U.S. Builders May Get More Jobs in Japan : Trade: Three years of negotiations to help American firms gain access to that nation’s huge construction market may pay off soon.

WASHINGTON — U.S. and Japanese negotiators have made significant progress in talks aimed at giving American firms more access to government construction jobs in Japan and could reach agreement in time to avert threatened sanctions, a senior U.S. official said Thursday.

The discussions, under way for three years, are intended to resolve longstanding complaints that U.S. firms are shut out of Japan’s enormous construction market.

In particular, American companies have objected to an informal system, known as dango, under which Japanese firms allegedly conspire to award each other business and keep outsiders from getting a toehold in the Japanese market.

In late April, U.S. Trade Representative Carla Anderson Hills announced that Japanese firms would be barred from bidding on U.S. government contracts if the two sides could not reach an agreement within 30 days on the issue.

The threatened sanctions would be the first imposed on Japan since 1987 and would represent a marked escalation of the economic tensions between the two countries. Japan already has announced that it would retaliate by canceling an agreement under which it set aside parts of 17 major projects for bidding by foreign firms.

Among the U.S. firms that won those contracts were Irvine-based Fluor Corp. and San Francisco-based Bechtel Corp.

The talks will resume in Tokyo on May 20, only days before the 30-day deadline after which sanctions would take effect.

In recent weeks, officials from the two sides were able to develop the broad outlines of an agreement, according to a senior Commerce Department official, who spoke on condition that he not be identified. It will include a written recognition by Japan of the need to open its markets and a pledge to require bidders to verify in writing that they will not practice dango .

Further, the official said, the agreement would stipulate the types of contracts--including road, sewer and environmental projects--that might be opened to foreign bidders.

The two sides have been unable to agree, however, on a list of specific projects to be set aside for foreign bidders. A proposal submitted by Japan two weeks ago fell significantly short of what Bush Administration officials had hoped to see. They plan to draw up a counteroffer to take to Tokyo.

“Numbers don’t matter as much as the quality of the projects. We want projects that U.S. firms can get actively engaged in over the next year,” the official said. In particular, he added, Washington hopes to include projects in which American firms will be allowed to participate in the early stages of putting together proposals and designs.