Sri Lanka to begin trade talks with India, China and Thailand again

After a four-year hiatus, Sri Lanka will restart negotiations on trade pacts with India, China and Thailand, Reuters quoted an official as saying. Aiming to seal deals to help it rebuild its economy, Sri Lanka is in the midst of its worst financial crisis in over seven decades. It was triggered by a severe shortage of foreign exchange that has left the country struggling to pay for fuel, food and medicine.

On Monday, officials from Thailand are scheduled to arrive in Sri Lanka to start the third round of talks after negotiations were suspended in 2018, said K.J. Weerasinghe, Sri Lanka's Chief Negotiator of Free Trade Agreements (FTAs). Likewise, negotiations with India and China are expected to begin in February and March. Both India and China are Sri Lanka's biggest trading partners accounting for about $5 billion each in bilateral trade in 2021.The focus is on improving economic cooperation and attracting investment, which is crucial for Sri Lanka to emerge for this economic crisis," Weerasinghe told Reuters.

"My main goal is to have all these deals completed by the end of 2023 or early 2024."Auramon Supthaweethum, Director General of Thailand's Department of Trade Negotiations, said talks had been delayed because of Sri Lanka's economic crisis and the COVID-19 pandemic

We are heading there to continue the discussion," Supthaweethum said.

Bilateral trade between Thailand and Sri Lanka totaled around $460 million in 2021, according to Sri Lanka's central bank data.Meanwhile, Sri Lanka is aiming to deepen an existing FTA with India into a Economic and Technology Agreement after talks stalled in 2018. FTA discussions with China too stalled in 2018 over disagreements about the pace of liberalizing of Sri Lanka's economy, Weerasinghe said.

Weerasinghe added both countries have responded positively to resuming talks but specific dates are yet to be finalised.As per details, Sri Lanka's economy is projected to have contracted by 8.7% in 2022, but a recovery is expected in the second half of 2023, the central bank said.The country signed a preliminary agreement for a $2.9 billion bailout package with the International Monetary Fund last September but has to put its debt on track before disbursements can begin.Sri Lanka to begin trade talks with India, China and Thailand again

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