EU and Latin American countries on Tuesday closed in on a deal that could end a 16-year dispute over banana tariffs, an issue with implications on wider trade talks, officials said.

The deal on lowering European Union banana tariffs for Latin American suppliers could be concluded "by the end of the week or beginning of next week," a source close to the negotiations said.

An internal European Commission memo obtained by AFP said "a banana agreement with the Latin American suppliers is within reach."

"We are still working to also bring on board the US, which was a party to the dispute, through a parallel agreement and hope this can be achieved this week," the memo said.

The deal could bring an end to the dispute that began in 1993 and which centres on the EU's preferential trade regimes for ex-colonies in Africa, the Caribbean and the Pacific, known collectively as ACP nations.

A resolution could also give a boost to wider trade talks.

The dispute has highlighted free trade conflicts between rich and poor nations, with many ACP countries small and underdeveloped.

ACP nations, whose products can enter the EU tariff-free, have objected to the European Union lowering banana tariffs, saying such a move would put their economies at risk.

But, according to the EU memo, the deal with Latin American suppliers could "also clear the way for an understanding between Latin American and ACP developing countries" on trade issues.

It points out that the banana deal cannot be initialed until such an understanding is reached.

The memo said the EU is prepared to help ACP countries adapt to the tariff changes with a 190-million-euro payout over the course of four years.

EU banana tariffs will gradually be reduced from ?176 per tonne to ?114 under the deal, which is to detail how that would be done.

Latin American sources at the WTO have previously said the reductions would take place over seven to 10 years.