Daily Mirror

Highly Factual

*EU to introduce new guidelines effective from 2027 *Procedure for quick withdrawal of facility in case obligations not fulfilled With a delegation from the European Union expected at the end of next month, the government is hard-pressed for the fulfilment of obligations including the repeal of the Prevention of Terrorism Act and the amendment of the Online Safety Act to qualify for the Scheme of Preferences Plus (GSP+) under the new guidelines being worked out, Daily Mirror learns from diplomatic sources. The government is also required to improve anti-corruption measures. European Union is revising the criterion for beneficiary countries to qualify for GSP+ starting from 2027. GSP+ is a special incentive arrangement for sustainable development and good governance. GSP+ slashes the tariffs to zero for vulnerable low- and lower-middle income countries that implement 27 international conventions related to labour and human rights, environmental and climate protection, and good governance under the current system. Compliance with the principles of all including environmental and good governance conventions will become mandatory for the beneficiaries, according to sources. Also, a procedure has been laid down for the rapid withdrawal of the facility in case obligations are not fulfilled. For GSP+ beneficiaries, a two-year transitional period will be given to ratify newly added conventions. They will have to submit a detailed implementation plan for all conventions to be included in the system. European Union has already informed that the PTA in its current form is unacceptable. In the new system, good governance aspects include fight against corruption- introduction of meaningful measures preventing corruption, bribes and a reliable transparent public tender procedures. Sri Lanka once lost the GSP+ . The country received it back in 2017 with the promise to repeal the PTA. Sri Lanka- European Union trade volume stands at US $ 3.2 billion. The trade balance is in favour of Sri Lanka.

Ada Derana

Factual

President Donald Trump’s reciprocal tariffs have started a global trade war and it will reduce not only the growth of the United States (US) and the world but also push up inflation and delay Federal Reserve rate cuts in US according to a report by Fitch Ratings. The rating agency has cut the growth forecast of US to 1.7 per cent from 2.1 per cent in its December 2024, Global Economic Outlook (GEO) and the growth forecast for 2026 was cut to 1.5 per cent from 1.7 per cent. These rates are well below the trend if we compare it with almost 3 per cent annual growth in 2023 and 2024. Fitch says fiscal easing in China and Germany will cushion the impact of higher US import tariffs, but this year growth in the Eurozone will still be a lot weaker than its forecast of December GEO. Mexico and Canada will experience technical recessions given the scale of their US trade exposures. Fitch Ratings has cut Mexico and Canada annual 2025 forecasts by 1.1pp and 0.7pp respectively. It says the average world growth will slow to 2.3 per cent this year, well below the trend and down from 2.9 per cent in 2024. This is a downward revision of 0.3pp and reflects broad-based reductions in developed and emerging economies. World growth will remain weak at 2.2 per cent in 2026. Fitch Ratings says “The size, speed, and breadth of US tariff hike announcements since January is staggering.” The effective tariff rate (ETR) of US has risen to 8.5 per cent from 2.3 per cent in 2024 and is likely to rise further. Fitch estimates an effective US tariff rate of 15 per cent on Europe, Canada, Mexico, and others in 2025, and 35 per cent on China. This will push the US ETR to 18 per cent this year before moderating to 16 per cent next year as the ETR on Canada and Mexico falls to 10 per cent. This would be highest rate for 90 years. Fitch Ratings adds “There is huge uncertainty about how far the US will go and our assumptions could be too harsh. But there are also risks of a larger tariff shock including from an escalating global trade war. Moreover, the US administration has set out an import substitution agenda - aimed at boosting US manufacturing and reducing the trade deficit - which it believes can be achieved with higher tariffs.” Tariff hikes will also impact US negatively, it will result in higher US consumer prices, reduce real wages, and increase companies’ costs, and the surge in policy uncertainty will take a toll on business investment. Retaliatory tariffs will hit US exporters. Export-oriented global manufacturers in East Asia and Europe also will be affected. Fitch calculation suggests tariff increases will reduce GDP by about 1pp in the US, China, and Europe by 2026. Germany’s recent pivot to fiscal stimulus will do a lot to cushion the blow and will allow its economy to recover modestly in 2026. More aggressive policy easing will also help to offset the impact in China. The tariff shock is estimated to add 1pp to US near-term inflation, the Fed will delay further easing until 4Q25. Fitch believes that now Fed will cut rate just once this year, but it may go for three more cuts in 2026 as the economy slows and tariff levels stabilise. Source: ANI --Agencies

Ada Derana

Highly Factual

Sri Lanka’s Foreign Minister Vijitha Herath informed Parliament today (15) that an action task force will be established to address the challenges posed by the evolving global tariff structures resulting from the policies of newly elected U.S. President Donald Trump. “We are facing significant challenges due to the tax policies introduced by President Donald Trump. Currently, Sri Lanka exports approximately $3 billion worth of goods to the United States, while our imports from the U.S. stand at around $368 million. Given our substantial export market, it is crucial to assess the impact of these policies,” the Minister stated. He added that in order to formulate an effective response, experts and scholars have been brought together through the Lakshman Kadirgamar Institute of International Relations and Strategic Studies (LKI) to develop a strategic plan. “The initial groundwork has already been laid, and necessary measures will be implemented through the newly formed action task force,” he added.

Ada Derana

Low Factuality

National People’s Power (NPP) MP Ajith Gihan has explained how the government intends to provide foreign employment opportunities in countries including South Korea, Japan, and Israel. He explained this while participating in the parliamentary debate yesterday (15). The MP stated that it is expected to provide 7,600 employment opportunities to Sri Lankans in South Korea in the future. Furthermore, he added that around 9,300 employment opportunities in Japan and about 15,900 in Israel are expected to be offered to Sri Lankans, with these jobs provided in the fields of construction, fisheries, agriculture, animal husbandry, and the service sectors. “We expect to provide employment opportunities in several countries, such as Korea, Japan, and Israel. We are working to provide about 7,600 jobs to South Korea. We also expect to provide about 15,900 jobs to Israel. Additionally, we expect to provide 9,300 jobs to Japan under the SSW program,” he added.

Daily Mirror

Factual

By Yohan Perera and Ajith Siriwardana Colombo, March 18 (Daily Mirror) - Sri Lanka's apparel, rubber, coconut and plastics exports could be affected by US President Donald Trump's trade policy which is expected to be effective from April this year, Deputy Minister Anil Jayantha told Parliament today. He said USA is to focus on resiprocal tarrifs. "Sri Lanka has already undertaken steps to minimise the negative effects of Trump's trade policy. The Sri Lankan Ambassador in Washington has already engaged in negotiations with US authorities. Sri Lanka enjoys sound bilateral ties with USA and we hope to have a  successful engagement with that nation, " the Deputy Minister assured. The Deputy Minister was responding to a question raised by opposition MP Ravi Karunanayake who urged the government to take action to minimise the negative effects of Trump 's trade policy.