Talks to renew the bloc's so-called auto regime, which sets quotas on car and auto parts trade, ended in failure Tuesday with Mercosur government officials meeting in Uruguay saying they would attempt to renew negotiations later in December.

"The best thing now will be for Brazil to strike a deal with the new Argentine government after it takes over on Dec. 10 and before Dec. 31, when the old pact expires," Jose Carlos Pinheiro Neto, president of Brazil's Automobile Producers' Association (Anfavea), told Reuters late Tuesday.Talks to renew the regime between Mercosur members Brazil,Argentina, Uruguay and Paraguay have lasted most of this year ahead of the expiration of the existing agreement at the end of this year. Brazilian officials hope Argentina's incoming government, which takes office on Friday, will spur the talks.

Pinheiro Neto said the failure of talks Tuesday did not disappoint Anfavea, which represents Brazilian affiliates of foreign car giants, such as U.S.-Based General Motors Corp. GM.N and Ford, Germany's Volkswagen and Italy's Fiat.Brazil is South America's biggest car producer and market.Pinheiro Neto said: "What has happened was an expected outcome. It is well reasonable because it's better to wait for two days until the new Argentine government takes charge than to strike a deal with an outgoing cabinet."The forging of a new pact before the current deal's expiry now falls on Argentina's Alliance government, which succeeds outgoing President Carlos Menem's Peronist administration.

The main points of discussion relate to the percentage of local auto parts in each car, import quotas and duties.