Japan and Thailand have agreed to leave out rice from a planned bilateral free trade agreement (FTA), a breakthrough that could see a deal agreed by the end of the year, the Nihon Keizai Shimbun said on Sunday.
Thailand had pushed for the removal of duties on its exports to Japan of rice as well as chicken, sugar and starch, the paper said, but Tokyo had been reluctant to agree to free up trade in farm products for fear of hurting domestic farmers.
In recent negotiations, Tokyo said it would consider complying with Bangkok's requests on the other three categories of farm produce as long as rice was excluded, the Nikkei said, without citing sources.
Thailand agreed to that suggestion, the paper said.
Thailand provides about 35 percent of the 520,000 tonnes of chicken which Japan imports each year, the paper said. Japan also buys 17 percent of its sugar imports from Thailand.
However, a deal excluding rice may face opposition in both countries, the Nikkei said.
Thai farmers have been looking forward to increasing rice exports to Japan, while many of Japan's ruling party lawmakers are backed by agricultural interests.
If the FTA is finalised, it will be Japan's third, following agreements with Singapore and Mexico. Japan is also aiming to agree FTAs with Malaysia and the Philippines this year and with South Korea next year, the Nikkei said.
Japan is looking to increase automobile exports to other Asian countries and win their support in protecting intellectual property, the paper said.