TOKYO, JUNE 28 -- U.S. and Japanese trade negotiators tonight announced what they described as a historic agreement designed to revamp economic practices in both countries and ultimately reduce the huge U.S. trade deficit with Japan.

They said the wide-ranging package of reforms and commitments would help eliminate many trade barriers, make it easier for foreigners to do business in Japan and reduce the constant bickering over trade issues that has soured the countries' relationship in the last few years.

Among the measures was a commitment by Japan to increase spending on public works over the next decade by more than $1 trillion over the level of the past decade and a pledge by the United States to slash its budget deficit through steps that would include increasing tax revenue.

The package was the product of nearly a year of politically difficult negotiations focusing on underlying barriers to a more balanced trading relationship. The United States currently runs about a $49 billion trade deficit with Japan despite government efforts to adjust exchange rates, tackle individual trade complaints and boost exports to Japan.

In April, the two countries produced an interim report that included Japanese commitments to change its convoluted distribution system and make it easier for large stores, such as Toys R Us, to open. While the April negotiations pointed the way to eventual accord, they left a number of key issues unresolved, and tonight's agreement provided more specific commitments from both sides.

"We believe that the commitments and actions spelled out in the report should help to reduce payments imbalances, lead to more efficient, open and competitive markets {and} promote sustained economic growth ..." the U.S. negotiators said in a prepared statement at a press conference tonight.

In Washington, President Bush said the accord would enhance "the quality of life in both Japan and the United States."

Japanese officials described the agreement as one that would help most Japanese consumers by increasing imports, reducing red tape and lowering prices.

Prime Minister Toshiki Kaifu said the agreement would reform Japan's economy "in the consumers' best interest" and would "greatly contribute to improving the Japanese standard of living ... and bringing the Japanese economy to be more harmonious with the world economy."

Some analysts suggested, however, that the package would have little effect on the trade deficit and would mostly help Japan by forcing it to enact reforms and open its economy in ways that many here have said are long overdue.

"It's more significant for the political dimensions than for the economic impact it is likely to have," said an American businessman with a major U.S. corporation here. "Basically, it was a Kabuki drama put on for Congress to stave off negative legislation against Japan."

Commerce Secretary Robert Mosbacher, in Washington, also cautioned that the accord by itself does not end trade problems with Japan. "It is no time to declare victory,'' Mosbacher cautioned. The pact is ''just a step forward and no more than that'' and will require follow-up work from both sides, he said in an interview with United Press International.

Rep. Richard A. Gephardt (D-Mo.), the House majority leader, took issue with the trade pact. "The agreement will do little or nothing to address the size of the trade deficit or the systematic targeting of key U.S. industries,'' he said.

Sen. Lloyd Bentsen (D-Tex.) said the worth of the agreement can be measured only by ''hard trade results. In that sense, the jury is still out.''

The pact took four days of marathon negotiation to complete instead of the expected two days because of disagreements over how much money Japan should spend on public works and how often the two sides should meet to review progress made on the commitments in the report.

On public works outlays, which the United States hopes will fuel a spending boom in Japan that would include more purchases of foreign-made goods, the Japanese proposed spending $2.7 trillion over the next 10 years. U.S. negotiators had said that level of spending would have no effect on the economy, and eventually the two sides agreed on about $3 trillion.

Japan also agreed to reduce the amount of time needed to obtain a patent, enact new laws to reduce land prices in part by allowing more building in urban areas, strengthen enforcement of antitrust laws and stiffen penalties for violations of the nation's anti-monopoly act.

The government also will attempt to reduce the power of Japan's huge business groupings, which often lock foreigners out of the country's markets, by restricting cross-shareholdings and increasing public disclosures about transactions within these groupings. It also will ease some laws that hamper direct investment in Japan by foreigners.

On the U.S. side, the government agreed that its top priority was to eliminate the budget deficit and said it would be willing to raise taxes to do so, as President Bush announced this week. It also said it would push to increase savings in the United States through new "family savings accounts" and by enhancing existing individual retirement accounts.

The U.S. government also promised to declare its support for continued foreign investment in the United States and to seek to ensure that Japanese investors are not singled out by Congress for unfair tax treatment. It also pledged to strongly promote exports, especially to Japan, and to work to improve American education.

At the insistence of the United States, the negotiators agreed to hold follow-up meetings to review progress made in implementing all the commitments. An annual report on progress would be made in the spring.