Japan and the European Union are holding talks this week to try reach a broad free trade agreement that would help Japanese automakers and suppliers export more products to EU markets.
Japan is seeking cuts in EU tariffs on Japanese autos, auto parts and electric devices. Tokyo also wants the EU to cut red tape it says Japanese companies face doing business with the EU.
Japan, for its part, could ease the process for foreign companies bidding on construction and materials procurement for public entities, the Nikkei business daily said.
The EU wants Japan to scrap tariffs on agriculture products such as cheese and wine and lower duties on pork, according to the report. Brussels has also complained about non-tariff barriers to auto imports
The EU will likely scrap duties on about 80 percent of auto parts imported from Japan by amount of trade immediately after a bilateral accord goes into effect, but Japan wants further concessions, the Nikkei reported on Wednesday.
Japan and EU officials are seeking an agreement by the end of the year, Japanese government officials said.
The two-way trade talks have taken on greater significance after U.S. President-elect Donald Trump said Washington would withdraw from the Trans-Pacific Partnership, a 12-nation deal Prime Minister Shinzo Abe has said is key to his reforms and once a pillar of Washington's pivot to the Asia-Pacific.
"Prime Minister Abe has said he aims to reach an agreement this year," said a trade official who declined to be identified because he was not authorized to speak to media.
If the two can work out the framework for a trade deal, EU Trade Commissioner Cecilia Malmstrom will visit Japan next week for talks with Japanese Foreign Minister Fumio Kishida, the Nikkei said.
Tokyo last week ratified the TPP despite Trump's pledge to pull the U.S. out of the TPP pact, which does not include China.