Japanese Foreign Minister Fumio Kishida plans to travel to Brussels on Tuesday for talks on a trade accord with the European Union.

Kishida told reporters he hoped the two sides could reach a “basic agreement” after failing to bridge differences blocking a proposed Economic Partnership Agreement during last week's negotiations in Tokyo.

Japan and the EU have been working to reach an accord before a summit of the Group of 20 industrial nations later this week in Hamburg, Germany and to send a message in support of free trade, countering a US backlash against broad trade pacts.

“Based on the ministerial talks we had on June 30 and July 1, we are currently continuing tough negotiations,” Kishida said.

“Although we cannot be too optimistic about the prospect of the talks, I strongly hope to strike a basic agreement on Japan-EU EPA this time around as I head into the talks.”

“I will work up until the last minute so that we can achieve the best results for our national interest,” he said, noting there were “sensitivities” on both sides.

Cecilia Malmstrom, the European Commissioner for Trade, said Monday that she believes a deal can be reached later this week.

The hope is to announce a deal when Japan's prime minister meets EU leaders in Brussels on Thursday ahead of a summit of the Group of 20 industrial nations in Germany.

“The Japanese don't agree with some of the key technical issues (in the deal) which are fundamental for the EU, especially those referred to investment,” Malmstrom said in a speech to a conference in Madrid.
She did not go into detail.

Japanese officials have said the main sticking points are over ending tariffs on imports of cheese and autos. A deal would require finessing Japan's protections for its dairy farmers, whose home market is protected by tariffs of up to 40 per cent on processed cheese.

It's unclear just what the potential for compromise might be.

Australia and New Zealand, the biggest exporters of cheese and other dairy products to Japan, fought hard to persuade Tokyo to gradually open its market over a 15-year period during negotiations for a Pacific Rim trade pact, the Trans-Pacific Partnership.

That initiative has been imperiled by US President Donald Trump's decision to pull out of the formerly US-led arrangement. But the 11 remaining members are discussing ways to pursue a revised version without the US as the anchor.