The European Commission has approved new banana licence agreements intended to meet demands from the World Trade Organization WTO to liberalise banana production and marketing.

The new system, which will come into effect on the first of January 1999, aims to grant licences to operators who trade directly in bananas and exclude those who sell on licence quotas.

The new policy has already been criticised by the United States and its Central American banana partners, who say it still contravenes WTO rules.