Sri Lanka thinks that by signing a Free Trade Agreement (FTA) with Thailand, it will be able to overcome its worst financial crisis in decades.
“This move aims to enhance market opportunities, with negotiations covering various aspects such as Trade in Goods, Investment, Customs Procedure, and Intellectual Property Rights,” read a statement published on Saturday by the Sri Lankan president’s media department.
The island nation has been putting more of an emphasis on trade agreements to promote economic growth and support its devastated economy, which the World Bank estimates shrank by 3.8 percent last year as a result of a severe foreign exchange crisis that also threw it into a larger financial crisis.
Srettha Thavisin, the prime minister of Thailand, led a delegation that traveled to Colombo on Saturday to sign the free trade agreement and other documents. Srettha will also be present for Sunday’s 76th Independence Day festivities in Sri Lanka.
“This will provide tremendous business opportunities for both sides. We encourage our private sectors to explore the potentials of two-way trade and investment,” Srettha told a joint media briefing following the signing of the deal.
A new agreement on aviation services was also inked by the two nations.
According to figures from the Sri Lankan central bank, bilateral commerce between Thailand and Sri Lanka was valued at approximately $460 million in 2021.
Sri Lanka imports food, rubber, plastics, medicines, electronics, and precious stones from Thailand and mostly exports tea and precious stones.