Brazil, EU upbeat on prospects for WTO trade deal

BRUSSELS, July 5 (Reuters) The presidents of Brazil and the European Commission today sounded upbeat about the chances for a global free trade deal, despite recent setbacks in the long-delayed negotiations.

''I am leaving Europe convinced that we will get agreement,'' Brazilian President Luiz Inacio Lula da Silva told reporters at the end of a two-day visit in Lisbon and Brussels.

''Of course we have had so many problems, but now we have such a positive environment and understanding that we must move forward,'' Lula said.

European Commission President Jose Manuel Barroso said the European Union was also convinced that a deal could be done in the World Trade Organisation's (WTO) Doha round of global free trade talks.

Hopes for a deal took a big hit last month when a meeting between the EU, Brazil, the United States and India collapsed acrimoniously in Potsdam, Germany.

WTO boss Pascal Lamy has said without a breakthrough soon, the round could be put on hold for several years.

The next big test for the round is expected later this month when diplomats chairing discussions on trade in farm and industrial goods put forward proposals on how the deadlock might be broken.

A ministerial meeting could then be called as early as September at the WTO's headquarters in Geneva in a new bid for a breakthrough, trade officials have said.

REUTERS SY HS2135