World Trade Organization's trade talks in Geneva have collapsed amid serious differences between the US and EU countries.
The World Trade Organization (WTO) is an international, multilateral organization, which sets the rules for the global trading system and resolves disputes between its member states.
Ministers from the G6 group – Australia, Brazil, India, Japan, the European Union and the United States – had been talking to reach a deal on how to boost trade in farm and industrial goods .
The main sticking point was the refusal of the rich countries to cut huge subsidies they give to their farmers and open up their markets for fair trade.
It is estimated that the EU and US still spend $100 billion per year on farm subsidies that undercut producers in poor countries. All rich countries promised was a re-packaging of existing domestic support rather than real cuts to the amount of money going to rich farmers and corporations.
The WTO trade talks aim to boost the global economy and lift millions out of poverty worldwide by lowering trade barriers across all sectors, with particular emphasis on clearing obstacles to increased exports from developing countries.
Poorer countries resent what they see as the high-handedness of the rich countries for their refusal to give a fair deal to others in this globalized world economy.
It's apparent that many countries are being pushed into the global economy faster than their citizens or their political cultures can adapt. They need time, and support, to accommodate the stresses of participating in a rule-based global economy.
EU Commissioner Mandelson also held out little hope the failed talks could be resurrected, saying many of the WTO's 149 members would have "lost a great deal of faith and confidence" in the process.
In the long run, the collapse of the talks would lead to less open markets and leave developing countries worse off, he added.