Sri Lanka–Thailand FTA to be signed in March 2024 to boost exports
By: Staff Writer
Colombo (LNW): The Government is set to sign the impending free trade agreement (FTA) with Thailand within the first quarter of 2024 at least by March, to boost exports from the country by three folds to $ 1.5 billion.
Sri Lanka exports to Thailand last year and year before stood at US $ 62 million varying it from $58 million in 2018, $101 million in 2019 and $ 39 million in 2020.
Imports from Thailand has come down to $293 million due to government’s restrictions from $ 497 in 2018, $437 million in 2019 $ 363 in 2020 and $398 million in 2021, finance ministry data shows.
This was clear indication of the trade between the two countries favorable for Thailand during the past five years.
.Inking the FTA with Thailand is the first step to joining the Regional Comprehensive Economic Partnership (RCEP) trade agreement and a step towards strengthening traditional ties with the country.
Sri Lanka and Thailand initiated the proposal in 2016, and the negotiations commenced in 2018 with two rounds of discussions in the same year, whilst the third round of discussion concluded in January 2023.
President Ranil Wickremesinghe briefed the Cabinet on the progress of the discussions between the two countries, including the deal with trade in goods and services, investment rules, customs cooperation, trade facilitation and economic cooperation.
Cabinet spokesman Bandula Gunawardena disclosed that the objective of the Government is to boost exports from the current $ 550 million to $ 1.5 billion via Sri Lanka and Thailand FTA.
“Bilateral, regional and multilateral trade and investment agreements encourage boosting foreign inflows which is critical for Sri Lanka right now. These FTA are tools to boost the foreign inflows into the country to reduce the burden on the current account,” Gunawardena explained.
Accordingly, negotiations pertaining to the proposed FTA are scheduled to conclude in February 2024, as per the information presented by the President on the progress of the fifth round of negotiations on the proposed trade agreement, during the cabinet meeting held July 24.
The fifth round of negotiations on the proposed agreement was held in Colombo from 26 -28 June, during which discussions regarding customs cooperation and trade facilitation, economic cooperation as well as sanitary and phytosanitary chapters were completed.
The next round of negotiations is scheduled to take place in Thailand from August 21st to 23rd, 2023. Three additional rounds are planned to conclude the Agreement by February 2024, with the signing expected to occur in March 2024.
Sri Lanka aims to expand its economic reach first within South Asia and then extend further eastward to become a part of the Regional Comprehensive Economic Partnership (RCEP).
Sri Lanka will formally request the member countries of RCEP to support its application. Given Thailand’s active participation in both ASEAN and RCEP, Sri Lanka will seek Thailand’s support in joining RCEP.