Reasons behind the failure: unsuccessful Cancun summit puts future of WTO in doubt.

If you took delegates from 146 countries--ranging from the poorest agricultural regions in Africa to the most affluent nations of Europe--and asked them to negotiate a trade agreement that would satisfy everyone, what are the chances they would succeed?

Very slim, as the collapse of

the World Trade Organization talks in Cancun in September proved. Despite the recognition that free trade in theory leads to greater global prosperity, participants at Cancun fell into two general, and opposing, camps: The developing countries, who contended that the richer nations' agricultural subsidies clearly give these nations an unfair trading advantage, and the more developed countries, which sought new global rules that would help protect their economic interests.

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Add to these differences a few too many negotiating ploys and on Sept. 14, any hope of agreement dissolved. The developing nations pulled out of the talks before they had begun in earnest, pointing angrily to a last-minute maneuver by the European Union to put investment and antitrust issues at the top of the agenda.

But almost everyone agrees that the 800-pound gorilla at these talks was the issue of farm subsidies, on which the advanced countries said they are willing to compromise, but somehow never have. Failure to reach any agreement in this area suggests that this latest round of talks--begun in Doha, Qatar, in November 2001--has little hope of concluding by the scheduled deadline of December 2004. Negotiations now move back to Geneva, the WTO's headquarters.

Despite the breakdown, most observers note that the Cancun meeting was different from earlier talks in a number of respects.

POLITICS TRUMPS PRUDENCE

The Cancun talks came as the United States gears up for the 2004 presidential elections and the European Union prepares to add 10 new members and deal with some of its unruly members. This means that domestic politics played an unusually large role.

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In the United States, for example, the Republicans--facing criticism over continued job losses and factory closings--are concerned that allowing cheaper foreign manufactured goods into the country will only add to those declines, while concessions on agricultural subsidies will cost them votes in the all-important farm belt. Indeed, the Bush administration recently created a new Unfair Trade Practices Team within the Commerce Department whose purpose seems to be to protect American industry and stop job erosion.