in the new round: measures to reduce dumping, the environment and farming, the official said.

Lamy expressed his intention to step up efforts through Kono's cooperation in first generating an agreement between the so-called quadrilateral economic powers of Canada, the EU, Japan and the United States and then encouraging developing nations to take part in the new round, the official said.

Kono agreed to maintain close contact with Lamy on the three major areas, the official said.