July 29 (Bloomberg) -- Talks aimed at producing a global trade agreement collapsed in their ninth day because of a disagreement between the U.S. on one hand and China and India on the other over agriculture tariffs.

``Today is a serious setback,'' World Trade Organization Director-General Pascal Lamy told journalists after announcing the breakdown. ``But looking at what was on the table before this week, looking at what is on the table after this week, there is much more on the table after this week. I'll try to put that back on track.''

The Geneva meeting may have been the last chance to strike a deal on cutting tariffs and subsidies in agriculture and manufactured goods before the U.S. presidential election in November. Lamy said before trade ministers began negotiations on July 21 that there was no ``Plan B.''

Ministers from the U.S., India and Brazil said a new effort should follow the collapse in talks. The WTO ``should make another try,'' Brazilian Trade Minister Celso Amorim said. Lamy said, ``We will need to let the dust settle a bit'' before deciding how to move forward.

The main sticking point in the collapse was the trigger for special safeguards that would enable developing countries to raise agricultural tariffs to protect their farmers in case of a surge in imports. The impasse over the measures overshadowed progress that had been made on other agriculture issues as well as on industrial goods and services trade issues.

`Very Disappointed'

``I am very disappointed that we were unable to finish the round,'' Amorim said. ``I would not have thought that everything would hinge'' on the special safeguard measures.

Susan Schwab, the top U.S. official at the meeting, said she wasn't prepared to accept a deal that gave other nations an unfair advantage.

``Any safeguard mechanism must distinguish between the legitimate need to address exceptional situations involving sudden and extreme import surges and a mechanism that can be abused,'' she said. ``In the face of a global food price crisis, we simply could not agree to a result that would raise more barriers to world food trade.

The ministers refrained from blaming one another, calling it instead a ``collective failure,'' in the words of Amorim, European Union Trade Commissioner Peter Mandelson and Indian Commerce Minister Kamal Nath.

Still, the U.S. yesterday accused India and China of refusing to accept key elements of a compromise put forth by Lamy four days ago and refined by ministers over the weekend.

$100 Billion Value

WTO talks have moved in fits and starts since November 2001 as industrialized and emerging markets clashed over how to open up trade. Lamy has estimated that a deal would add as much as $100 billion to the global economy at a time when slowing growth and soaring food and fuel prices are undercutting living standards around the world.

``This is a setback for the international trading system, greater than just the lost trading opportunities,'' Mandelson told reporters. ``We have missed the chance to seal the first global pact of a reshaped world order.''

Progress in the Geneva negotiations ground to a halt yesterday as the U.S. accused China and India of refusing to open their fast-growing markets to foreign competition and snubbing a compromise on agriculture and industrial goods.

``It's a very bad sign to give at this time to the world economy,'' Shada Islam, a trade expert at the European Policy Centre in Brussels, said by telephone today. ``People had been looking to the WTO for a sign of confidence at this very critical time in the world economy.''

Lamy's decision to call the summit was a gamble aimed at pressing key governments in the 153-member WTO to bridge divisions in a short period. He told negotiators last month that without an accord on agriculture and industrial goods by the end of July, the chances for a successful conclusion to the trade round were less than 50 percent.

To contact the reporter on this story: Jennifer M. Freedman in Geneva at jfreedman@bloomberg.net

Last Updated: July 29, 2008 15:29 EDT