Officials says WTO talks failure sinks banana deal

GENEVA (Reuters) - A deal to settle a historic row over trade in bananas between Latin American exporters and the European Union is off after the failure of broader world trade talks on Tuesday, European trade officials said.

The world's top banana exporter, Ecuador, reacted angrily and demanded that the EU stick to the agreement to slash its import tariffs on bananas.

A nine-day bid to find a breakthrough in the so-called Doha round of world trade talks collapsed on Tuesday, and it was not clear when the negotiations could be revived, if at all.

European officials said the failure also killed off a deal reached on Sunday to change the EU's banana imports regime, which gives preferential treatment to African, Caribbean and Pacific (ACP) countries and has hurt Latin American producers like Ecuador and Costa Rica.

"This was always linked to Doha," said Peter Power, a spokesman for EU Trade Commissioner Peter Mandelson. "This was not a stand-alone agreement and was going to be part of Doha package, so there is no banana deal as of now."

But Ecuador's deputy trade minister, Eduardo Egas, insisted that the EU's promise to lower duties on bananas from Latin American countries was not tied to success at the broader trade talks, and he warned that Ecuador would pursue legal action.

"We will analyze additional actions, but our first reaction is to demand that they stick to what was agreed on," Egas told Reuters.

Europe is Ecuador's biggest market for banana exports.

It was not immediately clear what the next steps for the WTO's global trade round would be. It risks possibly years of delay as the United States changes administration and the European Commission comes to the end of its term in 2009.