Mexico’s top trade official is traveling to Japan this week as the Latin American nation seeks to diversify exports and investment amid an impasse in Nafta talks.

Economy Minister Ildefonso Guajardo said he still sees a high chance of a deal to update the North American Free Trade Agreement, but that the U.S., Canada and Mexico will need to show flexibility. The three sides will strongly engage next month, Guajardo was quoted by Reuters as saying on Monday in Tokyo, where he will meet Japanese officials and business leaders.

Nafta talks are on the back burner ahead of Mexico’s election on July 1, according to a person familiar with their timing, who asked not to be named citing private conversations. Uncertainty about the future of the trade deal increased this weekend after President Donald Trump clashed with Canadian Prime Minister Justin Trudeau just after a Group of Seven meeting ended in Canada.

Japan Ties

Guajardo will meet with Japan’s foreign minister as well as the minister of trade and commerce, his press office said in an emailed statement.

The world’s third-largest economy is the biggest market in the trade pact that succeeded the Trans-Pacific Partnership, which the U.S. abandoned a few days after Trump took office last year. The new deal, known as Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP, was agreed on by 11 nations in March and approved by the Mexican Senate in April.

Deepening ties with Japan and the other nations in the Pacific deal is part of Mexico’s push to diversify exports. Currently, 72 percent of the nation’s $435 billion in goods sold abroad every year go to the U.S. The nation also reached a deal in April to update its almost two-decade-old free-trade agreement with the European Union and is working to make inroads to China, Brazil and Argentina.

Japanese automakers including Nissan Motor Co., Honda Motor Co. and Toyota Motor Corp. have plants across Mexico, and the nation has received more than $14 billion in foreign direct investment from Japan over the past two decades. That makes Japan the biggest Asian investor in Mexico, according to data from Mexico’s economy ministry. Still, Japan bought only 1.3 percent of Mexican exports in 2017, about half as much as China and trailing the U.S, Canada and the European Union, according to data from the International Monetary Fund