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Is the use of 'broke up' correct in the following sentence? Is 'broke up' as good as 'broke down' in such a sentence talking about a negotiation? I always seem to get confused about 'break up' and 'break down'.
No.
Negotiations break down
Relationships break up.
Schools break up for the holidays.
In your sentence, "negotiations broke up' he has confused this with some idea of 'the negotiators broke up and talks ceased' - if this is not some temporary recess, then we would say, 'the negotiations broke down'.
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break up, break down 
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