Vital World Trade Organisation (WTO) talks intended to help the developing world collapsed unexpectedly last night in Cancún after rich and poor nations failed to agree over agriculture and investment rules.

Delegates from Africa, the Caribbean and Asia walked out of the meeting, accusing wealthy nations of failing to offer sufficient compromises.

The immediate cause of the breakdown was proposed new trade rules for investment and government procurement. These were favoured by the EU, but opposed by poorer nations. The developing nations also criticised the $300 billion subsidies paid every year to the world’s wealthiest farmers.

A successful deal at Cancún could have lifted millions of people out of poverty. The failure also means that the faltering global economy will not receive the jumpstart it needs.

The WTO will now almost certainly fail to make the self-imposed deadline of January 2005 for reaching a new agreement that dismantles global trade barriers.

The organisation has, however, pledged to hold another conference by December 15 2003 and in a statement said it planned to take action “necessary at that stage to enable us to move towards a successful and timely conclusion of negotiations.” It added that it reaffirmed all its Doha declarations and decisions of 2001 and would continue to work on outstanding issues with a renewed urgency.

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