The European Union and Latin America's Mercosur bloc will exchange improved offers on linking their markets by early next week in a last-ditch bid to wrap up trade talks by an October 31st deadline.
EU Agriculture Commissioner Mr Franz Fischler said that if the two sides agreed to move ahead on the basis of these offers - which may be exchanged as early as Friday - there could be a round of negotiations in Brazil on October 20th.
The hope is that a pact would boost trade between the 25-member EU and Mercosur, which groups Brazil, Argentina, Uruguay and Paraguay, from its current $40 billion a year.
Negotiations between the blocs have dragged on for more than five years, snagging on key areas such as farm trade and industrial goods and even how talks should proceed.
Mercosur says a deal is unlikely unless Europe improves market access for farm products, one of its top exports.
The EU has offered to phase out tariffs on 91 per cent of imports from Mercosur, while for the remaining nine per cent - a list of "sensitive" farm products such as sugar and beef - it has proposed tariff-rate quotas as a way of increasing access.
The quotas are based on the so-called single pocket principle, meaning that volumes will be split - mostly 50-50 - into an immediate share under the EU-Mercosur talks and a later share that will depend on the World Trade Organization's Doha Round of trade talks.
Under this principle, any possible additions to the initial EU-Mercosur quota would reduce the available volume for preferential access in the second set of negotiations.
The EU says it has yet to see adequate offers from Mercosur in areas such as industrial goods, services, state contracts and geographical indications - protected brand names of famous food products such as Parma ham and Roquefort cheese.