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Japan and the European Union are unlikely to agree on the possible launch of a joint study of a free-trade agreement when leaders meet in Tokyo on Wednesday, sources said.

The two sides appear unable to see eye to eye as a proposal by Tokyo for future intergovernmental talks at the joint study has been dismissed as premature by the 27-nation European Union, with the EU side demanding Japan first do more to reduce nontariff barriers, the sources said Tuesday.

Japan and the EU will hold their annual summit this week, during which the government of Prime Minister Yukio Hatoyama and the group of EU leaders, including European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso, will discuss a wide range of issues.

Trade issues are high on the agenda. As of Tuesday morning, Japanese and European officials were not able to determine the wording of the section in a joint statement the leaders will release after the meeting.

“The opinions are completely different between the two sides,” a Japanese official involved in the drafting said on condition of anonymity. “Japan wants to write (in the statement that) an agreement was reached to start a joint study but the EU does not want to,” the official added, describing the gap as “100 to 1.”

A European diplomatic source earlier said it is too early to discuss a FTA, implicitly criticizing the Japanese government for not having done enough to respond to the list of EU requests to ease regulations in such areas as government procurement and product safety screening, which the European side blames for hampering fair trade.

“If we do start something, we want to be extremely ambitious,” the source said. “It’s not something that you agree . . . superficially.”

Experts point out that Japan’s move reflects the country’s sense of urgency after South Korea signed a free-trade accord with the European Union.

Japanese industries have pressed their own government to follow suit amid concern that they would face tough competition from rival South Korean auto and high-tech makers, which would benefit from lower tariffs on their exports to the European Union.

Japanese and EU officials are accelerating their efforts to have the annual statement look as positive as possible.

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