WTO: This is what deadlock looks like

In the United States, agriculture accounts for less than 1% of economic activity; in the EU the figure is just 2.2%. Yet, agriculture is the stumbling block now as always, so trade ministers are left looking for scraps of good news - anything to tell the folks back home that it was worth bringing together 8,000 visitors from all over the globe for a five day meeting.

Even if the WTO can't come up with a deal this week it hasn't put the good people of Hong Kong off from making an impression. I was met at the airport by several friendly volunteers who helped me find my way to my hotel downtown, not far from the convention center where the talks were being held. Nearly everyone here speaks English, thanks in part to this city-nation's British colonial heritage. China assumed control in 1997, but this city champions capitalism and all its glory. There's even a new Hong Kong Disneyland!

The WTO goes all out to accomodate the media. This room holds around 400 high-speed, internet-connected flat-screened computers. Nearby I walked past cubicles for the world's mainstream press, including Al-Jazeera.

Hong Kong is compact, with just 6.8 million people, but its surging economy - the government is looking at 8.2% growth this year - is proof that free trade works. Hong Kong is consistently rated in surveys as the world's freeest economy. Red tape is minimal, taxes are low and the flow of capital and currency is unrestricted. . Over 1,000 international companies have set up regional headquarters here, and that number will only grow as China continues to flex its economic muscle.

Well-intended

The WTO set out on this, its latest round of negotiations, shortly after the terrorist attacks of 9/11 in a well-intended attempt to answer critics who said the organization was nothing more than a rich countries' fraternity. In fact these talks are called the Doha Development Round, set to explicitly focus on the needs of developing countries. The agreement on agriculture is to focus on three pillars: market access; domestic support (subsidies and other programs including those that raise or guarantee farm gate prices and incomes); and export subsidies.

Unfortunately talks in Cancun two years ago broke down and all the good will seemed to escape like air hissing from a balloon. Then this July, WTO ag trade ambassador Tim Groser (who has since gone on to land a seat in New Zealand's parliament), managed to work out what seemed to be a last-ditch agreement. The U.S. unveiled a dramatic proposal that would reduce domestic subsidies in exchange for better market access, but the EU's trade leader Mandelson, after scathing criticism from French farmers, has since said it can't go any further.

So, this is what deadlock looks like. And despite the beautiful Hong Kong skyline, it's not a pretty sight.

Tomorrow: The activists throw a party.