Colombo: Prime Minister Prayut Chan-o-cha and Maithripala Sirisena, president of Sri Lanka, yesterday jointly announced the first round of free trade agreement talks after meeting in Colombo.
The first round is scheduled to begin today, with trade negotiators hashing out the details.
Sri Lanka and Thailand first began considering an FTA in 2016, when Deputy Prime Minister Somkid Jatusripitak made an official visit.
The two countries signed a MoU on technical cooperation, a letter of intent on cooperation in small and medium-sized enterprise development and a joint programme on tourism for 2016-18.
Sri Lanka is the fourth-largest trading partner of Thailand in South Asia. During 2013-17, bilateral trade between Thailand and Sri Lanka averaged $491 million a year. Last year, bilateral trade totalled $513 million, up 8.7% from 2016. Thai exports accounted for $442.3 million and imports were worth $70.5 million.
Kalin Sarasin, chairman of the Thai Chamber of Commerce, said Gen Prayut's visit signified Thailand's commitment to expanding bilateral trade and investment.
Although two-way trade volume remains relatively small, Mr Kalin said the MoU will help Thai entrepreneurs increase trade and investment in various sectors, including infrastructure.
Thailand also clinched a memorandum of understanding (MoU) on a strategic partnership with Sri Lanka. The move is intended to raise bilateral trade value to US$1.5 billion (49.2 billion baht) in 2020.
Deputy Commerce Minister Chutima Bunyapraphasara, representing the Thai government, signed the MoU with Malik Samarawickrama, Sri Lanka's development strategies and international trade minister.
The strategic partnership will cover 10 sectors: investment, infrastructure, development of the agro-industry, fisheries, gems and jewellery, tourism, SMEs, financial cooperation, packaging industries and IT sector development. The MoU also covers other sectors of mutual economic interest.
Ms Chutima said the participants will later task the subcommittee on trade-related matters with facilitating effective implementation of the provisions of the MoU.
The subcommittee on trade-related matters will meet annually to: decide on joint procedures and formulate a concrete action framework to facilitate the execution of the provisions of the MoU; identify various means to enhance economic strategic partnership between the two countries; and identify obstacles to effective cooperation and propose measures to eliminate them.
The committee will also be tasked with: reviewing the level of implementation of the action framework on a regular basis; providing information and necessary documents required by the MoU; exchanging views on macroeconomic issues in both countries; reviewing existing areas of cooperation and identifying new ones; and deciding on issues arising from the interpretation or implementation of the document.
She said the MoU is also expected to help stimulate Thai investment in Sri Lanka, increasing from $700 million.
The Thai Chamber of Commerce yesterday also signed an MoU with the Ceylon Chamber of Commerce.