Argentina's moves to restrict imports and prop up its shrinking trade surplus could hurt talks for a trade deal between South America's Mercosur bloc and the European Union, an EU official said.

In May 2010, the two sides relaunched talks that had been on hold for six years with the aim of creating the world's largest free-trade zone with 750 million people and traded goods valued at 65 billion euros ($82 billion) a year.

South American resistance to strict rules on intellectual property and strong opposition from European farmers fearful that cheaper imports from their South American competitors will swamp their markets are seen as the main obstacles to a deal.

But Gustavo Martin Prada, director for Latin America at the European Commission, said on Wednesday that Argentina's bid to cool import growth could also hinder the talks.

"Creating new trade barriers is not good for the negotiations," he told reporters in Buenos Aires.

Martin Prada said that even though the import limits have not significantly hurt trade between the blocs, they could further complicate "already difficult talks."

This month, Argentina expanded the number of foreign goods subject to import permits by 50 percent, angering the country's Mercosur partners Brazil, Uruguay and Paraguay.

The Argentine trade surplus has been narrowing as imports surge due to strong domestic demand and the peso currency's appreciation in real terms, although February trade data was stronger than expected.

Argentina is supposed to approve the import permits promptly but some importers complain the process can take up to 300 days, amounting to a de facto trade barrier.

Martin Prada said the European Union hopes to sign a deal with Mercosur later this year or in 2012. A new round of formal talks in which the sides will discuss proposals on all the issues under negotiation is scheduled for May in Paraguay. (Reuters)