WASHINGTON - Today, WTO Director-General Pascal Lamy dropped his latest attempts to push through a conclusion to the Doha Round of WTO expansion by suspending his call for yet another "mini-Ministerial" meeting this month in Geneva. Talks aimed at building sufficient consensus to justify the potential mini-Ministerial broke down this week over additional U.S. demands that developing countries, particularly China and Brazil, reduce their tariffs on certain sectors of industrial goods in their economies to zero.

"What is needed now is a significant roll-back of the WTO, so that governments worldwide can develop new rules to regulate the financial sector that has wrought such severe economic damage around the world," said Deborah James, Director of International Programs of the Center for Economic and Policy Research (CEPR), a Washington-based independent think tank. "We don't need more of the tail wagging the dog," she said.

The world has changed significantly since talks were first launched in Doha, Qatar in 2001. Global deregulatory institutions such as the WTO have lost much of their credibility because of the link between deregulation and the current economic collapse.

Negotiations to expand the WTO through the Doha Round were supposed to have concluded years ago, but several Ministerial-level meetings, as well as ongoing talks in Geneva, have failed to reach consensus. Recent efforts to conclude the Round during this summer's mini-Ministerial in Geneva ended in a stalemate over agricultural issues - partly because of a global food crisis in which agricultural trade liberalization and speculative activity played a significant role.

In the WTO negotiations on services, rich countries are seeking further deregulation and liberalization of financial markets. "Clearly, many governments are wary about further movement in this direction, after the calamity that we have experienced from financial deregulation," said James.

Many countries are also keen to hold on to, and even expand, available policy options in the midst of a deepening global slowdown. They are therefore more reluctant to tie their hands with restrictions in the WTO. Developing countries' accession to US demands in the Non-Agricultural Market Access (NAMA) negotiations would have left them more exposed to even further job loss and foreclosed growth opportunities.

Importantly, many of the solutions widely agreed to be necessary to pull economies out of the crisis, such as nationalization of failing enterprises, are currently prohibited by WTO rules, and would have been further curtailed by WTO expansion.