Sri Lanka to fast-track trade pact with Thailand amid economic crisis

Debt-stricken Sri Lanka is fast-tracking efforts to seal a stalled trade pact with Thailand in order to boost trade and tourism, and improve the foreign currency shortage that has led to its worst economic crisis, a government minister said on Tuesday.

Sri Lanka began talks with Thailand on a free trade agreement in 2016, held two rounds of discussions in 2018, and the latest last month. But government spokesman Bandula Gunawardena said there's been a huge delay and Sri Lanka is now determined to sign the agreement before the end of March.

The trade pact aims to boost two-way trade from $550 million to $1.5 billion.

Sri Lanka is also in talks with neighbouring India and China to reach trade agreements. The country is bankrupt and has suspended repayment of its $51 billion foreign debt, of which $28 billion must be repaid by 2027.

Gunawardena said the agreement with Thailand would help Sri Lanka to boost trade, tourism and investment and help resolve its foreign currency shortage.

Sri Lanka has reached a preliminary agreement with the International Monetary Fund on a $2.9 billion rescue package over four years. Its completion hinges on assurances on debt restructuring from creditors that include China, India and the Paris Club, a grouping of major creditor nations.