The world trade talks in Cancun have collapsed abruptly after African representatives walked out in protest against demands from the European Union.
The EU wanted to extend the World Trade Organisation's (WTO)mandate to cover such issues as foreign investment and government procurement, a proposal that was opposed by almost all developing countries.
Irish Government officials expressed regret last night at the failure of the talks, which were regarded as crucial in keeping the current round of trade negotiations on track.
"The Government is disappointed at the outcome. The issues here in Cancun were important.
"We must now redouble our efforts in Geneva to achieve a successful trade round," they said.
The collapse of the Cancun meeting, which recalled the failure in 1999 of a WTO meeting in Seattle, is likely to hit markets around the world today. Many governments and economists hoped that a successful outcome at Cancun would boost confidence in the world economy and encourage recovery.
The collapse could also be bad news for poor countries which had hoped to benefit from the current trade round, which had been designated a development round.
Last night's collapse represents a comprehensive failure of the EU's negotiating strategy, devised by the Trade Commissioner, Mr Pascal Lamy, and the Agriculture Commissioner, Dr Franz Fischler. The EU hoped that a reform of the Common Agricultural Policy, agreed in June, would persuade other WTO countries that European farmers could not be expected to make further concessions in Cancun.
Mr Lamy hoped that he could use the leverage gained by CAP reform to persuade developing countries to extend the WTO's mandate to cover the new issues Europe wanted.
In the event, the EU came under pressure in Cancun to make further concessions on agriculture and, as the US stepped back, European negotiators were blamed for trying to force developing countries to accept its demands on other issues.
Trócaire's Mr Justin Kilcullen said last night that the anger of the developing countries had been clear throughout the weekend when a draft agreement appeared to concede much that the EU wanted and little that developing countries had demanded.
The failure at Cancun means that negotiators must return to WTO headquarters in Geneva and attempt to resolve the issues that divide them. The bitterness surrounding the collapse of the Cancun talks will make that task more difficult and makes a completion of the current trade round in time for a 2005 deadline less likely.
Irish farm leaders in Cancun had been uneasy about some of the proposals on agriculture and Mr Pat O'Rourke of the ICMSA said that the EU was right not to compromise its position on farming. "No deal is better than a bad deal," he said.
Many representatives of anti-poverty groups in Cancun welcomed the collapse of the talks, singing and dancing in the convention centre.