AEC WILL COME WITH STIFF COMPETITION, SMES WARNED

       Incompetent small and medium-sized enterprises could be wiped out by waves of better-quality goods from the Asean Economic Community (AEC), researchers warned yesterday."Thai SMEs could lose out if they cannot increase their efficiency," said Aat Pisanwanich, director of the
       Centre for International Trade Studies at the University of the Thai Chamber of Commerce.
       By 2015, they may have to shut down if they lack knowledge and research-and-development capabilities to stand up to other Asean enterprises, a new study conducted by the centre showed.
       The AEC, whose measures will start going into effect next year, is expected to create an initial trade deficit of Bt923 million per year in the SME sector, due to the invasion of more competitive goods in the domestic market.
       "Although the overall exports of SMEs will increase 10.7 per cent to Bt35.9 billion in 2015, imports will also jump 13.9 per cent to Bt38.03 billion in the same period," Aat said.
       The eight SME categories that will be the hardest hit are electronics and electrical appliances, garments and textiles, chemical products, rubber and plastic, wood products, petroleum, mining, and steel.
       SMEs need to understand more about how to take advantage of trade liberalisation among Asean countries, he said. But so far, the government has not provided help to develop SMEs' edge amid Asean's economic integration.
       The government should draw up a strategy to strengthen SMEs. It must help promote the development of industry clusters from upstream to downstream.
       The government should also closely monitor imports.
       Local companies should further develop their product quality and create added value, while lowering production and logistic costs to ensure better competitiveness with other Asean countries.
       The centre's study also found that incomes for farmers would not improve as a result of the regional economic integration.
       On average, farm income will rise only Bt23 a month towards 2015, while income for industrial workers will rise Bt118 a month during the period.
       Chainant Ukosakul, vice chairman of the university's committee on trade rules and international trade, questioned whether Thailand was ready for free trade in Asean, because SMEs were still in the dark about the AEC.
       He urged the government to provide more information on the opening of trade in both goods and services, which could create new challenges for smaller businesses.