Sharp clashes between key trade ministers and a rash of protectionist measures around the world fuelled scepticism in Davos this weekend about renewed pledges to clinch a global free trade deal this year.

Trade ministers vowed to make it a priority to seal a trade accord this year in the Doha Round of negotiations. Ministers, gathered in the Swiss resort town for the World Economic Forum, also repeated pledges not to erect new barriers to trade, amid fears that tit-for-tat protectionist measures could turn world recession into a depression.

Despite these pledges, few at Davos believed that a Doha deal would be secured this year. Ministers failed to set a target date for the 153 countries in the World Trade Organisation (WTO) to remove the remaining obstacles to wrapping up the talks.

The leaders of the Group of 20 leading world economies (G20) had called for an outline Doha deal to be in place by the end of last year, but a pact failed to emerge. Pascal Lamy, the WTO's Director-General, concluded that gaps between the key players remained too wide to bridge.

Scepticism about the ministers' commitment to reaching agreement on Doha was heightened by the spread of protectionist moves worldwide. “There's considerable focus on protectionism, with all the right rhetoric,” Peter Sutherland, the chairman of BP and Goldman Sachs International, said, “but the rhetoric has not been justified by the performance of the governments to reach an agreement on Doha.” Mr Sutherland was the first director-general of the WTO. A Doha agreement would offer a bulwark against protectionism, he said, voicing a view held by Mr Lamy and most trade ministers in Davos.

Concerns about protectionism were stoked by the European Union's decision to reintroduce subsidies for its dairy industry, a move that would be banned under a Doha pact. On Saturday, the EU put an 85 per cent import duty on screws, nails and bolts from China, a step expected to provoke retaliatory action from Beijing.

Several nations attacked a “Buy American” provision in the new US fiscal stimulus package of tax cuts and government spending being pushed through Congress. President Obama promised to review a provision that would require that steel used in infrastructure projects under the $825 billion package be US-made, but this failed to dispel consternation.

Doris Leuthard, the Swiss Trade Minister, said: “There is a risk of a domino effect if some of the countries have stimulus packages with an element of protectionism in there.” Ms Leuthard also insisted that there was momentum for a trade deal.

However, a call for a full WTO ministerial meeting in the first half of this year would likely backfire, warned Celso Amorim, the Brazilian Foreign Minister, who heads his country's trade negotiations.

Gordon Brown also faced charges of hypocrisy in Davos after issuing warnings about a protectionist trend of “financial mercantilism” as banks keep capital and lending in their home markets.

Bank of England figures showed that — under intense government pressure — British banks were doing just what Mr Brown said in Davos they should not do. UK banks cut foreign currency lending to foreign businesses and individuals by a greater amount in the fourth quarter than at any time since records began in 1990.

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