(Updates throughout with news conference, trade)

By Axel Bugge

LISBON, July 4 (Reuters) - The European Union invited Brazil on Wednesday to join a small group of strategic partners in a move European leaders hoped could reinvigorate struggling world trade talks in which the South American giant plays a key role.

A strategic partnership with Brazil would put its relations with the EU on the same level as the other main emerging giants -- China, Russia and India -- and revive a historic partnership, said Brazilian President Luiz Inacio Lula da Silva.

The partnership was agreed at the first summit hosted by Portugal since it took over the rotating, six-month EU presidency on Sunday, pledging to boost links with its former colony and Africa.

"As I am a man of faith, I believe this EU-Brazil partnership could resolve many problems that existed yesterday but don't exist today," Lula, who has raised Brazil's global profile since coming to power, told journalists.

"This agreement is of interest to all of South America and to Mercosur," Lula said, adding it could pave the way for a trade deal between South American trade group Mercosur and Europe.

Under the agreement, there will be yearly summits between the EU and Brazil in order to work together on issues like climate change and renewable energy such as biodiesel, of which Brazil is a leading producer.

Trade talks between Mercosur and the EU are on hold pending an outcome of struggling global trade talks at the World Trade Organisation in the so-called Doha round.

BRAZIL, EUROPE WORK FOR DOHA

But European leaders said the talks with Lula could revive Doha.

"This summit managed to relaunch the (Doha) negotiations," Portuguese Prime Minister Jose Socrates said. European Commission President Jose Manuel Barroso said Europe and Brazil would work together to revive Doha.

Trade talks in Germany at the end of June between the United States, Brazil, India and Europe collapsed over disagreement on European and U.S. farm subsidies and tariffs and concerns by poor countries of opening their markets to industrial goods.

Lula said negotiators had to sit down "with maturity" at the negotiating table again.

"In negotiations it is not worth getting nervous or irritated," said Lula, who has championed poor countries' increased access to rich country markets in the Doha talks.

"Brazil will work tirelessly to construct numbers that are factual for everybody around the table, just as long as we remember that the most important thing is that poor countries need to gain the most and rich countries the least," he said.

Socrates said the upgrading of ties with Brazil would give coherence to EU foreign policy by now including all the so-called BRICs -- Brazil, Russia, India and China.

Brussels sees Brazil as a key player in the fight against global warming, one of the EU's priorities.

In a sign of Portugal's determination to take advantage of the potential for alternative energy, oil company Galp Energia signed on Wednesday an agreement with Brazil's Petrobras to produce 600,000 tonnes of vegetable oils in Brazil.

Brazil is a world leader in production of biofuels and EU leaders agreed in March to a target for biofuels to represent at least 10 percent of vehicle fuels by 2020.

Brazil is the EU's main trading partner in Latin America.

Trade with Brazil totalled around 39 billion euros ($53 billion) in 2005, the EU importing 23 billion euros, mostly agricultural products, and exporting 16 billion, according to the European Commission.

(Additional reporting by Ruben Bicho and Julie Scheier)

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