COLOMBO - Thailand and Sri Lanka signed a free trade agreement on Saturday, a move that Sri Lanka hopes will help it emerge from its worst financial crisis in decades.
The island nation has been renewing a focus on trade deals to foster economic growth and help its battered economy, which is estimated by the World Bank to have contracted 3.8% last year, after a severe foreign exchange crunch plunged it into a wider financial crisis.
The free trade agreement (FTA) is aimed at enhancing market opportunities, with negotiations covering trade in goods, investment, customs procedures and intellectual property rights, a government statement said.
“This will provide tremendous business opportunities for both sides. We encourage our private sectors to explore the potential of two-way trade and investment,” Thai Prime Minister Srettha Thavisin told a joint media briefing following the signing.
The Thai delegation headed by Mr Srettha arrived in Colombo on Saturday to sign the pact along with other agreements. Mr Srettha will also attend Sri Lanka’s 76th Independence Day celebrations on Sunday.
The two countries also signed a new bilateral air services agreement, providing for liberalised air services between the two countries.
The FTA is the 15th deal of its kind to be signed by Thailand and the first since Mr Srettha took the premiership last year.
The value of trade between Thailand and Sri Lanka from January to October last year totalled US$320.4 million, according to the Department of Trade Negotiations at the Ministry of Commerce.
Thailand’s main exports include rubber products, fabrics, gemstones, machinery and plastic pellets, while imported goods include jewellery, electrical components, garments, plant products and chemicals.
The new FTA is expected to benefit Thailand’s exports of automotive parts, textiles, electrical appliances, machinery, steel products, paper, processed food and animal feed.