Prime Minister Prayut Chan-o-cha is optimistic about signing a free trade agreement with Sri Lanka after the two countries level up their economic ties, but said full bilateral trade will "need time".
Talks with Sri Lankan Prime Minister Ranil Wickremesinghe turned out satisfactorily as Gen Prayut marked the end to his two-day visit to the island nation yesterday by signing joint initiatives ranging from business and infrastructure development to tourism and judicial affairs.
Colombo views economic cooperation with Thailand as one of the keys to fueling its development while Bangkok sees a chance to open a new market and distribute Thai goods and services in Sri Lanka, Gen Prayut said yesterday morning.
One of the goals is an FTA the two countries have been planning since 2016 when Deputy Prime Minister Somkid Jatusripitak met high-ranking officials in Sri Lanka.
After talks with Sri Lankan President Maithripala Sirisena on Thursday, Gen Prayut said he believes the memorandum of understanding on a strategic economic partnership will go hand in hand with stronger economic cooperation, including attempts to forge the FTA.
The two leaders witnessed the MoU signing ceremony during this official visit.
"We'll speed up FTA talks," Gen Prayut said, adding that progress would benefit both sides as they aim to increase bilateral trade to US$1.5 billion (49.2 billion baht) by 2020.
Sri Lanka ranks as Thailand's fourth-largest trading partner in South Asia.
From 2013-17, bilateral trade averaged $491 million a year.
It jumped 8.7% to $513 million last year, with Thai exports accounting for $442.3 million and imports making up the rest.
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.
Gen Prayut said the two sides will further develop their connectivity between cities.
"Colombo and Ranong will be [more economically] connected as another effort to help drive economic cooperation," Gen Prayut said, seeing an opportunity to boost the local economy of this southern Thai province on the Andaman coast.
Sri Lanka, which lies about 30km off the southeast coast of India, is strategically significant to China's One Belt One Road Initiative, according to Thai Ministry of Foreign Affairs.
China's signature economic initiative, announced by President Xi Jinping in 2003, is a US$1.5 trillion infrastructure project spanning 80 countries.
It will link China with international communities through a complex network of ports, roads, railways and industrial parks.
Gen Prayut said "investment can't be made without considering the environment and people of Sri Lanka. We also need to think about human rights when doing businesses".
Other agreements signed during the prime minister's visit include a Treaty on the Transfer of Offenders and a pact dubbed Cooperation in the Enforcement of Penal Sentences.