UPDATE 1-Japan says ready to engage on trade demands-USTR

(Adds background, Kirk quotes)

WASHINGTON Feb 7 (Reuters) - Japanese trade officials on Tuesday assured the United States they were prepared to discuss key U.S. trade demands if allowed to join talks on a regional free trade agreement in the Asia Pacific region, the U.S. Trade Representative's office said.

"Japanese officials underscored the Japanese government's readiness to engage with the United States on a range of issues going forward," USTR spokeswoman Carol Guthrie said in a statement. "As a next step, both governments agreed to hold a follow-up meeting at the working level on February 21-22 in Washington, D.C., as the consultative process continues."

Japan is pressing to join the United States and other countries in talks on the proposed Trans-Pacific Partnership pact, but faces strong opposition from Detroit auto manufacturers who say they do not believe Tokyo is really prepared at this time to open its market to more car imports.

The Obama administration is consulting with Congress, business and organized labor as it makes up its mind whether to support Japan, Canada and Mexico's bid to join the TPP talks, which now include the United States, Australia, New Zealand, Chile, Peru, Singapore, Malaysia, Vietnam and Brunei.

"We have to go through a very deliberative process," U.S. Trade Representative Ron Kirk told Reuters in a recent interview. The current TPP members are entertaining the three countries' interest "and frankly giving them the concerns of our stakeholders over the next several months."

"But we've also agreed we aren't going to slow down on our work to ... conclude this agreement this year, as our leaders have asked us to do," Kirk said, referring to a goal set in November by Obama and other heads of the TPP countries.

Some members of Congress - especially from auto-producing states such as Michigan - also share Detroit's concern about Japan joining the negotiations, since it could lead to an agreement requiring the United States to eliminate remaining tariffs on Japanese auto imports.

(Reporting By Doug Palmer; Editing by Jackie Frank and Cynthia Osterman)