COLOMBO : The trade and investment value between Thailand and Sri Lanka is expected to reach US$1 billion in the next 3-5 years, says Commerce Minister Boonsong Teriyapirom.
A Thai delegation led by Prime Minister Yingluck Shinawatra travelled to Colombo yesterday to meet with President Mahinda Rajapaksa to discuss trade and investment between the two countries.
Both countries agreed to negotiate on trade-related matters in a bid to strengthen their economic partnership and ensure fair trade.
The Thai Commerce Ministry will host the second round of the Subcommittee on Trade-Related Matters in the third quarter to promote trade between the two countries.
"We have requested the schedule of concessions under the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (Bimstec) in order to accelerate negotiations," said Mr Boonsong.
"If we can finish the pact soon, the benefit will be for Bimstec members."
The Thai energy flagship PTT, also represented in the delegation, has expressed concern over Sri Lanka's refusal to compromise with Thailand on refined oil imports.
"We still hesitate to do business and don't want to ship our petroleum products here since we know nothing about Sri Lanka's regulations. Plus if we had any problems, we'd have to come here to fight in a local court," said a PTT official who asked not to be named.
"That's a big threat for us. We've tried to negotiate with them many times to agree on flexible terms with Thailand, but they just don't agree with us."
If an accord can be made, the trade value of this business alone will be worth up to 10 billion baht, said the official.
Duminda Ariyasinghe, executive director of the Sri Lankan Board of Investment, said foreign direct investment in South Asia has great growth potential.
Thailand's investment in South Asia is the smallest in terms of value compared with other Southeast Asian countries.
Malaysia is the top Asean investor in Sri Lanka at $1.26 billion, followed by Singapore with $548 million, while Thailand invests just $25 million.
Thailand's investment could reach as high as $250 million once the trade details are settled, said Mr Ariyasinghe.
Sri Lanka's minimum wage, the lowest in South Asia at $120 a month, should also attract investors.