News
FTA with Thailand: Need for SL to diversify trade portfolio stressed
By Rathindra Kuruwita
Over 50 percent of Sri Lankan exports to Thailand are gems, and Sri Lanka doesn’t face any trade barriers when exporting precious stones, Subhashini Abeysinghe, says Research Director at Verité Research.
Commenting on the recent free trade agreement between the two nations, she said in a recent television interview that Thailand imported around 300 billion U.S Dollars worth of goods each year, and Sri Lanka’s exports there amounted to about 100 million dollars.
“Thailand is one of the top sources for manufacturing and exporting jewellery. On the other hand, while Sri Lanka has a lot of gems, we are not a country that exports jewellery. We face no trade barrier in exporting gems to Thailand because they are an essential part of manufacturing jewellery,” she said.
Abeysinghe said the purpose of a free trade agreement (FTA) was to remove barriers to trade. She said that 30 percent of the types of goods Thailand already exports were not subjected to any tariffs.
“This means about 3,000 goods Thailand imports are already not taxed. These goods amount to 56 percent of total imports to Thailand. So, we already have duty-free access to over 150 billion dollars in the market, but we export miniscule amounts,” she said.
Abeysinghe said Sri Lanka had not been able to attract FDIs in manufacturing export-oriented products. Sri Lankan policymakers believed that the country would be able to attract such FDIs, if investors saw that Sri Lanka could export goods to many destinations without tariffs.
There was speculation that once the FTA with Thailand was signed, Sri Lanka would be able to attract Thai tourists, especially Buddhist tourists, she said, adding that Sri Lanka had the potential to develop Buddhist tourism.
“However, Thai tourists already have access to on-arrival visa facilities. Given that, I am not sure whether we can attract Thai tourists through an FTA. We can make things easier for tourists by changing the laws and regulations in the country. We don’t need an FTA for that,” she said.
Abeysinghe said Sri Lanka had an FTA with Singapore, a country that already had very low trade barriers. However, Thailand had trade barriers. For example, Sri Lankan garments face a 25 percent tariff when they enter the Thai market, she said.
She said in all trade agreements there was a “negative list,” a list of items that were not subjected to tariffs. Here, both Sri Lanka and Thailand have not relaxed duty on about 15 percent of imports.
“When we look at the FTA with Thailand, both sides have relaxed about 50 percent of the items that are traded. This is also divided into two categories, i.e., goods that are already not subjected to trade barriers and newly relaxed items. As we said earlier, already 30 percent of our exports are not subjected to barriers in Thailand. So, Thailand has only relaxed trade barriers on 20 percent of our exports. On the other hand, only 18 percent of Thai exports are bereft of trade barriers in Sri Lanka now. Here, we must contrast this agreement with the FTAs with India and Pakistan. We speak only about customs duties in the FTAs with India and Pakistan. However, with regard to FTAs with both Singapore and Thailand, we speak about all import duties,” Abysinghe said.
There is a 20 percent customs duty when one imports goods to Sri Lanka. Moreover, there is also a 10 percent Ports and Airports Levy (PAL) and sometimes a 40 percent cess. Thus, the total tax is about 70 percent, she said.
“So, we have agreed to remove all 70 percent, not only customs duties,” she said.
When one looked at the FTA with Thailand, one could say Sri Lanka can export 5,000 items without any barriers, Abeysinghe said, adding that people tended to confuse product coverage and trade coverage.
“There are a lot of items here, but Sri Lanka produced very little. When we look at our export profile, 100 goods account for 80 percent of our exports. We have to see how many of these 100 items have been allowed into Thailand. When we look at the FTA, Thais have lifted barriers only on about 25 percent of those goods,” she said.
Abeysinghe said Thailand produced a large array of goods, and about 49 percent of their trade was covered by the FTA. The problem here was that, compared to Thailand, Sri Lanka did not produce diverse products at a competitive rate, she said.
“This is our Achilles’ heel. I am not sure whether the signing of an FTA will be a solution for this,” he said.
Abeysinghe said Sri Lanka was still heavily dependent on Western markets for its exports and relied on a few items like garments, tea, coconut and rubber.
“The fact that we have not been able to shift to Asian markets and most of our major exports are agricultural goods is a problem. ASEAN countries, on the other hand, are linked to global supply chains. Unlike them, electronics, machinery and components make up less than five percent of our exports. Thais import a lot of such goods. But they hardly import any garments. There is a big mismatch here,” she said.
Prime Minister Dr. Harini Amarasuriya stated that the Government stands ready to support the University of Peradeniya in rebuilding stronger, safer, and more resilient than before. She made these remarks while visiting the University of Peradeniya on Sunday (07), where she met with student representatives and Heads of Departments affected by the sudden floods that swept through the campus on 27 November.
The visit aimed to personally inspect the damage, which caused extensive harm to academic buildings, student facilities, and key infrastructure. University officials briefed the Prime Minister on the severity of the impact, highlighting significant losses to the Faculties of Management, Agriculture, and Veterinary Medicine, as well as the IT Centre, CDCE, gymnasium, swimming pool, and playgrounds.
The Prime Minister was also briefed on how the disaster disrupted both academic activities and the wellbeing of students and staff, including the loss of more than 110 computers, vital laboratory equipment, examination documents, and four central IT servers, with preliminary damage estimates exceeding Rs. 6 billion. She commended the swift evacuation of nearly 750 students from hostels located along the Mahaweli River and acknowledged the resilience shown by nearly 11,000 students who remained on campus during the crisis.
She expressed her appreciation to the Sri Lanka Army, the Disaster Management Centre, and local donors for providing food, water, and essential supplies at a time when access and communication were severely disrupted.
A joint engineering team has confirmed that university buildings remain structurally stable, although several require urgent repairs. With academic activities suspended until 15 December.
The Prime Minister discussed with the Vice Chancellor and emergency response teams the immediate steps required to restore normalcy and provide necessary support to students whose studies and daily routines have been significantly affected.
During these discussions, the Prime Minister issued a series of directives focusing on both immediate relief and long-term safety. These include restoring essential services such as water, electricity, and safe access pathways for students; accelerating the rehabilitation of heavily damaged faculties and laboratories; strengthening early warning systems for flood-prone areas; and implementing long-term mitigation measures such as riverbank protection, improved drainage, and the relocation of vulnerable facilities. She also directed the relevant agencies to fast-track government assistance, assuring the university community that the Government stands ready to help Peradeniya rebuild stronger, safer, and more resilient than before.
The meeting was attended by Nalaka Kaluwewa, Secretary to the Ministry of Education, Higher Education and Vocational Education; Kandy District Parliamentarian Thanura Dissanayake, Professor Terrence Madhujith, Vice Chancellor of the University of Peradeniya; and Professor R. W. Pallegama, Deputy Vice Chancellor of the University of Peradeniya, along with Heads of Departments, officials, and student representatives of the University of Peradeniya.
[Prime minister’s media division]
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Level III landslide early warnings issued to the Districts of Kandy, Kegalle, Kurunegala and Matale extended till 1600 hrs on Tuesday [09]
The Level III RED landslide warnings issued to the districts of Kandy, Kegalle, Kurunegala and Matale by the landslide early warning center of the National Building Research Organisation [NBRO] have been extended till 1600 hrs on 09th December 2025.
Accordingly,
The LEVEL III RED warnings issued to the Divisional Secretaries Divisions and surrounding areas of Hatharaliyadda, Yatinuwara, Ududumbara, Pathahewaheta, Medadumbara, Pasbage Korale, Deltota, Poojapitiya, Ganga Ihala Korale, Panvila, Gangawata Korale, Udapalatha, Harispattuwa, Kundasale, Minipe, Doluwa, Thumpane, Akurana, Udunuwara and Pathadumbara in the Kandy district, Kegalle, Galigamuwa, Mawanella, Bulathkohupitiya, Aranayaka, Yatiyanthota, Rambukkana and Warakapola in the Kegalle district, Mawathagama, Mallawapitiya and Rideegama in the Kurunegala district, and Naula, Wilgamuwa, Pallepola, Ambanganga Korale, Laggala Pallegama, Ukuwela, Rattota, Matale and Yatawatta in the Matale district have been extended.
In the meantime,
LEVEL II AMBER warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Uva Paranagama, Meegahakivula, Badulla, Kandeketiya, Bandarawela, Soranathota, Hali_Ela, Ella, Lunugala, Welimada, Haputhale, Passara and Haldummulla in the Badulla district, Dehiowita, Ruwanwella and Deraniyagala in the Kegalle district, Alawwa and Polgahawela in the Kurunegala district, Ambagamuwa Korale, Hanguranketha, Mathurata, Norwood, Kothmale West, Nuwara Eliya, Thalawakele, Nildandahinna, Walapane and Kothmale East in the Nuwara Eliya district, and Kahawatta, Godakawela and Kolonne in the Ratnapura district.
LEVEL I YELLOW warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Yakkalamulla and Elpitiya in the Galle district, Attanagalla, Mirigama and Divulapitiya in the Gampaha district, Narammala in the Kurunegala district, and Eheliyagoda, Opanayake, Kalawana, Imbulpe, Kaltota, Kiriella, Kuruwita, Nivithigala, Ayagama, Pelmadulla, Balangoda, Elapatha and Ratnapura in the Ratnapura district
A special District Coordinating Committee meeting, convened to review the damage caused to the agricultural sector in the Nuwara Eliya District due to Cyclone Ditwah and to discuss the urgent measures required, was held this morning (08) at the Nuwara Eliya District Secretariat. The meeting was chaired by President Anura Kumara Dissanayake, with the participation of the relevant responsible officials.
Due to adverse weather conditions, 1,421 hectares of vegetable cultivation in the Nuwara Eliya District has been damaged. President Anura Kumara Dissanayake instructed the relevant officials to take the necessary measures to provide compensation to farmers without delay.
Officials stated that although there has been crop damage, the reduction in the vegetable harvest in the Nuwara Eliya District would be around 25%. They added that Nuwara Eliya district would be able to meet the daily demand, but a decrease in the daily demand has been observed.
Officials further pointed out to the President that the reason for this decline is the spread of false information claiming a vegetable shortage in the Nuwara Eliya District and that prices have excessively increased.
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