GENEVA (AFX) - The world's major trade powers failed in last-ditch talks Saturday to make any progress on a new global trade treaty that was hoped would lift millions of people out of poverty.
European Union trade chief Peter Mandelson warned the long overdue deal to lower trade barriers was at 'five minutes to midnight' as an exasperated Kamal Nath, India's trade minister, left early and almost all other key negotiating countries blamed each other for the lack of progress.
'This has not been a successful meeting but nor has it been a disaster,' said Mandelson.
'If, however, we do not turn things around in the next two weeks we will not make a breakthrough this summer and then we will be facing defeat.'
Nath was more forthright. 'There's no need to pretend that this has not been a failure,' he said before departing early, skipping an afternoon session.
The Doha round of trade talks, named for the Qatari capital where it was launched five years ago, is already two years behind schedule and the World Trade Organization has warned its failure would cost the global economy billions of dollars in growth.
World leaders, including President Bush, have pledged their commitment to the talks, but most countries have rigidly stuck to the same positions they have maintained for months.
'If necessary, we should be ready to raise the level of the talks to involve the political leaders around the world who hold the key to success or failure in the round,' said Mandelson, echoing earlier calls from Brazil and others for a meeting of heads of government to spur progress.
Mandelson said it was possible that such a meeting could take place alongside the Group of Eight summit scheduled for mid-July in St. Petersburg, Russia.
Unless a blueprint for a binding treaty is agreed to this summer, diplomats say, the whole process may have to be put on ice until after U.S. presidential elections in 2008 because Bush's fast-track authority to strike trade deals expires next year.
Without that measure, which requires an up-or-down vote without amendments, it would be much harder to gain congressional approval in the United States, the world's largest trading power.
Nath put the blame for the impasse squarely on the shoulders of rich countries as more than 60 ministers -- a third of the 149-member World Trade Organization -- met in Geneva.
'I'm willing to negotiate commerce, but subsistence, livelihood and security I will not be willing to negotiate,' he added. 'We shouldn't even be asked to.'
The complex talks have stalled as poorer countries demand the EU and United States offer greater cuts in support for American and European farmers. The U.S. and EU in turn want major developing countries like Brazil and India to allow more foreign competition in their industrial and services sectors.
Sniping between the EU and U.S. has also held up the round.
The United States, which faces opposition from Congress and powerful farm lobby groups to further opening up its agriculture market, said it made a 'bold' offer last year to reduce the subsidies it pays its farmers.
'We came to Geneva to seek a breakthrough,' said U.S. Trade Representative Susan Schwab on the third day of talks.
'The experience of the last several days has been somewhat disheartening,' she added.
As the mainstay of many poor and developing countries, farm trade has become the biggest stumbling block in the talks because those nations face steep tariffs on their exports to several rich nations. Those costs are compounded by subsidies paid to farmers in wealthy countries, which encourage excess production and lead to a swamped market.
Schwab said that a U.S. offer in October to cut government subsidies to its farmers has not been matched by other negotiators.
'Just last October, the United States took a risk ... by putting on the table a major agricultural offer, expecting that it would be matched by similar bold moves by others,' she said. 'Regrettably, that hasn't happened yet.'
Critics claim Washington has offered only marginal reductions.
International relief agency Oxfam has said the U.S. offer is a smoke screen that lowers the theoretical ceiling on subsidies while actually allowing for an increase in spending from $19.7 billion in 2005 to $22.7 billion.
Mandelson said that $15 billion in subsidies might be a good starting point for negotiations.
Associated Press Writer Bradley S. Klapper contributed to this report.
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