Warning that the collapse of the WTO's Cancun Ministerial last month would have harsh impact on developing countries, including India, the European Union on Wednesday accused the country's mainstream media of wrongly declaring 'failure as a success.'

"Immediately after the Cancun Meet, I was quite surprised to see the mainstream Indian media declare the failure as a success," Michel Caillouet, head of delegation, EU, said at a conference in New Delhi.

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"Nothing could be farther from the truth. The consequences of the Cancun breakdown will be particularly grave for those -- mainly developing countries -- who were seeking significant reductions in agricultural subsidies and improved market access for agricultural and industrial products," he said.

Expressing concern that the breakdown of talks at Cancun dealt a blow to the World Trade Organisation as an institution, Caillouet said: "The failure of the trading partners to respond to the major moves and flexibility shown by the European Commission -- on goods, services, special and differential treatment, the Singapore issues, development and environment  -- was in our view most unfortunate and a unique opportunity lost for freeing multilateral trade relations."

He said the main consequence of this failure will be the delay in the progress of Doha Development Agenda negotiations due to the failure to agree on the scope and parameters of these (WTO) negotiations.

Describing trade liberalisation as politically a very sensitive issue and difficult to carry out, Caillouet said: "We will all be responsible if protectionism replaces our desires in the post-war era to bring about an international trading system which is free and which promotes expansion in output and economic growth."

Trying to come out clean on the controversial issue of agriculture, the EU official said the bloc is the single largest importer of agricultural products from the developing countries and shifted the blame on the Third World.

Accusing developing countries of imposing higher tariff rates, he said liberalising trade within the Third World is more important for sustained growth.

Speaking on the occasion, Stefano Gatto, EU Trade and Economic Affairs Counsellor, said free trade agreements are complementary to multilateral trading bodies like WTO.

He, however, said the EU currently has not discussed entering into a bilateral free trade agreement with India.

Coming down on developing countries for imposing selection of agenda, Gatto said: "We cannot negotiate some issues and leave others. There are always efficient rules and not-so-efficient rules in any such mechanism."

Terming textiles as a critical component of Indian economy, S B Mahapatra, secretary, ministry of textiles, said that developed countries were continuing with high tariff rates while asking developing countries to free their markets for imports.