The United States yesterday won approval in the World Trade Organisation (WTO) to impose sanctions worth $191.4 million on goods from the European Union in the long-running banana row.

However, the decision was accompanied by signs that not only Washington and Brussels but also their various backers in Latin America and the Caribbean were now ready to work together to finally resolve the banana issue.

The green light for sanctions was given automatically by the WTO's Dispute Settlement Body (DSB) after the EU said it would not object and recognised its banana import regime would have to be changed to conform with free trading rules. The sanctions are not believed likely to have a material impact on Irish exports. One key disagreement remained.

US officials said the sanctions - 100 per cent tariffs on a wide range of EU exports - would be enforced retroactively from March 3rd, while EU envoys insisted they should only be applied with immediate effect.

Diplomats said other countries in the 134-member WTO indicated relief at the DSB session that the decade-old banana problem appeared at last to be moving towards closure.

While the US ambassador, Ms Rita Hayes, urged the EU to meet its trading partners quickly to work out how the regime could be reshaped to bring it in line with WTO rules, the EU envoy, Mr Roderick Abbott, said this was exactly what Brussels planned.

"I said we were willing to accept the sanctions," Mr Abbott told reporters later. He had also reiterated that Brussels intended to fully comply with WTO panel findings that the regime in its last two forms broke free trading rules.

Meanwhile, the Jamaican prime minister, Mr P.J. Patterson announced that Caribbean countries - who fear losing the special EU access for the vital banana exports the regime has given them - would join in trying to find a settlement.

The latest turn in the highly complex dispute came some 18 months after a WTO panel had found that the regime - a system of marketing arrangements, tariffs and import quotas - broke open trading rules.

The EU had always argued that, although it favoured small banana producers in former European colonies over large-scale Latin American producers and US marketing companies, it conformed to WTO regulations. A spokesman said the EU Farm Commissioner, Mr Franz Fischler, now favoured amending the regime.

But the road to finding an accord that would meet the interests of all banana producers and importers and conform to WTO rules still looked likely to be a long one.

The approved sanctions are to compensate for trade lost by US-based companies like Chiquita Brands International Inc because of the regime.

US officials said a full list of the affected goods would be published in Washington later. But they are known to include items like lithographs, batteries and bath preparations from Britain, handbags from France and Italy and coffee and tea-makers from Germany.

The overall value of the WTO-approved tariffs was well below the $520 million originally sought by the United States - a total slashed by WTO arbitrators after an EU appeal.

After the DSB session, Ms Hayes insisted that the main aim of Washington was to induce the EU to bring its banana import and marketing policies into line. "Retaliation is a last resort. We want the EU to sit down now and discuss a regime that will take into account the interests of all the banana producers " she said.