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Last Updated: Thursday, 11 May 2006, 19:52 GMT 20:52 UK
Austria hosts EU-Americas talks
Peruvian President Alejandro Toledo shoots the ball at a charity football match at the start of the summit
A summit of Latin American, Caribbean and EU countries is getting under way in the Austrian capital, Vienna.

The trade talks are expected to be overshadowed by concerns over Bolivia's decision to nationalise its gas sector.

Ahead of the talks, Bolivian leader Evo Morales vowed that foreign oil and gas firms would not be compensated for assets now under state control.

It was once hoped the summit would push forward trade alliances between the EU and Latin American countries.

But the talks are more likely to highlight the growing divisions within South America over free trade.

The summit kicked off on Thursday afternoon with a charity football match which pitted European leaders against their Latin American and Caribbean counterparts.

Among those playing were Austrian Chancellor Wolfgang Schuessel, Turkish Prime Minister Recep Erdogan and Peruvian President Alejandro Toledo.

No compensation

The recent move by Bolivia's president to nationalise the country's natural gas industry shocked not only the region, but also some of Europe's energy companies.

"If we were to expropriate their assets, there could be talk of compensation," Mr Morales told reporters ahead of the start of the Vienna summit. "But that's not the case."

Foreign firms had exploited Bolivia's natural resources, he said.

"For more than 500 years, our resources have been pillaged. This has to end now," he said. "What we are looking for ... are partners - not bosses to exploit our natural resources."

He said foreign firms would be allowed to recover their investment in Bolivia and some earnings, but that they would not be compensated because they could not own the country's natural resources.

Hopes for a breakthrough in trade relations took a blow earlier this year after Venezuelan President Hugo Chavez's decided to withdraw from the Andean group of trading countries.

EU negotiations with the Mercosur group of Argentina, Brazil, Paraguay and Uruguay are also on hold, pending the outcome of the World Trade Organization's Doha round.

Despite Mr Morales' comments, media reports suggested the EU had agreed to open negotiations with six central American countries over a free-trade zone.

Quoting from a draft text of the decision, Agence France-Presse said the deal was to be announced on Friday.

The countries involved include Costa Rica, Guatemala, Honduras, Nicaragua, Panama and El Salvador.

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