Roberto Azevedo said diplomats from the WTO's 159 members tried hard but "cannot cross the finish line here in Geneva" ahead of a summit where ministers were to have signed the deal in Bali, Indonesia next week.
The diplomats became deadlocked over the details in the past few days and there remains so much disagreement that several more weeks of negotiations could close the gaps and it will not be possible to negotiate the final details in Bali, he said.
"Holding negotiations in the short time we'll have in Bali would be simply impractical with over 100 ministers around the table," he said.
In recent years, trade talks have progressed more speedily when they involved only two sides. The European Union, for example, has clinched free trade deals with South Korea and later Canada. It is in separate talks with the U.S. and Japan as well.
But the failure to reach a global deal would "have grave consequences for the multilateral trade system" and hurt the WTO's credibility, Azevedo said, because the organization will only be viewed as a trade court and no longer as a forum for governments to negotiate trade agreements.
"We managed to make progress in a large number of very difficult areas," Azevedo told a news conference. "Over the last few days, we stopped making the tough political calls. And this prevented us from getting to the finish line. We are indeed close, but not quite there."