The European Union (EU) said on Monday that it would initiate consultations with Latin countries within 10 days following a WTO rule against the EU's proposed new banana tariff.

Earlier on Monday, the EU lost the dispute at the World Trade Organization (WTO) after a three-member team of WTO arbitrators said the EU's forthcoming revised banana regime would not allow " total market access" to trade partners.

The EU's executive European Commission said that it would study carefully the arbitrators' report and examine available options for taking this process forward.

"The intention remains to have a tariff-only system in place on 1 January 2006, as agreed at the WTO Doha Ministerial held in 2001, " said the Commission in a statement.

"We will start consultations with interested parties without delay. I hope that everyone will cooperate in finding a mutually acceptable solution within the strict deadline set by the WTO," said EU Trade Commissioner Peter Mandelson.

After a long-standing bananas dispute, the EU agreed with Ecuador and the United States in 2001 to move from a complex import system based on a combination of tariffs and quotas for Latin American countries' bananas to a regime solely based on a tariff by Jan. 1, 2006.

Currently, Latin American exports to the EU are limited, with the duty per ton set at 75 euros (about 90 dollars) for the first 2.7 million tons of exports, rising after that to 680 euros (about 816 dollars) per ton.

Earlier this year, the EU proposed an import duty of 230 euros (about 280 US dollars) per ton to replace the existing regime.

However, nine Latin American producers - Ecuador, Colombia, Costa Rica, Guatemala, Honduras, Panama, Brazil, Nicaragua and Venezuela - argued the new rate would make their access to the EU market more difficult.

Latin American producers currently make up about 60 percent of the EU market, with African and Caribbean producers taking a further 20 percent.

EU-grown bananas - mainly from Spanish and French islands - make up the final 20 percent.

Source: Xinhua