World Trade Organisation (WTO) talks aimed at shaping outlines of a new global trade pact by the end of this year are blocked on the key farm and goods tariff issues, diplomats said on Thursday.
They said negotiations on both dossiers this week in the 148-nation WTO's nearly four-year-old Doha Round had failed to break logjams on how import tariffs would be cut on agricultural produce and industrial goods.
"It's not looking good at all," said one developed country envoy, who asked not to be identified.
"There is going to have to be something pretty dramatic happening in the next few days, or any momentum we might have had in this round will be lost."
There had been hope that some initiative - at least on the major problem of farm subsidies in the United States and the European Union that poorer countries want removed quickly - might emerge from the summit of the Group of Eight industrial powers in Gleneagles, Scotland.
But the summit was disrupted on Thursday when bombs rocked London and British Prime Minister Tony Blair, who was chairing the meeting, had to fly back to the capital. The chairman of the farm talks, Tim Groser of New Zealand, on Wednesday cut off what had been planned as a week of discussions. He told negotiators he was looking for "political involvement" to break the impasse, trade sources said.
Groser suggested this might come at a meeting of 30 trade ministers on July 12-13 in Dalian, China but indicated he was not optimistic, the sources said.
Parallel goods tariff talks - dubbed NAMA (non-agricultural market access negotiations) - were in equal difficulties, diplomats said, although they would continue in Geneva until the weekend.
As in the farm talks, the problem centres on the formula to be used in deciding how tariffs will be cut - with divisions running not only between industrialised and developing countries but also cutting across both groups.
Originally, WTO Director-General Supachai Panitchpakdi had wanted tentative agreements on the two dossiers by the end of July, when most missions to the trade body empty out for a summer break until September.
That would have allowed negotiators two full months in the autumn to flesh out accords and then submit them with others to a full meeting of trade ministers of all WTO member countries set for Hong Kong in December.
In turn, the ministers would then approve the agreements as providing the basis for a final package accord - a new world trade pact updating the 1994 Final Act of the 1986-93 Uruguay Round - by the end of 2006.