US Trade Representative Rob Portman and Indonesian Trade Minister Mari Pangestu said after talks in Washington that they aimed to conclude an agreement as soon as possible that would help to tackle the illicit activity in Asia's biggest remaining tropical forests.

"I am pleased to report that the United States and Indonesia are committed to concluding a landmark agreement to combat illegal logging and illegal trade in endangered species," Portman told reporters with Pangestu by his side.

"This is a unique opportunity to strengthen our cooperation with Indonesia to better protect Indonesia's parks, forests and sensitive habitats from illegal logging," he said.

If concluded, it would be the first-ever US agreement to facilitate bilateral cooperation to combat illegal logging, Portman said.

Details of the prospective agreement were not available but officials said it could involve tightening of enforcement measures.

Illegal logging causes environmental damage, economic hardship and poverty and depresses legally harvested wood prices by up to 16 percent, conservationist groups and timber traders said as they welcomed the joint initiative.

Pangestu said there was "significant" progress in the bilateral talks and added that the two sides also discussed "concrete measures" to cooperate in preventing "improper transhipment" of other Indonesian commodities to the United States, such as shrimp and textiles.

China, the world's largest importer of tropical wood, plays a central role in laundering illegal timber from some of the world's most endangered forests in the Asia-Pacific, global environmental group Greenpeace said in a report last week.

Also fuelled by demands from the United States, European Union and Japan, the ancient forests of Indonesia are being destroyed faster than any other forest on Earth, according to Greenpeace.

Much of the timber supply to China comes from Indonesia and Papua New Guinea, where at least three-quarters of logging is illegal, it said.

A separate report from a coalition of international and Chinese organisations released last week made similar allegations against China as well as the United States, Japan and Europe.

That report called for governments and the forestry industry to increase transparency and crack down on corruption driving illegal logging.

The American Forest and Paper Association, the national trade grouping of the forest, paper and wood products industry, said in a statement Tuesday that the US-Indonesia initiative was a "key step towards making real progress in the fight against illegal logging".

It said that up to 10 percent of global timber production could be of suspicious origin and illegal logging depressed legally harvested wood prices by seven to 16 percent on average.

"Our companies are losing 460 million dollars in business each year and illegal logging undermines public confidence in the forest products industry as a whole," said Henson Moore, president of the association, which represents over 200 companies.

Humane Society International, an animal rights group, said the United States and Indonesia should create and enforce a "'chain-of-custody' tracking system for wood from the stump in the forest all the way through the processing, sale and export of timber.

"Such a system is vital to separate illegal from legal timber," it said.

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