GENEVA: Latin American banana producers have agreed to a compromise to settle a conflict over taxes imposed on their exports by the European Union, Latin American sources at the World Trade Organization said Friday.

Under terms of the deal, they said, taxes would be reduced in three stages over a period of seven to 10 years, falling from 176 euros (259 dollars) a tonne to 114 euros.

Banana producing countries had been anxious to secure an agreement ahead of a WTO ministerial meeting here in November, the sources added.

But they said producers had still not agreed on the length of each stage in the reduction process and the level by which taxes would be lowered each year.

The dispute with the European Union erupted following the breakdown in an agreement reached in July 2008 that called for a gradual reduction in taxes from 176 to 114 euros in 2016.

The European Union did not implement the agreement, insisting that it should be linked to a global trade liberalisation accord under the Doha Round of negotiations. Those talks, launched in the Qatari capital Doha in November 2001, are currently blocked.

Ecuador, the world's leading banana exporter, along with Brazil, Colombia, Costa Rica, Guatemala, Honduras, Mexico, Nicaragua, Peru and Venezuela, had threatened to seek WTO approval for sanctions against the EU.