Japan hopes to enter into more free trade agreements (FTAs) with other countries and relax foreign investment barriers to render its ailing economy more globally competitive, a top council said Wednesday.

"We will aggressively explore ways to form FTAs," economic minister Heizo Takenaka told reporters after a regular meeting of the government's Council of Economic and Fiscal Policy.

"There is no other choice other than to take this path due to globalisation. Japan must find ways to revitalise companies amid this global economy," he said.

The panel, chaired by Prime Minister Junichiro Koizumi, met Wednesday evening to discuss

FTAs and identified three goals the government must achieve for Japan to make better use of relaxed global trade barriers, said Takenaka.

Fresh economic relationships should be formed with different countries, although specific names were not mentioned at the meeting.

Tokyo must also take away regulations and rules that hinder the inflow of foreign capital to Japan. Finally foreign professionals such as doctors should be encouraged to come and work here, Takenaka said.

Japan signed an FTA with Singapore in January, the first such agreement for the world's second biggest economy. However, the pact does not include free trade in agriculture, which is heavily protected in Japan.

Tokyo has also launched governmental talks with South Korea and Mexico, along with nongovernmental talks between countries such as Chile and Thailand.

But on Tuesday Japan's biggest trading partner the United States lashed out at Tokyo for hindering imports along with its own economic potential with too much red tape.

"Structural rigidity, excessive regulation, and market access barriers continue to limit opportunities for US companies trading with and operating in Japan," the US Trade Representative said.

Japan's top council which comprises cabinet ministers and business leaders also discussed ways to improve research and development in the country.