BRASILIA South American trade bloc Mercosur will have its counterproposal to a European Union addendum to their long-overdue trade accord ready in September, Brazil's Foreign Minister Mauro Vieira said on Tuesday.

Vieira told the country's farm state caucus in Congress that Mercosur's counterproposal to the EU's so-called side letter had been delayed by a change of government in Paraguay. But the Paraguayan reply will be ready by Sept. 17, the farm caucus's leader, Pedro Lupion, told reporters.

Brazilian President Luiz Inacio Lula da Silva said during a visit to Angola on Saturday that the EU side letter contained unacceptable "threats" to penalize countries.

European negotiators have been waiting since March for a reply to their addendum. The addendum includes environmental safeguards to address strong reservations expressed by many EU member countries about the deal, which has been under negotiation for two decades.

Lupion, a lawmaker from Parana state, said the Mercosur counterproposal will include attainable goals, and called the EU side letter "inconceivable."

"The European Union guidelines for reducing the climate impacts to the level they want would make agricultural production in Brazil unfeasible," he said.

The farm caucus leader said Brazil should weigh its trade ties with the EU because the European market accounts for 16% of Brazilian food exports compared with 38% for Asia.

However, another farm state lawmaker, Jose Medeiros of Mato Grosso, told Reuters the differences over environmental issues were secondary and can be resolved.

"This accord should have been signed long ago. It's a win-win for both blocs," he said.

(Reporting by Anthony Boadle; editing by Jonathan Oatis)