Brussels, 22/03/2001 (Agence Europe) - On Thursday, on the sidelines of EU/Mercosur negotiations, the head of the Brazilian delegation, José Alfredo Graça Lima, was to meet the Director-General for Trade at the Commission, Peter Carl, to discuss their different opinions over Brazilian exports of soluble coffee to the EU. Both parties opened consultations on the subject last November in the context of the first phase of dispute settlement procedures at the WTO (see EUROPE of 26 November 2000). Brazil challenges the eviction of its exports of soluble coffee from the general system of preferences on 1 January 1999, while preferential tariffs are granted to countries that produce drugs to encourage alternative crops. The EU had first of all proposed an import quota of 9,000 tonnes, while Brazil requested 15,000. The EU is now said to have proposed a progressive quota of 9,500 tonnes the first year, 11,500 the second and 13,500 the third. Brazil was still to give its stance on this offer this week. The Brazilian coffee industry, which had put pressure on for consultations to be opened on this subject with the EU, seems, on the other hand, to be reticent about the idea of asking for a panel to be formally opened, as a "dispute settlement procedure could cost up to $50,000", notes a Brazilian observer.