Thailand and Sri Lanka have inked a landmark Free Trade Agreement (FTA), signaling a pivotal step for Sri Lanka as it seeks to rebound from its most severe financial crisis in decades.
The FTA, signed amidst Sri Lanka’s renewed focus on trade deals to revitalize its economy, aims to bolster market opportunities across various sectors, including Trade in Goods, Investment, Customs Procedure, and Intellectual Property Rights. According to a statement from the Sri Lankan president’s media department, this strategic move aligns with the country’s efforts to spur economic growth and overcome the challenges posed by a 3.8 percent contraction in its economy last year, driven by a severe foreign exchange crunch that exacerbated its financial woes.
Thai Prime Minister Srettha Thavisin led a delegation to Colombo for the signing of the FTA, underscoring the significance of the agreement. Prime Minister Srettha, who also attended Sri Lanka’s 76th Independence Day celebrations, expressed optimism about the FTA’s potential to unlock significant business opportunities for both nations. In a joint media briefing following the signing ceremony, he urged private sectors from both countries to explore the vast potential for two-way trade and investment.
In addition to the FTA, Thailand and Sri Lanka also sealed a new air services agreement, further deepening their bilateral ties.
According to Sri Lankan central bank data, bilateral trade between the two countries amounted to approximately $460 million in 2021. Sri Lanka primarily exports tea and precious stones to Thailand, while it imports electronic equipment, food, rubber, plastics, and pharmaceuticals from its Southeast Asian counterpart. The FTA is expected to fuel greater trade volumes and diversification, offering a promising pathway for both nations’ economic recovery and expansion.
(Source: Al Jazeera | SCMP)
