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Japan and Mexico have made progress in ironing out differences over farm trade toward a free-trade agreement.

Sources said Tuesday that Mexico welcomed a proposal by Japan to establish low-tariff import quotas for orange juice, a major breakthrough following stalled negotiations.

Orange juice, oranges, pork, beef and chicken are the five key agricultural products the two countries have been unable to agree on.

Angel Villalobos, Mexican vice minister of economy in charge of international commerce, said in a recent interview that important progress has been made in resolving differences thanks to Japanese concessions in working-level and vice-ministerial talks in January.

The two sides must now decide whether they will conclude an FTA by the end of March, a deadline proposed by Mexico. Working-level talks are to begin Wednesday in Tokyo and run through March 5.

The sources said the two sides will also work to narrow the gap over market access for steel and automobiles from Japan.

In the previous round of negotiations, Japan proposed the establishment of a low-tariff import quota of up to 6,500 tons of orange juice, and offered similar import quotas for oranges, beef and chicken.

But Japan and Mexico have not bridged the gap over how to treat pork exports from Mexico. The sources said the two countries will likely finalize their views at a ministerial meeting.

The two countries will try to map out procedures for market access under an FTA during the working-level talks.

Senior officials of both countries, including Villalobos and Ryuichiro Yamazaki, the ambassador for international economic affairs, are expected next week to discuss market access for Japanese steel and automobiles, and Mexico’s request to expand export quotas of its leather products to Japan.

Economy Secretary Fernando Canales has said Mexico will halt FTA talks with Japan if the two countries cannot reach an accord by the end of March.

Due to the tight schedule, the working-level meeting might be the final round of such negotiations ahead of a ministerial meeting.

The two countries had planned to seal an FTA during President Vicente Fox’s visit to Japan in October. But they missed the target due mainly to differences over how to treat imports of the five farm products from Mexico.

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