On June 2, 2017, Thailand hosted the 2nd Thailand-Sri Lanka Sub–Committee on Trade Related Matters, co-chaired between Mr. Boonyarit Kalayanamit, the Director-General of the Department of Trade Negotiations and Mrs. Sonali Wijeratne, the Director-General of the Department of Commerce, Sri Lanka, to discuss ways to strengthen the trade relations, create strategic economic partnerships, as well as arrange for Thai-Sri Lankan free trade agreement.
Mr. Boonyarit Kalayanamit, the Director-General of the Department of Trade Negotiations, revealed that the meeting turned out very successful despite the delay after its first meeting 12 years ago. This meeting restored key mechanisms of trade and investment cooperation between Thailand and Sri Lanka and it was also a crucial step towards closer bonds and more exchanges of economic interests. The meeting also discussed the feasibility of free trade agreement (FTA) between Thailand and Sri Lanka, whereby both parties will be required to carry out domestic procedures for approval prior to further negotiation.
In addition, both parties have jointly developed a strategic partnership for economic development especially in areas where Thailand and Sri Lanka have the potential to support one another including infrastructure, agro-industry, food processing industry, fishery and processing industry, gem and jewelry Industry, tourism industry, financial cooperation, and small and medium enterprises. Both parties aimed to endorse the Memorandum of Understanding on the development of strategic economic partnership during the visit to Sri Lanka by the Deputy Prime Minister, Mr. Somkid Jatusripitak, this August.
Sri Lanka is an interesting emerging market because during the past five years, 2012-2016, the average economic growth rate has been up to 6.5 percent. In addition, it is in China’s Belt and Road Initiative and thus it is projected to tremendously receive economic and commercial expansion. Considering the fact that Sri Lanka is well abundant in natural resources, particularly including gems and marine animals, it would become a major source of raw materials. Since, Sri Lanka already has FTAs with India and Pakistan and it is also in a process of negotiating with China and Singapore plus the fact that it also receives GSP Plus trade benefits from the European Union, it is undeniable that these factors would make Sri Lanka an important strategic economic partner for Thailand.
Currently, Sri Lanka is Thailand’s fourth largest trading partner in South Asia apart from India, Pakistan and Bangladesh, respectively. Over the past five years, 2012-2016, the average total trade volume has been $500.20 million. In 2016, the total trade volume between Thailand and Sri Lanka was $476 million which can be divided into exports worth $430 million and import worth $40 million or in the other words, Thailand has always been the gainer in the trade balance.
Major Thai exports to Sri Lanka include dried fish, fabrics, car accessories and parts, machinery and parts, sugar, chemicals, plastic pellets, iron, steel, rubber products, as well as paper and paper products. Major Thai imports from Sri Lanka include jewelry, gems, silver and gold bars, plants and plant products, ready-made clothes, jewel accessories, other textile products, electrical machinery and parts, coffee, tea, spices, chemicals, fabrics, and mechanic machinery and parts.