The European Commission yesterday took the first step in reforming its contentious banana import regime, unveiling three options in a move aimed at ending punitive US sanctions worth $191 million a year.

The EU's efforts to overhaul its arrangements for importing bananas follow a ruling last month by the World Trade Organisation which said the bloc's regime breached global trading rules.

The Commission said it was ready to reform its banana policy quickly to bring it in line with the WTO ruling.

But it warned that finding a solution which was acceptable to the United States and major Latin American growers and also respected its obligations to poor Caribbean farmers would be difficult and time-consuming.

EU officials said the option most likely to be acceptable to all parties involved a two-tier tariff system which would levy different duties on bananas depending on their origin.

Within a quota, which is as yet unspecified, bananas from ACP (African, Caribbean and Pacific) countries would be granted access at zero duty while Latin American fruit would attract a tariff of between 75 and 737 euros per tonne.

Latin American bananas would also continue to be imported under a 2.2 million tonne quota with a duty of 75 euros a tonne.

But officials acknowledged that even this option may not fully satisfy Washington and was unlikely to be accepted if the EU pitched the tariff for non-ACP bananas too high.

The second option involved abolishing quotas altogether and applying a high flat-rate tariff. The third alternative, likely to be favoured by ACP countries, maintained the Latin American quota but scrapped limits on ACP bananas.