The ASEAN Economic Community, which is to be established in December 2015, creates a huge potential for the streamlined flow of labor, goods and services, and investment capital across the region. 

There also will be tariff reductions and reform of certain administrative procedures. Indeed, improved economies of scale and scope, heightened competition, higher productivity, and increased foreign direct investments - all of these modifications should stimulate greater growth, generate more intra-regional trade, encourage the emergence of robust and globally competitive ASEAN enterprises, and lead to more jobs for all. 



However, along with these opportunities there are also potential challenges that Thailand has to be aware of and address in order to fully exploit the possible benefits arising from the country's entry into the wider ASEAN market.

Firstly, AEC members will confront a free trade environment wherein competition will be ripe. Various goods can be and will be sold without any additional tax in different countries, effectively creating a single market entity for all ASEAN countries. Indeed, this feature will allow Thai firms to benefit from regional integration and market liberalization, allowing more products to be traded, which could generate increased revenues.

Secondly, labor migration will surge significantly thereby impacting industrial growth and development. People living in countries that provide a relatively low minimum wage will migrate to work in a place where conditions are reasonable and pay is higher. This could be both beneficial and detrimental.

Thirdly, the enlarged marketplace will aid investors, as they will have more options and will be able to select the smart choice to invest their money.

Fourthly, many countries outside of the AEC, like Australia, Japan, China, India, New Zealand, South Korea, have demonstrated enthusiasm for the project and its future expansion, potentially creating the largest consumer market in the world.

And finally, the AEC will drive the world economy by investing in infrastructure projects in developing countries such as Laos, Myanmar, Cambodia, and Vietnam. In the long term, a more level playing field in the ASEAN region will be achieved and prosperity more evenly spread out across Southeast Asia. But, in the short term, some ASEAN members will be better positioned to take advantage of the AEC and to utilize it as a platform to enhance their global competitiveness.

Nonetheless, the fact that both the goods and services markets will be larger means that there will be more prospects available for both Thai business entrepreneurs and workers. Thailand has a domestic market of approximately 65 million people, but after the AEC this market will effectively increase to about 600 million people. If ASEAN succeeds in reducing taxes and tariffs, this will have a considerable advantage to businesses seeking new consumers, as well as increasing economies of scale.
Regarding the issue of labor, it is worth noticing that legal migration of workers based on quotas and illegal migration continues and grows. With this in mind, the Ministry of Labor has prepared set criteria for the issuance of work permits to cope with the free flow of ASEAN professionals and skilled labor, once the AEC goes into full effect in December 2015. Indeed, Permanent Secretary for Labor Somkiat Chayasriwong said that, in the initial stage, work permits would be issued for ASEAN citizens in 25 professional fields, in line with the ASEAN Agreement on the Movement of Natural Persons (MNP). The professional fields involved with, for example, engineering, computer, research and development, advertising, marketing research, management, agricultural, telecommunication, educational, financial, health, translation, construction, and transport services.

Of equal significance, efforts have been made to provide greater opportunities for small and medium-sized enterprises (SMEs) in preparation for the AEC. The Department of Industrial Promotion has worked out major strategies to enhance the competitiveness of SMEs, which serve as the foundation of the country's economy.

According to the proposed plans, SME operators will be provided with more funding and information sources, as well as product testing services, to facilitate their operations. While the existing operators will be assisted further in their development, new SME operators will receive the requisite backing from the Department of Industrial Promotion. Innovations and information technology will be emphasized to increase the efficiency of production. In order to enable SME operators to compete effectively in the world market and to survive in the AEC, business matching between Thai SMEs and their foreign counterparts will be a priority.

Moreover, these SME groups will help generate more income and employment. With these projects, the Department of Industrial Promotion expects to develop at least 7,000 SME operators.

There are currently almost three million SME operators across Thailand in the production, trade, and service sectors.
 Likewise, a report from the Office of Small and Medium Enterprise Promotion, under the Ministry of Industry, stated that, during the first six months of 2013, Thai SMEs exported more than 905.7 billion baht worth of goods, mainly to China, Japan, the United States, Indonesia, and Hong Kong. 

Major exports include gems and jewelry, plastic products, rubber and rubber products, machinery, computers and components, and sugar. During the same period, Thai SMEs imported 1.2 trillion baht of goods, mainly from China, Japan, Switzerland, the United States, and the Republic of Korea. Major imports include machinery, computers and components, electrical appliances, iron and steel, and plastics.

Overall, the integration of ASEAN into a single market will be a true transformative endeavor for the region. More importantly, it will intensify and enhance noticeably the current linkages that ASEAN maintains with the global economy and open additional doors of opportunity to individual ASEAN members.

As the process of globalization pushes countries towards greater cooperation and policy coordination at the international level, so does regionalism play a similar role at a more localized level. With the ASEAN Economic Community on the horizon, the Government of Thailand, together with its partners in the private sector, has taken steps to prepare the country and its citizens for the changes that will follow regional economic integration and trade liberalization.