Thai Prime Minister Srettha Thavisin is expected to visit Sri Lanka and sign the Sri Lanka-Thailand Free Trade Agreement (FTA), according to officials.
It will be Sri Lanka’s fourth free trade agreement, following agreements with India, Pakistan, and Singapore. In key areas such as tea, coconut milk, and clothing, the country will gain duty-free access to the Thai market.
The FTA with Thailand—after just eight rounds of talks starting in January this year—is seen as a welcome development amid ongoing, more difficult negotiations with India to finalise the overdue Economic and Technology Cooperation Agreement, and also with China. “Thailand is very flexible and understanding and the cultural links helped a lot,” one official said. Sri Lanka receives immediate duty-free access to the Thai market for several items. For instance, while Thailand will maintain a quota for Sri Lankan tea (with no imports allowed beyond that limit), it will remove the prevailing 30 per cent duty imposed on it. Thailand will also remove the 54 per cent duty on desiccated coconut (although there is, again, a quota).
The two countries will import and export tariff-free each other’s coconut milk, which comes in different varieties. Thailand will waive duties on 15 types of garments to which Sri Lanka has requested duty-free access. These include lingerie and other speciality items the country is best known for, the officials said.
In addition to the immediate list, Thailand and Sri Lanka have committed to a greater tariff liberalisation programme over 15 years. “Thailand has around 11,000 tariff lines, while we have an average of 8,500 tariff lines,” an official explained. “Each country will liberalise 80 per cent of these, partially liberalise 5 per cent, and the rest will remain on the negative lists.”
Negative lists contain items on which no concessions (no reduction in import tariffs) would be allowed. At present, Sri Lanka’s negative lists include agriculture and fisheries items, among other things.
Negotiations first started in the 2015–17 period, when three rounds were held. But all FTA talks—including with China and India—were put on hold after 2018. The Thai deliberations resumed in January this year.
Meanwhile, Sri Lanka expects to have three days of discussions on January 8–10 with India regarding the ETCA. This will be their 13th round. Officials said the process was “a bit hard, compared to Thailand”.
About the proposed FTA with China, Sri Lanka is waiting for dates for the seventh round. “We expect it to happen in April,” the official said, adding that President Ranil Wickremesinghe also wanted talks to start for an FTA with Malaysia. Sri Lanka has sent a formal letter in this regard to Malaysia.
But Sri Lanka must conduct a feasibility study, which, it is expected, will be done concurrently with the start of talks. “We have suggested that we start negotiations to decide the scope during the latter part of March or the beginning of April and to start a feasibility study in parallel,” the official said.
The World Bank has offered funding for the study. President Wickremesinghe is keen that Sri Lanka join the Regional Comprehensive Economic Partnership, the world’s largest free trade agreement covering 15 countries. Its members include Malaysia, Singapore, China, Japan, Brunei, Cambodia, Laos, Thailand, Vietnam, Australia, New Zealand and South Korea.
Source : Sunday times
