BRUSSELS, Belgium, April 10, 2009 - The ACP is to lose both much of its vital existing tariff preference on bananas and much of the funds originally promised to make possible the adjustments necessary for them to cope with the consequences. This is the bad news the European Commission delivered to the ACP Ambassadors in these final days of the longstanding banana dispute at the WTO. The European Commission proposed on March 12, 2009, that the current tariff of 176 Euros/tonnes to MFN countries would be reduced by 2011 to 136 Euros/tonnes, with provision for continuing its reduction to 114 Euros/tonnes by 2019 ACP countries have repeatedly pointed out to the EU Commission that such substantial tariff cuts would have dire consequences for ACP export trade, for which the established preference is of vital importance. In the light of the expansion of MFN imports under the existing tariff, such rapid reductions are neither necessary nor justified. The sharp reductions proposed between 2009 and 2011 cannot be reconciled with any of the EU commitments towards ACP Countries, specifically the recently signed Cariforum-EC Economic Partnership Agreement which provides that tariff reductions should not only be "unavoidable" but "should be phased in over as long a period as possible". Moreover, there is no justification, in advance or in the absence of a Doha settlement, for imposing the whole programme of reductions to 114 euros, originally proposed in the context of the Doha negotiations. The EU Commission has nevertheless, adhered to its proposals but offered to provide an adjustment package to enable ACP banana producing countries to cope with the negative effects of these concessions. It is difficult to see how any adjustment aid could deal in sufficient time with the problems arising from the deep initial cut proposed. But the programme should at least be commensurate to the problems being created. This, however, will not be the case. The European Commission proposed an assistance package of barely 100 million euros for the period 2010-2013. Paradoxically, it is now encouraging ACP States to utilise the funds already committed under European Development Fund allocations for National Indicative Programmes, Regional Indicative Programmes and other ongoing programmes. Without the additional resources promised by the EC, the longstanding ACP-EU development partnership is thrown into question. The EC is yielding to pressure for trade liberalisation regardless of the consequences for the development objectives set out in the Cotonou Agreements with ACP countries and the social and economic impact that such sudden and rapid changes will have on jobs and living standards in rural areas. Bananas for ACP countries are not only about trade, but about development. Bananas have a direct impact on environment, migration and integration in ACP countries. Now that the world is suffering from a global financial crisis, ACP countries cannot afford to sacrifice their few sources of hard currency on the altar of free trade. INSIDE GRENADA NEWS