Hopes of a global trade deal are under threat after ministers failed to iron out key differences ahead of a crucial World Trade Organization (WTO) meeting.
Rob Portman casts doubt on hopes of an early global trade deal
Talks between WTO officials in London and Geneva have ended in stalemate and now December's talks on cutting barriers may have to be scaled back.
US trade chief Rob Portman expressed pessimism ahead of the Hong Kong talks.
"I'm sorry to report we have not been able to make the progress I would have liked to have made," Mr Portman said.
"We've been able to bridge some differences but we have not been able to come up with the formulas and modalities for the Hong Kong meeting."
His sentiment were echoed by EU Trade Commissioner Peter Mandelson who said the talks had succeeded "not in narrowing differences but in defining them".
"The gap is significant."
WTO ministers have now downgraded their expectations of securing a major breakthrough at the WTO summit in Hong Kong starting on 13 December.
They had hoped to approve a framework accord to reduce trade barriers, as demanded in the Doha round of talks.
Now they predict that another conference would be called by March to make up lost ground.
"This round does extend through 2006," said US Agriculture Secretary Mike Johanns.
"It would be a grave mistake to declare this round at an end at the Hong Kong meeting," Mr Johanns said.
However, some progress was made this week when the US and China agreed a deal on textile imports.
The deal follows months of wrangling over the soaring level of Chinese clothing imports into the US. Earlier in the year, the EU and China agreed limits on textiles imports.
The international community had aimed to broker a free trade deal by the start of 2006 but reform of farm subsidies remains a major sticking point.
Mr Mandelson says the EU has done all it can to build bridges
Developing countries such as Brazil and India argue that farm subsidies in wealthier nations - the US and the EU in particular - depress global farm prices and prevent farmers in poorer nations from prospering.
Poorer nations have dismissed trade offers from the US and EU as being insufficient, with the EU coming in for particular criticism.
"As far as the European Union is concerned, I feel that we have done everything we could reasonably be expected to do in agriculture to build bridges," said Peter Mandleson.
Brazil has resisted stepping up talks on trade in products and services until the farm question is settled.
"If there is not a good deal on the table for developing countries then it is better for there to be no deal at all," said Peter Hardstaff of the World Development Movement.