The European Union has agreed to a levy of 176 euros a tonne on Latin American banana imports, a further drop from the 179 euros a tonne proposed last week.

Attempting to bring to an end a nine-year dispute with the US and Latin American nations over the level of banana import tariffs, EU governments have scaled back their expectations for the fourth time this year.

The levy, if accepted, would be imposed on around $1.45 billion of Latin American banana imports, said Michael Mann, a spokesman for the European Commission in Brussels. However, the duty chosen is likely to anger Latin America and could raise the heat at world trade talks next month.

The 25-nation EU told the US in 2001 that it would scrap quotas on banana imports by January 1, 2006, in return for the dropping of $191m of sanctions on EU goods imposed after banana companies complained that the EU's system inhibited their exports.

The battle now is to find a compromise tariff rate that will satisfy the world's biggest banana exporters from Latin America and retain the support of EU producers in Spain's Canary Islands, Portugal's Azores and the French territories of Martinique and Guadeloupe. A third group of countries, former European colonies in Africa, the Caribbean and the Pacific region, are concerned that their economies will suffer as restrictions on competition in their main market end.

The proposal calls for one import tariff and no quotas except for former French, British and Portuguese colonies, which will continue to enjoy duty-free access.

Latin American exporters have already made their feelings known. "We are going to continue insisting on lowering this tariff," the trade minister of Costa Rica, Manuel Gonzalez, said. "It's a very clear message that they are going to start the steamroller and roll over us."

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