Thailand, and Sri Lanka sign a free trade agreement

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Thailand and Sri Lanka officially inked a Free Trade Agreement (FTA) over the weekend, a significant move for Sri Lanka as it strives to navigate its worst financial crisis in decades.

The island nation has been actively pursuing trade deals to rejuvenate its economy, which suffered a severe contraction of 3.8% last year, according to World Bank estimates, amidst a profound foreign exchange shortage that exacerbated broader financial turmoil.

The FTA aims to broaden market opportunities by addressing several key areas including Trade in Goods, Investment, Customs Procedure, and Intellectual Property Rights, as outlined in a brief statement.

Thai Prime Minister Srettha Thavisin led a delegation to Colombo for the signing ceremony, which also included additional agreements. Thavisin is set to participate in Sri Lanka’s 76th Independence Day festivities on Sunday.

“We believe this agreement will unlock tremendous business potentials for both parties. We encourage our private sectors to delve into the possibilities of bilateral trade and investment,” remarked Prime Minister Thavisin during a joint media briefing following the signing ceremony.

In addition to the FTA, the two nations also ratified a new bilateral air services agreement, paving the way for expanded air connectivity between them.

Data from the Sri Lankan central bank indicates that bilateral trade between the two countries amounted to approximately $460 million in 2021. Sri Lanka primarily exports tea and precious stones to Thailand while importing electronic equipment, food items, rubber, plastics, and pharmaceuticals.

The FTA signifies a strategic step forward for both Thailand and Sri Lanka, offering a platform for enhanced economic cooperation and mutual benefits across various sectors.