The EU and US were wrong-footed when the poorer nations stood firm against them, but where does the trade round go from here? Denis Staunton in Cancún reports

When the EU Trade Commissioner, Mr Pascal Lamy, came to face the press on Sunday after the collapse of the WTO Ministerial Conference in Cancún, he looked like a man in despair.

"I do not want to beat about the bush: Cancún has failed. This is not only a severe blow for the World Trade Organisation but also a lost opportunity for all of us, developed and developing countries alike. We would all have gained. We all lose," he said.

Of three ministerial conferences in five years, only one, in Doha, has ended in success while two - Seattle and Cancún - have failed. This week's collapse raises questions about the future of the WTO as an institution and about its ability to agree and enforce a multilateral world trading system.

Mr Lamy repeated a charge he first made in Seattle, that the WTO, which makes decisions by consensus rather than voting, is a medieval organisation. "The procedures and rules of this organisation have not supported the weight of the task," he said.

But if Cancún is a failure for the WTO, it also represents a personal failure for Mr Lamy, who is likely to leave his post when the present Commission leaves office next year. The EU approached the WTO talks with a strategy many member-states regarded as eccentric to the point of foolhardiness and it is a strategy that has ended in failure.

Mr Lamy hoped that, by agreeing to reform the Common Agricultural Policy (CAP) in advance of Cancún, the EU would be able to demand concessions from others without itself moving much further on agriculture. The EU and the US agreed a framework for agricultural subsidies that would have seen the US reducing its own domestic support to farmers - but only in the context of a broader deal at Cancún.

Mr Lamy acknowledged the collapse of the talks means that European farmers have paid the price in CAP reform but will not reap the benefit in terms of reciprocal action from the US. "We lost out on that one and it's a pity," he said.

In return for agriculture reform, Mr Lamy wanted developing countries to agree to start negotiating on the "Singapore issues" - international rules on investment, competition, transparency in government procurement and trade facilitation. As developing countries made clear that they would not accept such a move, the US stepped back, leaving the EU to be portrayed as the villain of the piece.

Both the EU and the US were wrong-footed by the emergence in Cancún of the G21, a group of large developing countries led by Brazil, India and China.

Despite the hopes and predictions of EU and US negotiators, the G21 remained united throughout the meeting and is likely to become an important player at the WTO in the future.

The WTO ministers agreed that their ambassadors in Geneva should attempt to restart the negotiations and report to them by December 15th. Mr Lamy suggested, however, that their chances of success were small. "I don't think that ambassadors in Geneva can agree to things that ministers cannot agree to in Cancún. I've never seen an ambassador in Geneva being fired for saying no," he said.

The US chief trade negotiator, Mr Robert Zoellick, made clear that Washington was not prepared to wait for the WTO to find agreement. It will instead pursue individual, bilateral trade agreements with developing countries.

"We have free trade agreements with six countries right now. And we're negotiating free trade agreements with 14 more. All our free trade agreement partners, some quietly, some more actively, tried to help over the course of the past couple of days. The results are very revealing to me, that over the past few days, a number of other developing countries, that are committed to opening markets and economic reforms, expressed their interest in negotiating free trade agreements with the United States."

The Doha Development Round is due to be completed by the end of 2004, a deadline that nobody now believes is achievable. Some delegates in Cancún believe the round is now dead, a view Mr Lamy stopped just short of endorsing. "It is not dead but it's certainly in need of intensive care," he said.