The politically sensitive textiles issue is holding up negotiations over the creation of a free-trade area linking the US and Central America.

As a result of discussions on Wednesday, it seems the Central American countries believe that the market-opening offer the US made for textiles would give them fewer benefits than they already enjoy.

It therefore look unlikely that differences will be resolved this week - meaning that discussions will extend into January 2004.

The US textile industry fears that the Central American Free Trade Agreement (CAFTA) deal would expose the US industry to increased foreign competition.