Abstract

Over the past few decades, tariff liberalization has emerged as a key component of trade policy reforms aimed at enhancing global integration, increasing market efficiency, and stimulating economic growth, particularly in emerging markets. In Southeast Asia, the pursuit of open trade regimes through multilateral, regional, and bilateral trade agreements has significantly altered the trade environment, especially for Small and Medium Enterprises (SMEs). While larger firms often have the capacity, resources, and strategic frameworks to take full advantage of trade liberalization, the effects on SMEs—often considered the backbone of Southeast Asian economies—are more nuanced, varied, and under-explored. This study investigates the impact of tariff liberalization on the export performance of SMEs across selected Southeast Asian countries, including Indonesia, Malaysia, Thailand, Vietnam, and the Philippines.
Using a mixed-methods approach, this research combines macroeconomic trade data analysis with firm-level survey data to assess how reductions in import and export tariffs have influenced SME export volumes, market diversification, competitiveness, and sustainability. The quantitative aspect of the study utilizes panel data regression techniques over a 15-year period (2010–2025), capturing trade flows, tariff rates, and SME export data from national statistics and international databases such as the World Bank, WTO, and UN Comtrade. The qualitative component involves in-depth interviews with SME owners, trade officials, and industry experts to gain insights into the on-the-ground realities faced by exporters.
Findings reveal that tariff liberalization has had both enabling and constraining effects on SME export performance. On one hand, the reduction of tariffs has led to lower input costs, improved access to raw materials, and increased price competitiveness in international markets. These factors have facilitated greater integration of SMEs into global value chains, particularly in industries such as textiles, food processing, and light manufacturing. Moreover, trade liberalization has encouraged innovation and adoption of international standards, driven in part by competitive pressure and opportunities in foreign markets.