Feb 18, Bangkok: Thailand and Sri Lanka are set to sign a free trade agreement (FTA) later this year, aiming to triple bilateral trade to US$1.5 billion over the next five years.
Thai Deputy Prime Minister Somkid Jatusripitak, who met with Sri Lanka's Development Strategies and International Trade Minister Malik Samarawickrama on Saturday said the two countries aimed to sign the FTA this August, when he is scheduled to lead Thai investors to visit Sri Lanka, according to the Bangkok Post.
Mr Somkid said he also proposed that Thailand and Sri Lanka conduct parallel strategic cooperation in certain areas which will expedite mutual economic benefits for the two countries, as FTAs require time for negotiations.
The cooperation is set to be conducted both on a government-to-government and private-to-private basis.
Mr Somkid said the sectors in which Sri Lanka is eager to attract Thai investment include Jewellery, electronics, consumer products and industrial estates.
He suggested that industrial estate development be implemented in the same way as at the Tilawa industrial estate in Yangon, a joint project between the state and private sector in Myanmar which has helped speed up development.
Mr Somkid said Sri Lanka is a significant strategic location for Thai investors, thanks to its cheap labor.
He also noted that Sri Lanka already has FTAs in place with India and Pakistan, two large markets and China has already invested in building a large port which will be instrumental in boosting Sri Lanka's shipments to the western market.
Sri Lanka and Thailand began looking at formulating a FTA last year when Mr Somkid made an official visit to the island nation.
The two countries also signed a memorandum of understanding on technical cooperation, a letter of intent on cooperation in small and medium-sized enterprise development and a joint action program on tourism for the 2016-2018 period.
According to the Commerce Ministry, two-way trade between Thailand and Sri Lanka totaled $476.9 million in 2016, down 2.3% from a year before. Exports accounted for $436.9 million, up 0.67%, while imports were down 26.1% to $39.9 million.