By John S. McClenahen Those who look at recent economic history and are ready to write off Japan as a major economy are "almost certainly wrong," asserts C. Fred Bergsten, director of the Institute for International Economics (IIE), Washington, D.C. Indeed, Bergsten is promoting a free-trade agreement (FTA) with the United States as a means of reinforcing the economic recovery now under way in Japan and reasserting bilateral economic leadership. "A period of 'catch-up growth' may already be under way and may in fact cast Japan as one of the major 'upside surprises' of the world economy over the next few years," Bergsten told the Foreign Correspondents' Club of Japan in Tokyo this week. He foresees Japan posting GDP growth of 3% to 4% annually this year and next -- and perhaps for a couple of years beyond that. "Now that both the U.S. and Japanese economies are growing robustly, and the exchange rate between their currencies is nearing equilibrium, it is time for the two countries to return to a positive agenda to strengthen their economic -- and, indeed, their overall -- relationship," said Bergsten. "Moreover, their present positions enable them to exercise the joint leadership of the global economy befitting the world's two largest national economies," he added. "In light of the major risks facing the world trading system, the most fruitful area for them to do so is trade policy -- by launching negotiations for a free-trade area between them."