Thailand and Sri Lanka inked a Free Trade Agreement on Saturday, a strategic move by Sri Lanka to navigate its way out of the worst financial crisis in decades.
The island nation has shifted its focus towards trade deals as a catalyst for economic revival, aiming to bolster its beleaguered economy, which the World Bank estimates contracted by 3.8% last year due to a severe foreign exchange crunch that exacerbated a broader financial crisis.
The Free Trade Agreement (FTA) aims to boost market opportunities, encompassing negotiations on Trade in Goods, Investment, Customs Procedure, and Intellectual Property Rights, as stated in a brief official statement.
A delegation led by Thai Prime Minister Srettha Thavisin arrived in Colombo on Saturday, not only to sign the FTA but also other agreements. Prime Minister Thavisin is set to participate in Sri Lanka’s 76th Independence Day celebrations on Sunday.
“This will create significant business opportunities for both nations. We urge our private sectors to explore the potential for two-way trade and investment,” stated Prime Minister Thavisin during a joint media briefing after the signing.
Additionally, the two countries concluded a new bilateral air services agreement, paving the way for liberalized air services between them.
According to Sri Lankan central bank data, the bilateral trade between the two nations was valued at about $460 million in 2021. Sri Lanka primarily exports tea and precious stones to Thailand, while importing electronic equipment, food, rubber, plastics, and pharmaceuticals.
