The World Trade Organisation (WTO) authorised an investigation into the European Union's banana tariffs on Tuesday, reopening a decade-old dispute pitting Latin American countries and the United States against the EU, officials said.

Ecuador asked the global trade body to establish a compliance panel, claiming that Brussels has failed to comply with WTO rulings. The EU blocked Ecuador's initial request two weeks ago, but could not delay the investigation a second time under WTO rules.

The WTO has consistently ruled against how the EU sets tariffs for bananas, forcing the 27-nation bloc to overhaul a system that grants preferential conditions for producers from African and Caribbean countries, mainly former British and French colonies.

WTO rulings

Brussels, however, says a new banana tariff established last year ? euro176 (US$234) per ton ? has brought its rules for banana imports in line with WTO rulings.

But Ecuador, the world's largest banana producer, says the new tariff has actually taken away some of its market share in Europe, hurting more than one million Ecuadoreans dependent on the banana industry.

The tariff has cost Ecuador about US$131 million (euro98 million), trade negotiator Juan Holguin has said.

He told The Associated Press that Ecuador was not opposed to entering into further consultations with Brussels, but that it was determined to make its case at the WTO. He declined to say what he considers to be a fair tariff.

EU trade official John Clarke on Tuesday reiterated Brussels' "firm commitment to pursue a negotiated settlement in 2007." Ecuador's request for a panel "seems to contradict this overall spirit," he told the WTO's dispute settlement body.

The EU expressed disappointment with Ecuador's action two weeks ago and accused the country of seeking preferential treatment at the expense of some of the most vulnerable countries in the global trading system.

Latin American producers and banana companies based in the United States have long complained that the EU rules favour Caribbean and African producers. The United States, in 1999, and Ecuador a year later both won the right to impose trade sanctions on European goods after the WTO found the EU's rules to be illegal.

Cameroon, the Dominican Republic and Jamaica backed the EU after Ecuador's request two weeks ago. Colombia, Costa Rica, Guatemala, Honduras, Nicaragua and Panama voiced support for Ecuador's position. The U.S. response was more ambiguous. Latin American bananas currently have around 60 per cent of the EU banana market, while African and Caribbean producers have 20 per cent, EU officials have said. Bananas grown in the EU ? mostly on Spanish and French islands ? account for another 20 per cent.

The case, originally brought to the Geneva-based trade referee in 1996, spawned a series of disputes in the WTO as lawyers wrangled over procedural intricacies and legislation which had previously never been tested.

- Associated Press