Trade negotiations between the European Union and Central America have collapsed, jeopardizing the EU's bid to reach an agreement before a meeting of leaders from both regions, EU officials. The talks between the 27-nation EU and Panama, Guatemala, Costa Rica, El Salvador, Honduras and Nicaragua were suspended on Thursday after the parties failed to agree on a number of issues including imports of dairy products, EU officials said.

"Unfortunately, the trade negotiations between the EU and Central America have been put on hold since it wasn't possible to resolve a number of outstanding differences," EU trade spokesman John Clancy said in a statement.

The European Union had hoped to conclude the talks before a May 18 summit among EU and Latin American leaders in Madrid, but EU officials said it was clear that the suspension had made it almost impossible to reach an agreement before that meeting.

The suspension also slows progress by Brussels in trying to conclude regional trade agreements, given difficulties in the Doha round of world trade talks. This week, the bloc revived trade talks that had been stalled since 2004 with the Mercosur group of countries.

The EU concluded a free trade agreement with South Korea in October 2009, and launched trade negotiations with Vietnam and Singapore in March this year.

"We remain open to continuing the process to conclude the trade agreement as soon as Central America is ready," Clancy said.

Central American countries export mostly agricultural products, such as coffee, bananas and other fruits, to the European Union and import machinery, chemicals, vehicles and fuels from the EU.

Trade between the two regions stood at just over 10 billion euros ($13.4 billion) in 2008. (Reuters)