Sri Lanka-Thailand trade hits $ 600 m

Overall trade volume between Sri Lanka and Thailand increased to $ 600 million by 2011, Sri Lanka-Thailand Business Council data revealed.

Exports from Thailand to Sri Lanka include sugar, textile, dried fish, cement and chemical products while imports from Sri Lanka include gems and jewellery, tea, spices, fibre and metal products. Exports from Thailand to Sri Lanka has seen a steady increase from $ 150.23 million in 1997 to $ 486.95 million by 2011, while goods imported from Sri Lanka saw a reduction during 2002-2005 but increased to $ 93.12 million by 2011. Overall trade volume increased to reach $ 600 million by 2011.

The Sri Lanka-Thailand Business Council was set up in 2000. The Council has been promoting bilateral trade between the two countries. The Council has a membership consisting of many business institutions that trade with Thailand.

The Agreement on Economic and Technical Co-operation between Sri Lanka and Thailand was signed in January 1996 during the visit of the Sri Lankan Foreign Minister to Thailand.

The first meeting under this co-operation agreement was held in June 2000 in Bangkok. At this meeting the two sides reviewed the overall state of trade co-operation between the two countries and emphasised the need to further expand bilateral trade to its full potential.

Even though formal diplomatic relations between the two countries commenced in 1955 the actual Sri Lanka-Thailand relationship goes back to over 1,000 years. Buddhism is the common religion between these two countries since the Sukhothai period, B.E. 1800.

Thailand has been consistently recognised as one of the world's best places for the 'Ease of Doing Business', in 2012, the World Bank ranked Thailand 17th out of 183 countries.

Thailand's advantage as a location for foreign business is enhanced by the host of Free Trade Agreements (FTAs) and Early Harvest Schemes that provide duty-free import of raw materials and components, and duty free access to markets around the world. Thailand has already entered into agreements with ASEAN and countries such as China, India, Japan, New Zealand, and Australia.

Thailand has a population of 72 million and the labour force was 39 million in 2010.

In Thailand they offer foreign investors liberal investment policies such as, No foreign equity restrictions in manufacturing sectors, 100 percent foreign ownership in many services, No restrictions on foreign currency remittances, No export requirement and No local content requirement.

Agriculture, Agricultural products, mining, ceramics, basic metals, light industry, metal products, machinery, transport equipment, electronic industry, electric appliances, chemicals, paper, plastics, services and public utilities are eligible for BOI investment in Thailand. They also provide 100 percent land ownership rights to foreign investors under BOI rules. Investors are allowed to bring in foreign experts and technicians for their manufacturing or management work.

There are several Sri Lankan companies which do business in Thailand. These companies have invested more than 1.2 billion Baht and launched more than 15 projects in Thailand. Carbokarn Co Ltd, Multiplas Furnishing Co Ltd, Infant World Ltd, Dipped Products (Thailand) Ltd, Trans Ceylon Gems and Jewellery, Touchwood Asia Co Ltd and Shizuka Co Ltd are some of the leading investors in Thailand who have invested more than 75 percent.

Thailand's main activities are agriculture and agro-industry, research and development, software development, moulds and dies, biotechnology, alternative energy, manufacture of high-tech products and waste recycling and recovery.

Thailand being a world leader in agro-based products and also being the 19th largest agricultural output destination, Thailand is one of the world's leading producers of rice, despite the fact that the yield per hectare is low. In the early 1990s Thailand annually produced approximately 18.5 million metric tons of rice, up from about 11.3 million metric tons per year in the 1960s.

The second most important crop of value is rubber, which is raised mainly on plantations on the Malay peninsula.

In the early 1990s approximately 1.4 million metric tons of rubber was produced each year. Other important crops included cassava, sugarcane, maize, pineapples, coconuts, and Kenaf, a fibre used in making canvas. Livestock totalled about 6.8 million cattle, 4.8 million buffalo, 5.1 million pigs, and 153 million poultry.

The agro-industry plays a fundamental role in employment creation and income generation. Particularly the food and beverages processing sector remains important at all levels of economic development. An abundance of natural resources combined with significant investments in technology, food safety R and D and adhering to international quality standards have helped to dub Thailand as the 'Kitchen of the World'.

As a large sole net food exporter in Asia, Thailand is one of the world's largest producers of food products such as rice, canned tuna, frozen seafood, chicken and canned pineapple.

The One-Start-One-Stop Investment Center (OSOS) which is a one-time stop for investors was introduced in Thailand in 2009.

This helps investors to register a company, apply for investment promotion privileges, obtain a foreign business licence, tax registration and other essential business needs.

The South East Asian economies came together under the umbrella of the Association for South East Asian Nations (ASEAN) in 1967. Like their European counterparts, ASEAN was initially regarded more as a political forum, intended to provide a 'buffer' against the spread of communism in East and South East Asia, rather than as a group with an explicit commitment to promote economic cooperation in the region. Thus, it was almost 25 years after it was set up that ASEAN took the initiative to accelerate economic integration through the creation of a regional free trade area.

Sri Lanka, which had been invited to accept membership of ASEAN from its inception, opted instead to maintain its commitment to a 'non-aligned' status. Global economic changes in the 1980s, however, prompted Sri Lanka to review its position, vis-à-vis membership of regional blocs, and it became a member of the South Asian Association for Regional Cooperation (SAARC) in 1985.

The latter part of the 1980s saw a proliferation of new regional trade blocs, and the emergence of three distinct economic power blocs in North America, Europe and East Asia.

As the increasing cost of being on the periphery of these growth centres was becoming more apparent, Sri Lanka unsuccessfully sought to establish a dialogue partnership with ASEAN in 1992.

ASEAN's relations with third countries are presently at full dialogue or sectoral dialogue levels. The process of becoming a full dialogue partner starts with sectoral cooperation. The Prime Minister of Thailand is due to visit Sri Lanka next month which will help strengthen economic relations between the two countries.