By In a desperate attempt to revive its faltering economy, Sri Lanka has signed a crucial Free Trade Agreement (FTA) with Thailand. This landmark deal, signed on February 3rd, 2024, aims to boost trade and investment between the two nations, offering a potential lifeline to Sri Lanka as it grapples with its worst financial crisis in decades.
The agreement seeks to streamline procedures for trade in goods, investments, customs, and intellectual property, paving the way for increased economic activity. Sri Lanka, its economy battered by a severe foreign exchange crisis, hopes this FTA will stimulate much-needed growth. The World Bank estimates the island nation’s economy contracted by 3.8% in 2023.
Thai Prime Minister Srettha Thavisin, present at the signing ceremony in Colombo, emphasized the potential for “tremendous business opportunities” for both countries. He encouraged private sectors to explore the possibilities of increased trade and investment, fostering a spirit of mutual benefit.
The deal goes beyond goods and services, with Sri Lanka and Thailand also signing a new air services agreement. This aims to facilitate travel and tourism, potentially boosting another crucial sector for Sri Lanka’s economic recovery.
While bilateral trade between the two nations stood at around $460 million in 2021, the FTA promises significant expansion. Sri Lanka primarily exports tea and precious stones to Thailand, while importing electronics, food, and other essential goods
