PM says Sri Lanka trade deal on cards

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Prime Min­is­ter Prayut Chan-o-cha is op­ti­mistic about sign­ing a free trade agree­ment with Sri Lanka af­ter the two coun­tries level up their eco­nomic ties, but said full bi­lat­eral trade will “need time”.

Talks with Sri Lankan Prime Min­is­ter Ranil Wick­remesinghe turned out sat­is­fac­to­rily as Gen Prayut marked the end to his two-day visit to the is­land na­tion yes­ter­day by sign­ing joint ini­tia­tives rang­ing from busi­ness and in­fra­struc­ture de­vel­op­ment to tourism and ju­di­cial af­fairs.

Colombo views eco­nomic co­op­er­a­tion with Thai­land as one of the keys to fu­el­ing its de­vel­op­ment while Bangkok sees a chance to open a new mar­ket and dis­trib­ute Thai goods and ser­vices in Sri Lanka, Gen Prayut said yes­ter­day morn­ing.

One of the goals is an FTA the two coun­tries have been plan­ning since 2016 when Deputy Prime Min­is­ter Somkid Ja­tus­rip­i­tak met high-rank­ing of­fi­cials in Sri Lanka.

Af­ter talks with Sri Lankan Pres­i­dent Maithri­pala Sirisena on Thurs­day, Gen Prayut said he be­lieves the mem­o­ran­dum of un­der­stand­ing on a strate­gic eco­nomic part­ner­ship will go hand in hand with stronger eco­nomic co­op­er­a­tion, in­clud­ing at­tempts to forge the FTA.

The two lead­ers wit­nessed the MoU sign­ing cer­e­mony dur­ing this of­fi­cial visit.

“We’ll speed up FTA talks,” Gen Prayut said, adding that progress would ben­e­fit both sides as they aim to in­crease bi­lat­eral trade to US$1.5 bil­lion (49.2 bil­lion baht) by 2020.

Sri Lanka ranks as Thai­land’s fourth­largest trad­ing part­ner in South Asia.

From 2013-17, bi­lat­eral trade av­er­aged $491 million a year.

It jumped 8.7% to $513 million last year, with Thai ex­ports ac­count­ing for $442.3 million and im­ports mak­ing up the rest.

The strate­gic part­ner­ship will cover 10 sec­tors: in­vest­ment, in­fra­struc­ture, de­vel­op­ment of the agro-in­dus­try, fish­eries, gems and jew­ellery, tourism, SMEs, fi­nan­cial co­op­er­a­tion, pack­ag­ing in­dus­tries and IT sec­tor de­vel­op­ment.

The MoU also covers other sec­tors of mu­tual eco­nomic in­ter­est.

Gen Prayut said the two sides will fur­ther de­velop t heir connectivity be­tween cities.

“Colombo and Ranong will be [more eco­nom­i­cally] con­nected as an­other ef­fort to help drive eco­nomic co­op­er­a­tion,” Gen Prayut said, see­ing an op­por­tu­nity to boost the lo­cal econ­omy of this south­ern Thai prov­ince on the An­daman coast.

Sri Lanka, which lies about 30km off the south­east coast of India, is strate­gi­cally sig­nif­i­cant to China’s One Belt One Road Ini­tia­tive, ac­cord­ing to Thai Min­istry of For­eign Af­fairs.

China’s sig­na­ture eco­nomic ini­tia­tive, an­nounced by Pres­i­dent Xi Jin­ping in 2003, is a US$1.5 tril­lion in­fra­struc­ture project span­ning 80 coun­tries.

It will link China with in­ter­na­tional com­mu­ni­ties through a com­plex net­work of ports, roads, rail­ways and in­dus­trial parks.

Gen Prayut said “in­vest­ment can’t be made with­out con­sid­er­ing the en­vi­ron­ment and peo­ple of Sri Lanka. We also need to think about hu­man rights when do­ing busi­nesses”.

Other agree­ments signed dur­ing the prime min­is­ter’s visit in­clude a Treaty on the Trans­fer of Of­fend­ers and a pact dubbed Co­op­er­a­tion in the En­force­ment of Pe­nal Sen­tences.

Thai­land is propos­ing use of the early har­vest scheme (EHS) dur­ing the first round of free trade agree­ment (FTA) talks with Sri Lanka to ac­cel­er­ate im­ple­men­ta­tion, as talks be­gan yes­ter­day.

Deputy Com­merce Min­is­ter Chutima Bun­yapraphasara said the EHS will help the FTA con­clude ne­go­ti­a­tions faster.

Nor­mally FTA talks take 2-3 years at the soon­est be­fore a pact is set­tled.

The EHS is an agree­ment be­tween two states (or re­gional trad­ing blocs) that lib­er­alises tar­iffs on cer­tain goods pre­ced­ing the con­clu­sion of an FTA. India is par­tic­u­larly fond of such EHS ar­range­ments and has used them in the past as a trust-building mea­sure while an FTA is be­ing ne­go­ti­ated.

India used an EHS in 2003 with Thai­land, which paved the way to ne­go­ti­ate an FTA through the elim­i­na­tion of tar­iffs on 83 goods.

Ms Chutima said the gov­ern­ment as­signed Au­ra­mon Supthaweet­hum, di­rec­tor-gen­eral of the Trade Ne­go­ti­a­tions De­part­ment, as the ne­go­tia­tor for the scheme.

Prime Min­is­ter Prayut Chan-o-cha and Maithri­pala Sirisena, pres­i­dent of Sri Lanka, jointly an­nounced the first round of FTA talks on Thurs­day af­ter meet­ing in Colombo.

Ms Chutima also signed a mem­o­ran­dum of un­der­stand­ing (MoU) on a strate­gic part­ner­ship with Ma­lik Sa­ma­rawick­rama, Sri Lanka’s de­vel­op­ment strate­gies and in­ter­na­tional trade min­is­ter. The strate­gic part­ner­ship covers 10 sec­tors: in­vest­ment, in­fra­struc­ture, de­vel­op­ment of the agro-in­dus­try, fish­eries, gems and jew­ellery, tourism, SMEs, fi­nan­cial co­op­er­a­tion, pack­ag­ing in­dus­tries and IT sec­tor de­vel­op­ment.

Sri Lanka is the fourth-largest trad­ing part­ner of Thai­land in South Asia. Dur­ing 2013-17, bi­lat­eral trade be­tween Thai­land and Sri Lanka av­er­aged US$491 million (16.4 bil­lion baht) per year. Last year, bi­lat­eral trade to­talled $513 million, up 8.7% from 2016. Thai ex­ports ac­counted for $442 million and im­ports were worth $70.5 million.

Ms Chutima said Sri Lanka wants Thai­land to open im­ports for Sri Lankan prod­ucts, par­tic­u­larly for agri­cul­tural prod­ucts such as tea, fruit, tex­tile, jew­ellery, while Colombo is calling for more in­vest­ment from Thai in­vestors.

Thai com­pa­nies are set to in­vest in Sri Lanka in the sugar and sugar cane, fur­ni­ture, ce­ment and agri­cul­tural in­dus­tries, she said.

Mrs Au­ra­mon said the first round of FTA ne­go­ti­a­tions will cover the FTA frame­work on gen­eral is­sues, in­clud­ing tax re­duc­tion for­mat, sen­si­tive lists and trade rules such as san­i­tary and phy­tosan­i­tary mea­sures, ser­vices, in­vest­ment, and in­tel­lec­tual prop­erty.

The aim is to con­clude the FTA talks in 2020, and there will be two rounds of talks this year, she said, adding the se­cond round will be held in Thai­land in Septem­ber.

Sri Lankan Pres­i­dent Maithri­pala Sirisena, left, ac­com­pa­nies Prime Min­is­ter Prayut Chan-o-cha at the Pres­i­den­tial Sec­re­tar­iat in Colombo, Sri Lanka on Thurs­day.

Ms Chutima (front left) signs an MoU on strate­gic part­ner­ship with Ma­lik Sa­ma­rawick­rama, Sri Lanka’s min­is­ter of de­vel­op­ment strate­gies and in­ter­na­tional trade. The event was wit­nessed by Prime Min­is­ter Prayut Chan-ocha (seated, left) and Sri Lankan pres­i­dent Maithri­pala Sirisena.

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