The Brazilian government wants to extend a restrictive auto quota with Mexico for up to five years, sources close to the negotiations said. A renewed quota would avoid the free trade of vehicles set to begin when the current agreement expires on March 19. The two biggest economies in Latin America began closed talks last week over the accord signed in 2012, which limits vehicle exports from Mexico to Brazil. Negotiations will restart in Mexico, whose government is pushing for the restrictions to be lifted, as per the original agreement. The wrangle underlines a widening gap between Mexico, which is aiming to open up its market amidst a car production boom, and Brazil, which is attempting to protect its struggling auto sector. Last year, Mexico passed Brazil to become the number one auto producer in Latin America. One of the sources said on Wednesday that Brasilia last week asked to maintain the quota system for five years, but that the Brazilian government has not provided Mexico with specifics. Another source said late on Tuesday that Brazil, grappling with an economic slowdown and a drop in the price of raw material exports, is thinking of asking Mexico to extend the quota for three to five years. "The (Mexican) industry is pressuring the Mexican government. They will have to play hardball at the negotiating table," the source said, anticipating that although "there will be a lot of drama before the negotiations are over" Mexico will end up accepting an extension of the quotas. Meanwhile, other sources in Brazil have said that the government wanted the quota to be even more restrictive. On Tuesday, Mexican Economy Minister Ildefonso Guajardo declined to respond to a question about whether Brazil had proposed to reduce the quota last week. Brazilian trade chief Armando Monteiro told reporters that he had confidence that Mexico would extend a quota system that would "benefit both countries." (Reuters)