4-2-2024 (BANGKOK) Thailand and Sri Lanka sealed a landmark Free Trade Agreement (FTA) on Saturday, signalling a strategic move by Sri Lanka to navigate its way out of a severe financial crisis.
The island nation, grappling with its worst economic downturn in decades, views the FTA as a critical step towards revitalizing its economy. According to the World Bank, Sri Lanka’s economy contracted by 3.8% last year amid a severe foreign exchange crisis that triggered broader financial turmoil.
The FTA, which encompasses Trade in Goods, Investment, Customs Procedure, and Intellectual Property Rights, aims to unlock new market opportunities and stimulate economic growth, as outlined in a brief statement.
A high-level delegation led by Thai Prime Minister Srettha Thavisin arrived in Colombo for the signing ceremony, accompanied by the inking of additional agreements. Thavisin is set to partake in Sri Lanka’s 76th Independence Day celebrations on Sunday.
Speaking at a joint media briefing post-signing, Prime Minister Thavisin hailed the FTA as a catalyst for substantial business prospects for both nations. He urged private sectors on both sides to explore the vast potential for two-way trade and investment.
In addition to the FTA, the two countries also inked a new bilateral air services agreement, facilitating liberalized air connectivity between them.
Data from the Sri Lankan central bank indicates that bilateral trade between Thailand and Sri Lanka 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.
