Minister of Economic Affairs Shih Yen-shiang confirmed Tuesday that Taiwan and Japan have started negotiations on a bilateral investment guarantee agreement to step up economic exchanges between the two countries. He said that Taiwan has been looking forward to starting free trade agreement (FTA) talks with its major trading partners, including Japan, particularly after a landmark economic cooperation framework agreement (ECFA) with China in June. However, an FTA with Japan is a 'mid- or long-term goal, ' in light of the politically sensitive relations among China, Taiwan and Japan, he said at an event held in Taipei to promote investment in Osaka. 'We have opted to begin with a bilateral investment accord to build mutual trust and lay a solid foundation for an FTA, ' the minister said. This is part of Taiwan's efforts to seek closer economic cooperation and exchanges with Japan, he said. Officials from Taiwan and Japan initiated talks in April this year on a bilateral investment accord, and a second round of talks was held in Tokyo in August, according to sources close to the matter. The Ministry of Economic Affairs expects concrete results on this effort before the end of the year, according to a ministry official, who spoke on condition of anonymity. Japan is Taiwan's second largest trading partner. 