Taiwan and Hong Kong are to hold a second round of talks in Taipei on May 24 to ensure direct shipping links continue after the handover.
Chang Liang-jen, deputy secretary-general of the Straits Exchange Foundation, said he was cautiously optimistic about reaching a deal with the five-strong delegation headed by George Chao, chairman of the Hong Kong Shipowners' Association.
The first round of talks in Hong Kong on May 2 ended in deadlock over the use of flags flown by the two sides' vessels calling at each other's ports.
But the impasse was broken when members of both sides met during a shipping conference in Singapore this week.
Hong Kong insists that both sides' ships must fly flags when entering each other's waters, but Taipei believed no flags should be flown.
Mr Chao's team was now ready to accept any flags proposed by Taipei, except the official flag of the Republic of China, sources said.