Trade Negotiations Minister Jim Sutton warns the World Trade Organisation will come under strong pressure to abandon consensus decision-making if the Doha Round trade talks fail to reach agreement.
Sutton - who attended last week's "mini-ministerial" meeting of the World Trade Organisation in China - said the Dalian-based talks were "extremely frustrating".
"I expressed the view that if this round fails there won't be another one," said Sutton.
"It will be taken as effective proof that multilateral rounds are no longer possible in the WTO's decision-making process.
"My feeling is that if this collapses it would result eventually in the WTO falling into disrepair and disuse and there would be need to be a replacement organisation."
WTO director-general designate Pascal Lamy warned after the Cancun talks collapsed that the "medieval court" needed reform.
Lamy will take up his new job on September 1 just months before trade ministers from the 148 member countries meet in Hong Kong to make progress on the so-called "development round".
Sutton said any replacement trade organisation would need to drop the veto system and "radical concepts" like voting would have to be considered.
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