In a significant move aimed at revitalizing their economies, Thailand and Sri Lanka have sealed a Free Trade Agreement (FTA). Sri Lanka, grappling with its most severe financial crisis in decades, hopes this strategic partnership will be a lifeline for its economy.
With the World Bank estimating a contraction of 3.8% in Sri Lanka's economy last year due to a crippling foreign exchange crisis, the FTA is a pivotal step towards economic rejuvenation. The agreement encompasses a broad spectrum of aspects, including Trade in Goods, Investment, Customs Procedure, and Intellectual Property Rights, all geared towards enhancing market opportunities.
A delegation led by Thai Prime Minister Srettha Thavisin arrived in Colombo to formally sign the FTA and a range of other agreements. As part of the visit, Prime Minister Thavisin also graced Sri Lanka's 76th Independence Day celebrations.
Speaking at a joint media briefing after the signing, Prime Minister Thavisin expressed optimism about the agreement, stating, "This will provide tremendous business opportunities for both sides. We encourage our private sectors to explore the potentials of two-way trade and investment."
In addition to the FTA, the two nations inked a bilateral air services agreement, paving the way for more liberalized air travel between Thailand and Sri Lanka. This is expected to further strengthen their economic ties and facilitate smoother business exchanges.
As per Sri Lankan central bank data, the bilateral trade between the countries amounted to approximately $460 million in 2021. Sri Lanka predominantly exports tea and precious stones to Thailand, while it imports electronic equipment, food, rubber, plastics, and pharmaceuticals from its Southeast Asian partner.
This strategic alliance holds promise for both nations, offering a ray of hope for Sri Lanka's economic recovery while providing Thailand with expanded trade avenues. As the world watches, the Thailand-Sri Lanka FTA signals a commitment to fostering economic growth through international cooperation and trade partnerships.