Thailand-Sri Lanka free trade agreement to see 30% export growth in apparel and tea expected
The Morning: The proposed Trade Agreement between Sri Lanka and Thailand (SLTFTA) expects growth in Sri Lanka’s two major exports – apparel and tea, The Daily Morning Business learnt.
Speaking to The Daily Morning Business, International Trade Office (Leader of SL delegation) Chief Negotiator K.J. Weerasinghe said: “We expect a 30% increase in exports to Thailand to be included to this benefit and one of the main two items will be the apparel and tea.
He added Sri Lanka is still in the process of negotiating to increase Sri Lanka’s export quota on tea from the usual quota of 650 metric tonnes.
“Therefore currently, we are proposing that Sri Lanka needs a special quota outside the global quota of 650 metric tonnes and the apparel products we have identified for which we are seeking market access immediately from Thailand.”
The said agreement is to have a tariff liberalization programmed to provide immediate concession for around 500 Sri Lankan products that are already being exported to Thailand.
“There are other products we have identified which have market potential and which can be exported to Thailand,” Weerasinghe noted citing the study carried out with the collaboration of the Department of Commerce (DOC) and Export Development Board (EDB) of Sri Lanka on current exports and potential export products.
According to Weerasinghe, apart from Ceylon tea and apparel, Sri Lanka is to negotiate on exporting fish products, coconut-based products, spices, minerals, cosmetic products, rubber-based products, glassware and ceramics to Thailand.
Moreover, there are reciprocal trading agreements where Thailand’s list includes chemicals, pharmaceuticals, fertilizer, tobacco, wood products, paper products and certain footwear items.
At the same time, the Institute of Policy Studies (IPS) feasibility study indicated the full implementation of the FTA is expected to grow by over 38%.
The SLTFTA is expected to be signed on 3 February 2024, said the Cabinet Spokesman Minister Bandula Gunawardana during the recent cabinet press conference.
Sri Lanka is in the process of reviewing and revamping the country’s existing trade ties while also looking at further expansion of trade agreements with more foreign countries. It is in such a backdrop that Sri Lanka is looking at finalizing a free trade agreement (FTA) with Thailand. Sri Lanka already enjoys several operational FTAs with countries in the South Asian region like India and Pakistan. The country is also working on a trade agreement with Bangladesh. However, the existing trade agreements and the new ones in the pipeline indicate that Sri Lanka would enjoy strong trade ties with many key Asian markets. With Sri Lanka’s economy on an expansion path, Thai businesses/investors could confidently explore the growing opportunities in Sri Lanka. Also, foreign businesses/investors interested in doing business in Asia could look at setting up base in Sri Lanka to engage with other countries in the region.
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