The prospects for make-or-break talks at the World Trade Organisation (WTO) were delicately poised as rich and poor nations studied proposals for new export opportunities under the negotiations, now in their seventh year.

A deal on bananas would settle one of the world's oldest trade disputes and is key to any breakthrough in the WTO's Doha round of talks which could give a boost to the global economy.

The European Union and Latin American banana producers agreed early on Sunday to cut the EU's import duty to 114 euros ($179) a tonne by 2016 after an initial cut to 148 euros in 2009 from 176 euros now, people familiar with the fruit talks said.

But Cameroon, speaking on behalf of banana exporters in the former European colonies in Africa, the Caribbean and Pacific (ACP), said the deal was unacceptable in its current form.

Lowering EU import tariff further for the ACP's competitive Latin American rivals could devastate ACP banana output, some countries warn. Their bananas face no EU import duty.

Cameroon's trade minister Luc Magloire Atangana Mbarga said there was a "real risk" of the dispute blocking the wider talks.

"There is a real risk but trade negotiations should not be about blackmail," he told reporters before going into a meeting with EU officials. "We want healthy discussions."

He said Cameroon wanted financial support to compensate for the export revenues lost to Latin American competitors and a two- or three-year grace period before EU tariffs are lowered.

EU member states France and Spain also have farmers in the Caribbean territories and the Canary Islands who grow bananas.

The fruit is a key export for many Latin American and ACP countries.

Cameroon's banana industry is the biggest employer in the country after the public sector, and government officials say the industry helps prevent unrest in West Africa, which has been wracked by civil conflict in some countries in recent years.

The latest round of WTO talks began on Monday and are likely to stretch into the middle of the coming week.

Ministers are striving for agreement on how to open farm and industrial markets, the two toughest areas of a global deal which would also span services.

CHINA WORRIES

Delegates were hoping to reach final agreement on bananas and other tropical products issues before ministers from 35 key WTO players resume talks on Sunday evening on the Doha deal.

The Doha negotiations were launched in November 2001 to boost the world economy and help developing countries grow out of poverty. They were almost written off last week as rich and poor countries remained deadlocked.

But a controversial move by WTO Director-General Pascal Lamy to shut out most of the ministers and get seven key members to tackle the nine most sensitive issues was vindicated on Friday when they produced a grudgingly accepted compromise.

Talks on Saturday on opening up services sectors were hailed by ministers and businessmen as also offering positive signals.

The compromise included a proposed new cut in the ceiling for disputed U.S. farm subsidies and revised proposals allowing developing countries to protect their farmers, seeking to balance the needs of poor country importers and exporters.

It also sketched out limits on the ability of developing countries to shield entire industrial sectors from opening up.

A trade source said some developing countries were growing alarmed at signs that China would seek to protect markets for rice, cotton and sugar and other industrial sectors, shutting off new export opportunities for them. This was likely to surface in Sunday evening's meeting, known as the "Green Room".

"In the wider negotiation, everything still hangs on Sunday's Green Room session. There is no guarantee that the fragile package that began to emerge on Friday night will survive," EU trade chief Peter Mandelson wrote in his web blog.