By Steve Kingstone BBC correspondent in Sao Paulo

Brazil's foreign minister Celso Amorim says talks with the US were 'productive'

But its own position on the proposed trade zone has often seemed confused. Opinion is split as to whether it is in the country's best interests to sign up to a deal involving the US.

Shoe manufacturer Alpargatas is one of many Brazilian companies that stand to gain from the removal of trade barriers.

"We want to sell a new range of football boots in the United States," says Paulo Lalli, a company director.

"But at present each pair would carry a tariff of 12.5 percent. If the Free Trade Area of the Americas happens we'll be much more competitive."

Other potential winners include Brazilian fruit growers, sugar producers and textile manufacturers.

With the level playing field of free trade, each sector believes it could compete successfully in the United States.

Stand off

On the other hand, there are fears about a flood of American imports.

"Brazil's service industries would suffer from FTAA," says Fernando Ribeiro, chief-economist at the SOBEET, a think-tank in Sao Paulo.

"Financial services, pension providers, health and education services - all these things could be swallowed up by American companies. They have already learned how to operate in a post-industrial economy."

Mindful of those fears, the Brazilian government has tried to limit the scope of any agreement.

It would prefer that rules covering services, investment and intellectual property were kept out of these negotiations and left to the World Trade Organisation.

That's a direct response to hard bargaining from Washington.

The USA refuses to discuss anti-dumping legislation and the generous subsidies paid to American farmers, arguing that these issues should be resolved as part of a broader international agreement.

Until recently, Brazil was insisting that farm subsidies were central to the FTAA debate.

The tensions between the two governments have been simmering for several weeks. A month ago it looked as if the Miami summit might end in a Cancun-style collapse.

Breakthrough hopes

But suddenly the Brazilians are sounding more optimistic.

The change of tone follows a visit to Washington earlier this month by Brazil's foreign minister, Celso Amorim.

He met America's trade negotiator, Robert Zoellick, and both men described the talks as productive.

"I was encouraged," Mr Amorim told reporters. "The element of flexibility, that we have defended for some time, was understood."

By 'flexibility' the Brazilians mean the freedom of individual countries to sign up to parts of any agreement, while avoiding issues they find objectionable.

With Washington still talking of a 'comprehensive agreement,' the room for compromise will only become clear in Miami.

The attitude of other South American governments will be crucial in determining whether Brazil agrees to a deal or acts as a road-block.

Many smaller nations are desperate to increase their trade with the United States. They would probably prefer to reach an agreement on Washington's terms than run the risk of this process collapsing.