“There is no use beating around the bush, this meeting has collapsed, members have simply not been able to bridge their differences,” the World Trade Organization’s Director-General Pascal Lamy told journalists.

And the reason being given for the collapse of this seven year long set of trade negotiaions is India and the USA’s failure to reach an agreement on an SSM or special safeguard mechanism that allows countries to raise tariffs to protect their farmers from a surge in imports. But according to the Age it may be more complicated than that.

India and other developing countries wanted the mechanism to kick in at a lower import surge level than has been proposed in order to protect their millions of poor farmers from starvation.

Others wanted it to take effect at a higher rate so as not to hurt exporters.

Sources said after Tuesday’s breakdown that the United States was stalling for time to avoid a rift over another sticking point, cotton subsidies.

“The US cannot afford to give way on cotton, so it does not even want to go into the issue on cotton,” an Asian diplomat told AFP.

“It knows that India would not give ground on SSMs, in which case India would be blamed in case of any collapse.”

Radio New Zealand reported this morning that another part of the problem was the wealthier industrialised countries continual push to open up the services sector to private investment.

While most people can see the logic in putting a fair transparent set of rules around the international trade of goods, the services sector is far more tricky.  Countries like New Zealand, that have pushed had and fast on services as though they are nothing more than trinkets to be bought and sold, rather than integral components of communities’ public infrastructure (for instance, water, power, education, health care and waste management) have failed the WTO.

Their (our) desire to push the WTO along at breakneck speed – if you can describe anything that happens in the WTO as happening at breakneck speed – has undermined its credibility in the international arena and made it impossible for countries to respond with anything but very protectionist negotiating strategies.

This collapse should be as good a sign as any that the current ‘business first, community and democracy distant second’ model for the WTO is flawed and needs a serious overhaul.  This is important because the alternative to the WTO could well be a range of even less democratic bilateral and multilateral deals such as the New Zealand-China preferential trade agreement.