Push for free trade in Americas

It's not all smiles between US and Brazilian officials

Emergency talks are set to start on Friday in Washington to try to get a planned free-trade deal back on track.

The aim is to settle deep differences between the Americas' two biggest countries, the US and Brazil, ahead of a 34-country summit on 17 November.

But the two remain far apart, not least on farm subsidies, with Brazil saying the US is protectionist.

The "Free Trade Agreement of the Americas" (FTAA) is meant to be signed off by the end of this year.

The Washington DC meeting is chaired by the two, but also includes 16 of the 34 countries whom the US wants included in the FTAA.

The deal is one of US President George W Bush's key economic goals.

But in the wake of the collapse of world trade talks in the Mexican resort of Cancun in September, the chances of thrashing out a deal are looking remote.

Brazil was one of three leading developing countries - the other two were India and China - who led opposition to the US, Japan and Europe in Cancun.

They demanded that the richer countries move further and faster on agricultural subsidies and tariffs before they were prepared to accept new issues such as investment protection and the trade in services.

Caution

The Cancun meltdown has left raw nerves on both sides.

The US administration, cautious of making any concessions ahead of elections next year, says Brazil is jeopardising the FTAA, which is meant to come into force on 1 January 2005.

Brazil - mindful of recent troubles for the economy of Mexico, which already has a free-trade deal with the US and Canada - insists Washington needs to put its farm subsidies on the table before anything can happen.

It claims payoffs to US and European farmers and tariffs on imports will cost it $10bn in 2003.

But despite the suspicions, some of the rhetoric was more moderate. despite pessimism from the Brazilians about the prospects for results either in Washington or at the wider Miami meeting in a week's time.

"This meeting has been asked for by (US Trade Representative) Robert Zoellick, so maybe the Americans could indicate now some possibilities of advancement (of the talks)," said Roberto Rodrigues, Brazil's Agriculture Minister.

The talks are due to begin with a dinner on Friday night.