The US appears unwilling to allow free entry for Australian sugar

Australia has set a Friday deadline for the talks to conclude.

But US reluctance to open its markets to Australian beef and sugar looks set to scupper the agreement.

Pressure from US farmers ahead of the November presidential elections also risks blocking a free trade deal with South American countries.

A Free Trade Area of the Americas has been under negotiation for months, but talks in Mexico are deadlocked over demands from Brazil and other countries for free access to US agriculture markets.

Subsidised US goods, they say, are making their own domestic farmers uncompetitive.

Last-ditch

Australia and the US are normally seen as close allies, not least because of their co-operation in the US-led war in Iraq and Afghanistan.

Some interested parties are now hoping that President George W Bush and Prime Minister John Howard will get involved in trying to rescue the talks.

But even the friendship between the two may have little chance of salvaging the deal, which has already had two deadline extensions.

Australia has threatened to walk away from the A$4bn ($3.1bn; �1.7bn) it says it will gain annually from inward investment and better terms of trade without US movement on farming and pharmaceuticals.

Meanwhile, the US administration is unlikely to back down on its support for farmers, many of whom are in key states for the presidential battle due in November.