WTO trade deal: What you need to know

Is it 'Bali or bust' for the WTO?

Global trade talks are renowned for being frustrating, with political battles between nations often hindering progress. But as ministers from around the world gather at a summit aimed at paving the way for the world's biggest trade deal, hopes are high that a breakthrough is in sight.

What's going on?

In what has been dubbed a "make or break" meeting, 159 members of the World Trade Organization (WTO) will gather in in Bali, Indonesia, on Tuesday.

(Read more: WTO on verge of global trade pact)

On the table is the first global trade agreement since the group was formed in 1995, which the WTO says will add $1 trillion to the global economy.

The summit will focus on agreeing rules to ease the movement of goods globally and resolve disputes over agricultural trade — and its success will decide the fate of the embattled trade body.

The venue of the WTO (World Trade Organisation) conference in Nusa Dua on Indonesia's resort island of Bali on December 2, 2013.
Sonny Tumbelaka | AFP | Getty Images

It comes after tense negotiations in Geneva, Switzerland last week, where WTO representatives tried — and failed — to finalize the text for the deal to be decided in Bali, raising fears that agreement may be unachievable.

What's at stake?

WTO Director-General Roberto Azevedo said last week that negotiations were "close, but not quite there", and warned of the consequences of failed talks in Bali.

"Ministers will need to decide what future they want to see, both for the issues on the table here today, and for the WTO," the Brazilian diplomat said in a speech. "If we miss the opportunity we were given this time around, we will regret it a lot more, for the costs will be even greater."

But former WTO head Pascal Lamy told CNBC earlier this month that he was "convinced" a deal would be signed in Bali.

(Read more: Trade talks in Bali will succeed: Former WTO chief)

A successful deal could pave the way for further negotiations on what is known as the Doha Development Round a series of negotiations which aim to help poorer countries by lowering trade barriers.

These negotiations, which started in 2001, stalled in 2008 following an agricultural dispute between the U.S. and India, and Doha cannot be concluded until the issues that will be raised in Bali are resolved.

I'm 'convinced' Bali WTO conference will produce deal: Lamy

Stumbling blocks

India could hold the key to a successful Bali summit, but it also has the power to block talks.

For instance, India's policy of subsidizing food for the poor are against WTO regulations and subject to its sanctions. But the country's Trade Minister Anand Sharma has repeatedly said he will not compromise on the issue.

(Read more: WTO warns of trade slowdown due to protectionism)

In the draft Bali deal, India would be able to keep its subsidized food policy for four years, but it is unclear whether Sharma will accept this proposal.

Reputation risk

Either way, the Bali conference is sure to bring the WTO's credibility under the spotlight.

If the Bali deal is not struck, the WTO's position as a global trade body will be questioned, particularly at a time when other bilateral and multilateral deals are in the process of being negotiated.

(View more: Cameronto lead UK trade delegation to China)

International trade has been on many countries' agenda over the past year. The European Union and U.S., for instance, are in the process of negotiating a massive bilateral trade deal, while a multilateral agreement known as the Trans-Pacific Partnership between 12 countries including the U.S., Australia, Canada and Japan is also in the pipeline.

—By CNBC's Arjun Kharpal: Follow him on Twitter @ArjunKharpal