Effects of the Trade Liberalization in the ASEAN Community on SMEs’ Production Costs between Songkhla, Thailand and Kedah, Malaysia

Abstract

The study of factors influencing an average cost per labor of small enterprises under trade liberalization in the ASEAN Community comparing between Songkhla, Thailand and Kedah, Malaysia is indicated that the Songkhla SMEs could not take benefit from the trade liberalization in the ASEAN Community as they have been focusing on selling intermediate goods mainly in domestic and exporting to countries outside ASEAN. Vice Versa, The Kedah SMEs could gain more than Songkhla SMEs as ASEAN countries because their main markets produce both intermediate and finished goods for sale as well. Hence,
when non-tariff barriers are eliminated due to the trade liberalization, the Kedah SMEs could increase their sale, remarkably. For these reasons, to boot up Halal food SMEs in Songkhla, the government should encourage them to extend markets to ASEAN countries and increase a portion of producing finished goods
in order to gain benefit from the trade liberalization and strengthen their ability to compete in international markets.