(Updates with rosewood, Brazilwood, reactions)

By Anna Mudeva

THE HAGUE, June 7 (Reuters) - Bids to curb logging of South and Central American cedar and rosewood trees, the source of some of the world's most valuable timber, failed on Thursday at a United Nations wildlife meeting.

Germany, acting on behalf of the European Union, withdrew proposals requesting the Convention on International Trade in Endangered Species (CITES) regulate cedar and rosewood trade, after strong opposition from central and south America.

Brazilwood, used to produce violin bows, was the only tree species to win tighter protection after Brazil sought trade curbs at the June 3-15 meeting in The Hague.

The EU and conservationists had argued the cedar and rosewood, both used to make furniture and musical instruments, needed protection due to a significant depletion in numbers resulting from too much logging, some of it illegal.

But Mexico and south American countries, where cedar and rosewood logging is a lucrative business, said there was not enough evidence to suggest the trees were in danger.

"The species is not in danger in Mexico," said Ramon Carrillo Arelano of the Mexican delegation at CITES. "We need to collect data and make a research first. If it proves that the trees are in danger, then we would support a listing".

As a compromise, the CITES delegates decided to set up a working group comprised of south American countries, which would debate the potential threats and possibly come up with alternative measures to protect the trees.

"A bad signal would have been if the whole issue had crashed here with a negative vote," Jochen Flasbarth of the German delegation at CITES told reporters. "The range states want to be in the driving seat and that is fine with the EU."

The Spanish cedar or cedrela, which has been harvested for at least 250 years, is esteemed for its aromatic and pink-tinged timber which is resistant to insects and rots.

The EU had sought to have cedar listed on CITES Appendix II that regulates international trade in animal and plant species.

The bloc had wanted similar listings for black rosewood, which is often traded under the name of cocobolo and grows in dry tropical forests from Mexico to Panama, and Honduras rosewood that grows in Belize, Guatemala and Mexico.

Conservationists said it was now possible it would take years to get the trees protected. It took over ten years for mahogany to be listed on CITES.

"We are very disappointed. We missed a big opportunity on cedrela at this meeting," said Ximena Barrera of WWF.

Despite domestic efforts to create protected areas for cedar and regulate use, illegal logging is reported in Peru, Honduras, Nicaragua, Ecuador, Bolivia, Mexico, Guatemala and Venezuela, the Species Survival Network said.

Peru and Bolivia are the world's biggest cedar exporters, while Mexico and the United State are the largest buyers.

CITES, whose restrictions were once aimed at exotic species like leopards and parrots, is now focusing on more commercially important animals and plants.

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