Sri Lanka signs free trade agreement with Thailand to revive economy

In a significant move, Sri Lanka has inked a Free Trade Agreement with Thailand on Saturday as it strives to overcome its most severe financial downturn in years. According to World Bank estimates, the country’s economy shrank by 3.8 percent last year, largely due to a severe foreign exchange shortage that precipitated the financial turmoil.

A Free Trade Agreement was signed at the Presidential Secretariat between #Thailand & #SriLanka aimed at enhancing market opportunities, with negotiations covering various aspects such as Trade in Goods, Investment, Customs Procedure & Intellectual Property Rights.#DiplomacyLK pic.twitter.com/TiZDvwsFsS

— President's Media Division of Sri Lanka - PMD (@PMDNewsGov) February 3, 2024

The Free Trade Agreement (FTA) is aimed at enhancing market opportunities, with negotiations covering various aspects such as Trade in Goods, Investment, Customs Procedure and Intellectual Property Rights, the short statement added. With its economy battered and facing a deepening crisis, Sri Lanka has been prioritising trade agreements to stimulate growth. A delegation headed by Thai Prime Minister Srettha Thavisin arrived in Colombo on Saturday to sign the FTA along with other agreements and Thavisin will also attend Sri Lanka’s 76th Independence Day celebrations on Sunday. The two countries also signed a new bilateral air services agreement, providing for liberalized air services between the two countries. The countries’ two-way trade was worth about $460 million in 2021, Sri Lankan central bank data shows. Sri Lanka exports mainly tea and precious stones to Thailand and imports electronic equipment, food, rubber, plastics and pharmaceuticals.