Some 4,700 delegates from the WTO's 146 member nations were meeting for five days starting Wednesday to try to break the deadlock in the current round of trade liberalization negotiations as rich and poor nations face off over agricultural subsidies.
Thousands of protesters were camped out downtown, preparing to march to demand protections for farmers in developing countries.
Mexican President Vicente Fox, who has urged rich countries like the United States and Europe to reduce aid to farmers, was scheduled to inaugurate the meeting of trade ministers later Wednesday.
On Tuesday, a group of 21 developing nations banded together to pressure their wealthy counterparts to make deeper agricultural reforms. The United States and the European Union have put forth a more moderate proposal.
Police have steadily increased security throughout Cancun and two naval ships were stationed offshore.
Protesters have been a force at every major WTO meeting since 1999, when street riots disrupted delegates in Seattle. Activists, who include farmers, union leaders and students, argue that current free trade rules benefit big business at the expense of poor nations and the environment.
For example, governments are often required to reduce taxes and loosen invasive regulation as the price of entry to the world market.
In a taste of what was expected Wednesday, some 1,000 anarchists and leftists marched Tuesday through downtown Cancun, banging drums and chanting anti-WTO slogans. They were forced back before reaching the meeting site.
Activists say free trade has hurt small farmers and other workers around the world. They want limits on the exchange of agricultural products and preferential treatment for small farmers in the developing world.
Trade ministers from the WTO are largely deadlocked over the thorny issues of agricultural trade and investment and most have said the best they can hope for from the Cancun meeting is a loose framework.
U.S. Trade Representative Robert Zoellick said success at the WTO was important for the world economy.
"We want to open markets because that is key to both growth and development," he said.
About 2,000 farmers — including a few from the United States and Canada — were gathered at the protest camp.
"U.S. farm policy does not benefit the U.S. family farms," said George Naylor, an Iowa farmer who leads the National Family Farm Coalition. "It's just for the benefit of big exporting companies, and the industrialization of the food system."
Also Tuesday, Zapatista rebel leader Subcomandante Marcos urged protesters to shut down the meeting.
"This is a war," Marcos said in a taped message to the protesters played Tuesday. "Let's hope that…the train of death driven by the WTO will finally be derailed in Cancun."
Other protests were held across the southern state of Chiapas, where protesters closed highways and backed up traffic for hours in some cases.
Despite disagreement within the WTO and the attention from protesters outside, WTO Director-General Supachai Panitchpakdi said Tuesday he was optimistic an agreement would be reached in the next five days.
"At least we have paved the way for some options to be put on the table," he said.
He made the comments after accepting a petition from the British rock group Coldplay. The petition, signed by more than 3 million people, asks WTO members to ensure free trade is used to benefit developing nations.
Mexican Foreign Minister Luis Ernesto Derbez, who will serve as chairman of the meeting, has lobbied for free trade efforts that allow small and poor producers to succeed in a global economy.
He made his point by sending every delegate a special basket of Mexican products, including a pound of Fair Trade coffee. Mexico is one of the top producers of Fair Trade certified coffee, which guarantees producers living wages.
Ministers also are considering whether to open their economies to more foreign investment, which some have argued will drive local producers out of business.
The talks are supposed to lead to a binding treaty before the end of next year.
Farm subsidies allow American and European farmers to charge a lower price for their product, making it hard for foreign growers to compete. According to the Bureau of Economic Analysis, the U.S. spent some $17.7 billion on subsidies in 2001, about 7 percent of total farm output.