"Commission has a mandate for Japan FTA negotiation," said one EU official in a text message. The agreement gives the European Commission, the EU executive, authority to negotiate with Japan on behalf of the 27 EU member states.

An EU-Japan FTA would bring together two trading partners responsible for a third of global economic output and could create 400,000 jobs in Europe alone. But the complexity of the negotiations means it could take several years to reach a deal.

France and Italy have been worried about the impact on their auto industries, and the deal was only reached after Paris was given safeguards to defend French carmakers against potentially strengthened competition from Japan, said another EU official.

The plan is part of an EU ambition to make up for stagnant European demand with potential free-trade pacts with major economies, including Canada and the United States.

Japan is the EU's third-largest trading partner after the United States and China, accounting for 150 billion euros a year in trade in goods and services.

(Reporting by Robin Emmott, writing by Sebastian Moffett,; editing by Philip Blenkinsop)

• A Permanent Economic Emergency