Sri Lanka and Thailand Free Trade agreement in the works
Sri Lanka and Thailand are expected to enter into a Free trade agreement which is likely to triple bilateral trade to USD 1.5 billion over the next five years. The proposal came after a visit by Sri Lankan Development Strategies and International Trade Minister Malik Samarawickrema to Thailand’s Deputy Prime Minister Dr. Somkid Jatusripitak. His call for deeper economic ties with a strategic partnership which was welcomed by Minister Samarawickrema went on to identify focus areas for the FTA.
Agriculture, gem and jewellery, electronics, rubber and automotive parts were some of the areas identified by the minister. Areas such as processed foods, industrial parks and tourism were also identified as priority areas.
During the visit Deputy Prime Minister Somkid, agreed to lead a high-level delegation to Sri Lanka in August 2017 with the intention of progressing the FTA. Thai Industry Minister Dr. Uttama Savanayana, who met with the Sri Lankan delegation also suggested due to availability of high quality Sri Lankan gem stones joint ventures could be set up with Minister Samarawickrema requesting Thailand to support Sri Lanka in technological knowledge, capital requirements and diplomatic ties. The Thailand also submitted a draft MoU on Economic Strategic Partnership to Sri Lanka and an action plan is to be signed during the visit of Thailand Deputy Prime minister to Sri Lanka.
Following these discussion, a Thailand Think Tank arrived in Sri Lanka to study feasibility of setting up a FTA with Sri Lanka. Thai Fiscal Policy Research Institute, which advises the Thai cabinet visited the Board of Investment to obtain facts about Sri Lanka’s business climate and economy. The delegation was led by Mr. Pisesporn Wasawong and Mr. Jittima Nakamano – Consul (Commercial) and Director of Thai Trade Center with two officials of the Ministry of Commerce of Thailand as well.They studied a number of initiatives by the BOI such as the export processing zones and expressed an interest on other development projects currently in progress such the western Megapolis.
OSL TAKE
The FTA has the potential to become a true asset to Sri Lanka in terms of expanding its market share. It also opens up a considerable number of opportunities for trade between the two countries, which will allow Thai companies to enter Sri Lankan market place at competitive levels. Sri Lanka has a long standing diplomatic relationship with Thailand and the FTA will serve to solidify the same with an elevated status of a strategic economic partnership.
The trade between two countries is currently at USD 550 Million and tripling this within within a 5 year period would bring tremendous value to Sri Lankan economy. Already many companies in Sri Lanka have made plans to work with Thai companies and Thai companies have opened up opportunities to enter Thailand marketplace as well. Also, the technical expertise that will be gained through this FTA will enable Sri Lanka to establish a long term strategy in economic development.
| Article Code : | VBS/AT/28082017/Z_1 |