Director General Supachai Panitchpakdi told leaders at an informal meeting that while some progress had been made to further negotiations on the Doha Development Round, he warned that a crisis was inevitable if more work on agriculture was not completed in time before the Hong Kong ministerial meeting in December.

"These negotiations are in trouble," said Panitchpakdi. "This process is nowhere near sufficient in terms of our critical path to Hong Kong, and it is not being seen in the key issues which would help unblock progress across the board."

Panitchpakdi, who has issued several warnings since March over the completion of Doha, said he wasn't ready to push the alarm bell, but that his "finger was hovering over it."

Doha was developed in Qatar in 2001 aimed at liberalizing trade and opening free markets to developing countries.

The issue of agriculture has been the most politicized and contentious of all the issues facing progress on the Doha round. While developing countries have called for industrialized nations like the European Union and the United States to phase out their agricultural subsidies programs, there has been little progress made thus far.

According to Panitchpadki, halted progress on agricultural talks on Doha has been the result of political discord among leaders who have been unable to reach generalized agreement due to specific interests. The result, he said, has stymied progress in other remaining areas like market access, tariff cuts and services.

"The time is long overdue to pass from identifying to solving problems; from the technical to the political level; and from generalities to specifics," said Panitchpadki. "We need to apply less creative energy to deciding whose fault everything is and more to finding solutions that everyone can share in."

The warning by the head of the world trade body came on the same day leaders of the world's top industrialized nations were expected to announce an agreement to phase out agricultural export subsidies.

On Thursday, both the European Union Trade Commissioner Peter Mandelson and U.S. Trade Representative Robert Portman held a closed-door meeting in London to discuss a possible solution to the agricultural subsidies program.

During the meeting, Brussels offered to agree to lower tariffs on agricultural produce, if Washington would agree to cut aid to American farmers.

Both Washington and Brussels have previously discussed the possibility of reforming their agricultural programs, despite strong opposition from both European and American farmers.

However, the standstill has been the result of a who goes first mentality, in terms of instigating reform.

Earlier this month, President George W. Bush said that the United States would be willing to discontinue subsidizing American farmers, if the European Union would agree to do the same.

While Brussels welcomed the proposal, it said that it hoped the United States would follow its lead in reforming its own Common Agricultural Policy.

"I hope the President's words can be translated into action," said Mariann Fischer Boel, the EU agricultural commissioner, responding to Bush's statement. "We are prepared to bind our reforms into a global trade accord, but only if the U.S. and others commit themselves to similar reform."

However, talks of reforming CAP have caused an eruption of discontent among certain European leaders and farmers.

While Prime Minister Tony Blair has publicly declared his willingness to do a complete overhaul of the EU's budget in the hopes of making cuts on farm subsidies, both Mandelson and Boel have argued against reform saying that the solution to scrap CAP would be crucial mistake.

"Talk of "scrapping the CAP" is frankly na��ve and misplaced: we need a reformed CAP that supports a sustainable countryside in Europe and does not distort trade," said Mandelson, in a speech Wednesday in Gleneagles, site of this year's G8 summit.

The French government has also been vehemently opposed to reforming CAP, saying that it is not the appropriate time for negotiation.

Despite the promises for reform, if no progress is made in the near future, the inevitable crisis hinted by Panitchpadki may soon become a reality.

"This change needs to happen now, not in September or October. It may well be too late by then. I think there is still a slender chance of averting it, but every hour must be made to count," said Panitchpadki.

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