Negotiation on a Sri Lanka-Thailand Free Trade Agreement (FTA) would be concluded by 2020, the Thailand Nation reported today quoting a high-ranking Thai official.
Auramon Supthaweethum, Director-General at the Thailand’s Department of Trade Negotiations said Thailand will host the second Thai-Sri Lanka FTA negotiations from Wednesday until Friday.
The first meeting was hosted by the Sri Lankan government in July when the two countries discussed brief outlines of the FTA, Auramon said.
“In the second meeting from September 19-21, we will start discussing the details of the FTA. We will discuss issues concerning market opening, trade in services, and further economic cooperation between the two countries, she said.
She said they will create seven working panels to evaluate and discuss different issues within the FTA.
“For example, the first panel will work on trade in goods between Thailand and Sri Lanka and will focus on negotiating tariff reduction. Meanwhile, the second panel will work on the ‘rule of origin’, a criterion that determines which type of goods are eligible for tariff reduction under the FTA,” she said.
Sri Lanka is Thailand’s fourth-largest trading partner in South Asia. Thai-Sri Lankan trade was valued at $319.6 million from January to July this year, with Thailand enjoying a large trade surplus with Sri Lanka. Thai imports were worth $47.9 million while exports were valued at $271.7 million.
Auramon said the prospects for Thai-Sri Lankan trade were promising, as the total trade value had increased by 6.7 per cent compared to the same period last year. Apart from opening markets to boost trade in goods, Thailand will also place emphasis on trade in services as Thai investors have a growing interest to invest in Sri Lanka’s tourism industry.
Various Thai international hotel brands have already invested and established themselves in Sri Lanka such as the Dusit Thani, Central, Minor Hotel and Amari groups.
“Thai investors are already investing in Sri Lanka without the FTA, hence, with the FTA, issues such as investing in established businesses, cooperation negotiations and buying Sri Lankan stocks will become more convenient. Sri Lanka presents a good trading opportunity for Thailand because it is beginning to open up its economy to foreign investors. Hence, if Thailand enters as one of the early investors in Sri Lanka, it may get tariff reduction benefits in the future when it comes to trading,” Auramon said.
“Furthermore, Sri Lanka currently has FTAs with India, Pakistan and Singapore and is also a part of China’s Belt and Road Initiative. Therefore, Sri Lanka can also be a pathway for Thailand to enter the Indian market,” she said.
Thailand’s main exports to Sri Lanka are dried fish, rubber and automobile parts while Thailand imports jewellery, gold and plant products from Sri Lanka. Thailand aims to increase bilateral trade to $1.5 billion by 2020.