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BRASILIA/BRUSSELS (Reuters) -Splits within South American trade bloc Mercosur have dampened hopes in the European Union of a trade deal, which could fall apart if it does not get done by the end of the year, diplomats and members of the European Parliament told Reuters. Two of Mercosur's four countries have yet to reply to an addendum in which Brussels included environmental safeguards to address reservations by many EU member states, diplomats said. Many had hoped for a swift conclusion to the trade deal under President Luiz Inacio Lula da Silva, who overhauled Brazil's environmental policies to protect the Amazon rainforest since taking office this year.

New delhiBruxelles capitaleUnited statesDistrito federalThomas waitzRichard changGuillermo valles galmPhilip blenkinsopLuiz inacio lulaDaniela desantisAnthony boadleBernd langeLucinda elliotBrad haynesJavier mileiA european parliament