UPDATE: Trade Agreement Suffers Major Setback As WTO Talks Are Suspended

India says restarting talks could take "months to years."

(Updated to include reaction from National Association of Manufacturers.)

GENEVA (AP) - Global commerce talks at the World Trade Organization collapsed Monday as top powers failed to agree on steps toward liberalizing trade in farm and manufactured goods.

Meanwhile, the National Association of Manufacturers applauded the U.S. for refusuing to agree to an "unambitious" outcome to the latest round.

"'Doha Light,' in which the United States is pressured to ask for less and to give more is just not acceptable," said John Engler, President of the NAM. "No deal is absolutely better than a bad deal. We must continue
pressing for a good deal all around - no matter how long that takes. The win-win outcome with market access gains for all is what we have to keep working towards."

Engler said that if the U.S., the world's largest trading nation, doesn't "press for ambition" during the talks, no other nation will.

"We fully support the decision to suspend the talks until other nations are ready to lower their defensive agendas," Engler said.

Earlier, Indian Trade Minister Kamal Nath said the talks had been suspended and added that ''it could take anywhere from months to years,'' to restart the negotiations. ''This is a serious setback, a major setback,'' said Brazilian Foreign Minister Celso Amorim.

EU trade chief Peter Mandelson blamed the failure on the United States.

''The United States judged that it would be better for the process to be discontinued at this stage,'' he said. ''This action has led to the round being suspended.''

But U.S. officials said the fault lay with other countries.

''Unfortunately things became clear yesterday that 'Doha light' seems still to be the preferred option of some of the participants,'' U.S. Trade Representative Susan Schwab told reporters at the World Trade Organization on Monday.

U.S. Agriculture Secretary Mike Johanns said the proposed steps forward from other countries ''appeared to be getting lighter and lighter in the last few weeks.''

''Today truly represents a failure,'' Johanns said.

He blamed Brazil and India for being inflexible on their refusal to cut barriers to industrial imports and the EU for refusing to open up its farm markets.

''There was just simply nothing there,'' Johanns said.

Johanns said the United States indicated it could increase its offer to cut subsidies to American farmers, but he would not say whether the U.S. team had made a concrete proposal.

However, Mandelson said the United States showed little willingness to compromise.

''The U.S. was unwilling to accept or indeed to acknowledge the flexibilities being showed by others in the room and as a result felt unable to show any flexibility on the issue of farm subsidies,'' he said.

Mandelson stressed his ''profound disappointment'' with the result and noted that a stall in the talks would threaten previous agreements that were painstakingly reached too help the world's poorest countries.

''This was neither desirable nor inevitable. It could so easily have been avoided,'' he said.

Though Schwab said the U.S. was committed to ''a robust, ambitioned and balanced round,'' other officials had worried that the failure of leading commercial powers to make compromises would wreck the talks.

She said it was for Lamy to decide when talks should be restarted.

''We need to focus on how to look forward ... without this degenerating into a finger-pointing exercise,'' Schwab said.

The complex 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.

But the Doha round has stalled because of differences between rich and poor countries, as well as between the EU and the U.S. The Doha negotiations are named for the Qatari capital where they were launched in 2001.

Most countries have been sticking rigidly to the same positions they have maintained for months.

The entire process is rapidly running out of time because President Bush's authority to ''fast track'' the trade deal - enabling U.S. envoys to negotiate an agreement that can be submitted to Congress for a yea-or-nay vote without amendments - runs out in mid-2007.

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