MercoPress. South Atlantic News Agency

Brazil president urged to act on Argentine quotas.

Luiz Inácio Lula da Silva, president of Brazil, came under increasing domestic pressure on Wednesday to take a tough stance against trade restrictions that Argentina adopted last week on selected Brazilian products.

Buenos Aires imposed a temporary 21 per cent tariff on television sets and an import licence for white goods, although it postponed their implementation pending bilateral negotiations.

Brazilian industry and labour leaders harshly criticised their southern neighbours this week, saying they were seeking unrealistic quotas on Brazilian imports.

São Paulo metal workers protested on Monday and demonstrated on Wednesday in front of the Argentine consulate, calling on Mr Lula da Silva to intervene.

The president, himself a former metalworker and union leader, is now caught between siding with Brazilian workers or giving in to Argentine demands as part of his aim to strengthen Mercosur, the South American trade block. Mr Lula da Silva has been an adamant defender of regional integration and has been applauded by several neighbours for his consensus-building efforts.

His administration offered last year to finance infrastructure projects in neighbouring countries and even Argentine exports. Last month he said Brazilians should pay more for imports if that helped needy countries in the region.

Patience at home is growing thin. "Measures like this strain bilateral relations," said Armando Monteiro Neto, head of the national industry confederation (CNI). "If the [Argentines] continue to use force, the Brazilian government will obviously have to intervene."

Germano Rigotto, governor of Rio Grande do Sul, the country's southernmost state, travelled to Braslia yesterday to press the government to help reverse the Argentine trade measures.

One placard at the demonstration in São Paulo read: "The [Argentine] brothers are in crisis and the Brazilian worker pays for it."

The protests also marked the beginning of the campaign for October's municipal elections. The Sao Paulo metalworkers belong to the Força Sindical, a union federation which is trying to oust the city's mayor, who belongs to Mr Lula da Silva's Workers' party.

Brazilian entrepreneurs embarked on Wednesday on a last-ditch negotiating effort with their Argentine counterparts in Buenos Aires.