The world's top economic powers have launched a last-ditch effort in Paris to save a deal on global trade as the public mood turns increasingly protectionist in both rich and poor societies.

Negotiators from the G6 group - the EU, the US, Brazil, Japan, China, and India - failed to break the deadlock over both industrial and farm tariffs at crisis talks yesterday. They agreed to keep the process alive into next week but experts warned that the seven-year drive for trade liberalisation known as the Doha Round is close to collapse.

Yesterday's mini-summit followed rare drama in Geneva this week when the chair of the World Trade Organisation working-group on industry suspended all further meetings, saying the talks had gone backwards and that key parties were no longer even trying to reach a deal. It is widely felt that a Doha accord will be impossible after June.

Peter Mandelson, the EU trade commissioner, said the door was slamming shut on hopes for an accord as the US moves into election mode. He warned of a slide back towards a closed trading system, and accused populists of whipping up a frenzy against globalisation and trying to undermine the authority of the WTO.

"The public is anxious. They are looking for scapegoats. If this pressure helps to torpedo a WTO trade deal, we will have no insurance policy against protectionist pressures," he said. "Our options are running out. The political calendar is against us. Those who are playing it long are playing for failure."

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Peter Sutherland, the chairman of BP and a former world trade chief, said the globe's half century drive for free markets was on the brink of reversal, with profound implications.He said: "People are always moaning about a spiral into protectionism, but this time we really are running into a crisis. Doha faces failure within a month.

"We're hearing an increased decibel level of negativism from the US elections, but there are no saints anywhere. Everybody is the victim of a political agenda in their own country."

John Sweeney, the head of the AFL-CIO labour lobby in the US, has demanded a Doha clause on work standards to enable the US to block imports from countries that use child labour or repress trade unions. "We are implacably opposed to a trade deal that does not include a clause that ensures workers be given basic labour rights. If this is protectionism, so be it," he said.

Barack Obama, the Democratic nominee, went along with this kind of rhetoric during the bitter fight with Hillary Clinton, but leaked documents from his own campaign suggest that he would be careful once in office.

In Geneva, diplomats said India and Brazil (representing the developing countries) were reneging on pledges to open their markets to industrial goods, while Washington was happy to let the talks die since Doha would force the US to dismantle the great nexus of subsidies passed under the Farm Bill.

Washington sees farm subsidies as a way to foster the biofuel industry to help break dependence on oil imports. The strategic imperative has begun to clash with free trade. The EU has agreed to cut its farm tariffs by 54pc, but retains various 'stealth tariffs' and uses anti-dumping policy as a disguised form of protection.

Pascal Lamy, the WTO chief, issued an urgent call yesterday to get the talks back on track. "We have a lot to do, and little time to do it. But I remain convinced this is doable," he said.

Charlene Barshefsky, the former US Trade Representative, told a panel in London that the outsourcing revolution this decade has begun to threaten middle-class jobs in the US and sap support for globalisation. "Everybody understood in the Golden Nineties that we would shed blue-collar jobs, but now white-collar jobs are going too, and that makes the politics more volatile," she said.

She said that every US candidate has to sound like a protectionist during the campaign, but invariably changes tack in the White House. "The first rule is to get elected. Will the US under Obama or McCain do something absolutely outrageous? No, because we're a debtor nation. The world funds our deficits, and buys our T Bills," she said.

Dr Sally Razeen, a trade expert at the London School of Economics, said the post-war global order was slowly unravelling. "The end of the 'goldilocks' global economy has exposed the visible cracks around the world. Countries are resorting to beggar-thy-neighbour policies on food and fuel. In Asia we are seeing a noodle-bowl of restrictive arrangements. I think the WTO has become disconnected from the political reality of the 21st Century."

By Ambrose Evans-Pritchard

Last Updated: 12:57am BST 06/06/2008

Source: www.telegraph.co.uk