“Sri Lanka-Thailand FTA to increase Lankan exports by 38%”
The recently signed Sri Lanka-Thailand Free Trade Agreement (SLTFTA) could increase Sri Lanka’s exports by 38% through tariff elimination.
This was opined by Research Fellow, Institute of Policy Studies (IPS), Dr. Asanka Wijesinghe, via research findings from the IPS at a knowledge session organised by The Ceylon Chamber of Commerce on the SLTFTA and its impact on Sri Lanka’s economic growth. He emphasised the importance of Sri Lanka focusing on manufacturing, apparel, rubber products, and food products under FTAs, as these sectors have high tariffs in Thailand, offering significant export potential.He suggested that FTAs can be a strategic tool for Sri Lanka to engage in targeted liberalisation and pursue growth through specialized trade agreements with specific countries, such as the potential agreement with the EU for electronic vehicle manufacturing components.
Chairman of the Ceylon Chamber, Duminda Hulangamuwa, while stressing the importance of facing global market competitiveness, emphasised that Sri Lanka needs to explore and leverage agreements strategically to be competitive with countries like Vietnam, Thailand, Malaysia, China, and Singapore. He asserted that sustained international trade growth can lead to an 8 to 9% economic growth rate, and the nation cannot rely on 2 to 3% growth.
Chief Negotiator, K. J. Weerasinghe, on the other hand, underscored the need to align with the government’s vision for global market access and attracting investments. He acknowledged, that Sri Lanka lost opportunities on the trade side in the last five years, and emphasised the need to act swiftly to capitalise on future opportunities. DG, BOI and Head of Investment Chapter, Renuka Weerakoon, emphasized that FTAs are crucial for Sri Lanka, given its small domestic market, and can lead to increased market access, Foreign Direct Investment (FDI), job opportunities, foreign exchange, innovation, technology transfer, and international trade networks.
Advisor, Ministry of Finance and Head of Trade in Services Chapter, Deshal de Mel, emphasized that the SLTFTA is part of a broader strategy to drive qualitative changes in Sri Lanka’s economic growth. He highlighted the importance of FTAs in the economic recovery strategy and the need for Sri Lanka to integrate into global and regional value chains. He observed that the non-tradable sector has dominated Sri Lanka’s economic growth, and moving forward, the country needs to move into non-debt- creating avenues and diversifying its exports beyond traditional products.
He noted that FTAs provide open access to regional trade value chains and create opportunities to participate in regional trade agreements to drive sustainable economic growth. He underscored that long-term economic growth is driven by productivity, which is ultimately determined by competitiveness in global markets.
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