Our Extraterritorial "Free Trade" Zones

Taiwan News has a nifty editorial on the growing momentum towards the One Country, Two Systems approach in the KMT. The editorial also calls into question the new "free trade" zones, which are being used, as many of us feared, as extraterritorial trojan horses in many different ways. Because the zones are exempt from many sensible laws and regulations, and because they are more or less cabinet-level administrative districts with no independent oversight, their potential for harm is vast. The editorial comments:

The most recent and worrying example concerns draft bills submitted by KMT lawmakers to revise the "Statute on the Management of Free Port Zones" to "delink" the wages of foreign migrant labor from the monthly basic wage of NT$17,280 mandated under the Labor Standards Act and to introduce a similar clause is included in the draft "Special Statute for Taoyuan Airport."

Such self-interested call by short-sighted business leaders are hardly novel. For example, business associations pressed the Democratic Progressive Party-led government to delink foreign labor wages from the basic wage beginning in the Economic Development Advisory Conference held in August 2001.

Spurred by objections by labor groups, then Council for Labor Affairs chairwoman and current Kaohsiung City Mayor Chen Chu opposed business proposals to delink compensation for foreign workers from the then basic wage of NT$15,840 both for human rights considerations and because the DPP government aimed to promote high-value added manufacturing and compete with advanced economies.

Besides aiming to secure extra-exploitative profits for selected multinational and Taiwan firms, the legislation of such "one country, multiple system" labor regulations would undermine labor conditions for all workers and take Taiwan's industry and economic development in the opposite direction from which it needs.

Bad for rights and economy

Instead of upgrading toward higher innovation, productivity and quality, delinking foreign labor wages from the basic wage and thereby putting downward pressure on domestic wages will reinforce the backward obsession with "cost down" business strategies which have obstructed the upgrading of Taiwan's industry and economy and also impeded the expansion of our domestic consumer market.

The question of human rights is also a major concern since allowing compensation of foreign labor to fall below national standards as represented by the basic wage would violate convents of the International Labor Office and invite censure from the ILO and global labor and human rights activists for "superexploitation" and blatant violations of human rights.

Moreover, we can anticipate the establishment of "special zones" for "one country, multiple systems" labor rules will become a precedent for moves to try to attract "low-wage" operations of Taiwan firms back from China through schemes such as setting up special zones which "delink" labor conditions from the rest of Taiwan and even allow the importation of PRC labor into such zones.

In sum, such delinking would benefit only a handful of backward looking business enterprises and would inflict heavy costs on Taiwan society and all of our people.

To her credit, CLA chairwoman-designate Wang Ju-hsuan openly opposed the call for "delinking" and correctly noted that the linkage provides a "minimum guarantee" for the rights of Taiwan's over 300,000 foreign laborers and warned that abolishing the linkage would cause innumerable problems with management of foreign labor as victims of "de-linking" will naturally try to find better paid employment.

After initial discussion on these bills this week in the Legislature, some KMT lawmakers want to directly revise the LSL itself and make delinking general to all of Taiwan.

Such a action would inflict an even greater and direct blow against the human rights of foreign migrant workers, the working conditions of all wage and salaried employees in Taiwan and the long-term prospects for Taiwan's industrial upgrading, social order and economic prosperity and Taiwan's international reputation as a democratic society.

As the editorial points out, the obsessing with reducing cost by lowering wages is a technological dead end -- there are no gains to labor productivity, which is the real driver of rising living standards. In addition to the bass-ackwards economic policy, the political danger of the FTZs should be clear: the KMT is attempting to refashion the FTZs into funnels for pushing Chinese labor into Taiwan.

For more insight into the FTZs, see this discussion with urban planning prof Dr. Thomas Liou.

[Taiwan]