AEC Advantage and Disadvangtage

The optimistic influence of AEC to Thailand is that it helps to facilitate funding and buying and selling activities in other ASEAN members as it is now more freely and easier. We can spend cash on any ASEAN countries and there will be much less limitations when it comes to trading activities. Moreover, Thailand will become the center of transportation and tourism, as Thailand is located within the center of ASEAN. This will help tourism trade grow larger. Thailand can additionally be the middle of nationwide conferences, conferences, exhibitions, and telecommunication.

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Furthermore, AEC helps Thai manufacturers scale back the value of manufacturing as they’ll outsource cheaper uncooked supplies from ASEAN members. AEC additionally helps enhance the alternatives of investment as money is definitely flowing among ASEAN

AEC comes with the railways development tasks which can connect the Greater Mekong Sub-region, ie. East-West Economic Corridor-connecting Vietnam, Laos, Thailand, Myanmar; North-South Economic Corridor-connectingThailand, Myanmar/Laos, and China and; Southern Economic Corridor-connecting Thailand, Cambodia, and Vietnam. The Southern Economic Corridor has a connecting route further to Dawei Deep Sea Port in Myanmar that may distribute products to the Middle East and Europe.

This will deliver down the logistic cost of Thailand that depend smuch on expensive street transportation.

In about 2 years, we are going to be part of AEC which we want to put together for this example. It isn’t just only trade sector that need to arrange for the larger market and the larger amount of competitors, but the small sector like logistic is also need to be improved to get together with the extreme competitors for serving to corporations survive from the simpler movement of products, service, funding, capital and different people.

When there is a free move of goods, service, skilled labor, and so forth, the infrastructure also must be developed to serve those inflows.

AEC could be an excellent problem for supply chain administration to manage the timing for delivering items with more comfortable infrastructure which is prepared to reduce the price of transportation as properly, and it is a nice alternative to enhance the cross border trade facilitation by simplified border procedures. Moreover, supporting the transportation amongst ASEAN countries PTT also began to arrange gas stations at main roads in plenty of member international locations already. This opportunity tends to generate lots of income for our nation because the high normal of PTT gasoline station and the properly quality of service.

Negative influence of AEC on supply chain

When we turn into a half of AEC, it has a a quantity of unfavorable impacts on the provision chain in Thailand. Thai corporations have to expand each their manufacture and stock, in an order to produce and store extra items to serve wider vary of consumers. As a outcome, it’s going to positively affect their mounted value, and complete cost of production will then rise respectively. Besides, the intensive concentration on manufacturing and stock can be problematic in that it locations further stress on the surroundings, which could be a clear proof in unwelcome impacts upon essential sectors of the financial system, similar to tourism.

AEC will cause in a lot of labour movement and this is often a unfavorable influence on supply chain as well. Of course, skilled labour will move to the nation that offer them the next alternative and higher wage, corresponding to Singapore and Malaysia. As the Thai expert labour transfer out, the international unskilled labour may move in. The unskilled labour, who could additionally be extra wage aggressive than the Thai worker, move in. This triggered an disadvantage in the market and on Thai labour as well. Also, this might depress native markets and diminish consumption of manufactured objects.

Due to a numerous wider customers, it will be harder for the manufacture to reach economy of scale. Instead of just producing one goods to server domestic market, the corporations might must provide you with a quantity of artistic goods to server prospects who come from many country. This can also enhance a value of production for the firm.

Thailand has comparatively high logistic value to GDP (18%) when compared with Singapore (8%) and Malaysia (13%). For Thailand’s general logistic price, the share of transportation cost is the most important. Thailand could lose its technique to be the hub of ASEAN from the higher logistic cost evaluating to other AEC international locations, similar to Singapore and Malaysia, if Thailand’s logistic infrastructures, for example, railways and highways community that hyperlink AEC, haven’t been constructed completely in 2015.

Some labor intensive industries may die when AEC is fully integrated due to Thai minimal wage policy. The minimal wage coverage will have an effect on everyone within the supply chain both instantly and indirectly. These businesses, such as meals and beverage and autos and car elements, will see larger costs for goods and providers on the form of rising price of raw supplies and logistics pushing through the provision chain. Moreover, the strong companies, which may survive, may leave Thai markets to find new channels to increase earnings and counter profit erosion from rising domestic prices. If many industries depart Thailand, the remainder industries will go away additionally like domino falls.