MONTEVIDEO. Uruguay. Aug 7: Brazil, the world's eighth-largest economy, will not accept 'managed commerce" within Mercosur, Brazilian Foreign Minister Luiz Felipe Lampreia said at a meeting called to resolve an impasse in the South American trade bloc, says Reuters.

"We do not accept managed commerce." Lampreia said as he marched briskly through the marble lobby of Mercosur headquarters in the Uruguayan capital on the shores of the massive River Plate estuary.

Economy and foreign ministers from Brazil. Argentina. Uruguay and Paraguay debated solutions to the effects Brazil’s 30 per cent devaluation in January has had on relative prices and trade.

Argentina backed down on unilateral import quotas last week but not before Brazil demanded this emergency session pf Mercosur's council of minis-s fers arid postponed talks oh' auto trade, a key source of Argentine Industrial exports to Brazil.

Argentine. Economy Minls-

ter Roque Fernandez was the first to break from the talks but brushed aside reporters' questions.

Time and .again since the meeting began on Thursday Brazilian officials from the foreign trade secretary to the chief trade negotiator to Lampreia said they will not accept Argentine protectionism.

Brazil called for the meeting of the world's third-largest trade bloc last week in response to Argentine plans to impose quotas on imports of textiles, shoes and clothes from Brazil.

A meeting between trade negotiators on Thursday was deadlocked over Brazil's free-market stand and Argentina’s call for temporary export caps or Import quotas.

Trade patterns and balances have tilted within the Si trillion market of 200 million consumers since Brazil's devaluation; adding urgency to the idea ' of trying.tomorrow ^.e differ-. f' ■eiice^hrtwetm meregion's ifis-parat'e economies as a means of avoiding future accidents like Brazil's devaluation.

The dilemma we're suffer-

Ing now is from a major diver-Eence in macroeconomics." ruguayan President Jose Maria Sanguinetti said at a news conference.

Uruguay was forged from a peace treaty between Brazil and Argentina jn the last century and now ships 55 per cent of its exports to Mercosur. Sanguinetti urged the pact's domL nant members to reach a compromise.

Argentina is also angry over Brazil's use of subsidies and tax breaks, such as a $ 100 million annual tax break offered to Ford Motor Co in July to set up a new assembly plant.

Trade within Mercosur totalled $15 billion worth of goods and services in 1998. But Argentina's exports to its partners, almost all of which go to Brazil, fell 27 per cent in the first five months of the year.

Argentina has seen a sharp rise in steel bar. apparel and shoe imports from^jhfeibe tween,January and Jtjne. government trade and customs statistics show.

Chile and Bolivia are associate members of Mercosur.