Thailand and Sri Lanka have officially signed a Free Trade Agreement (FTA), marking a significant step for both nations to expand market opportunities and stimulate economic growth. The agreement covers various aspects such as Trade in Goods, Investment, Customs Procedure, and Intellectual Property Rights, as outlined in a statement released by the Sri Lankan president’s media department on Saturday.
Sri Lanka, currently grappling with its worst financial crisis in decades, views the FTA as a crucial initiative to revitalise its economy. The World Bank estimates that the Sri Lankan economy contracted by 3.8 percent in the previous year due to a severe foreign exchange crunch that escalated into a broader financial crisis. The signing of the FTA is part of Sri Lanka’s broader strategy to prioritise trade deals and foster economic recovery.
A delegation led by Thai Prime Minister Srettha Thavisin arrived in Colombo to formalise the FTA, along with other agreements. Prime Minister Srettha expressed optimism about the FTA, emphasising its potential to provide substantial business opportunities for both nations. He encouraged private sectors in Thailand and Sri Lanka to explore the possibilities of two-way trade and investment.
In addition to the FTA, the two countries also signed a new air services agreement, enhancing connectivity between them. The agreement is expected to facilitate smoother travel and transportation, further contributing to strengthened bilateral ties.
According to data from the Sri Lankan central bank, bilateral trade between Sri Lanka and Thailand amounted to approximately $460 million in 2021. Sri Lanka primarily exports tea and precious stones to Thailand, while importing electronic equipment, food, rubber, plastics, and pharmaceuticals.
The FTA is poised to deepen economic cooperation, expand trade volumes, and create opportunities for both countries. As Sri Lanka continues to navigate its economic challenges, the agreement with Thailand is seen as a strategic move to boost trade and pave the way for a more resilient economic future.
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