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EU pushes for 2017 conclusion to Japan free trade talks

BRUSSELS, Feb 20 (Reuters) - The European Union should be able to conclude a free trade agreement with Japan this year after failing to hit an end-2016 deadline, a European Commission source close to the negotiations said on Monday.

A trade deal between the two has taken on added significance after U.S. President Donald Trump's withdrawal from a planned Trans-Pacific Partnership (TPP) trade alliance including Japan and as the EU looks beyond America for trade partnerships.

"We don't intend to slip into next year. In fact, we'd like to do this much faster than that. I have no idea whether it's March, June, September," said the Commission source.

The key issue is to balance Europe's wish to sell more food and drinks in Japan and gain access to Japanese public tenders, with Tokyo's demand for tariff-free access for its auto industry, including car parts.

"I don't see any reason in the negotiations as they are why it shouldn't be done this year. And if it's not done this year, we will have to ask ourselves the serious question of whether it can be done at all," the Commission source said.

Trade Commissioner Cecilia Malmstrom and Japanese Foreign Minister Fumio Kishida agreed at a meeting last week on a commitment to secure a deal soon.

For Europe, a deal with Japan would represent not only an economic boost but a further symbolic success for its trade agenda, with the EU-Canada trade pact set to go into force in the coming months after fierce opposition.

For Japan, the deal would show it can still do deals despite the apparent demise of the TPP, once a pillar of Washington's Asia policy.

Japan, the world's third-largest economy, is the EU's sixth-biggest export market. For Japan, the EU ranks as the third-largest destination for its goods.

(Reporting by Philip Blenkinsop; editing by Andrew Roche)