Mon, Aug 23, 2004 - Page 11 News List

Air cargo free-trade zone: too little too late?

The government is making good on its talk of making Taiwan a global logistics hub but can its flagship project overcome land shortages and the lack of links with China


The construction site next to CKS International Airport in Taoyuan where the Far Glory Free Trade Zone Air Cargo Park will be completed within five years.


After talking about making Taiwan a global logistics hub for years the government has finally taken some real steps to bring this about.

Following the passage of the Statute Governing the Establishment and Management of Free Trade Ports (自由貿易港區設置及管理條例) last July, the government is expecting to attract more local and foreign investment -- or prevent them from bolting to China -- with the mechanism.

While Keelung Harbor and Kaohsiung Port have gained free-trade-port status and will start operation in September and next January respectively, the largest hope is pinned on the Taoyuan air-cargo zone -- named the Far Glory Free Trade Zone Air Cargo Park (遠翔FTZ航空貨物園區) -- now a construction site next to Chiang Kai-shek International Airport, and scheduled to be completed within five years.

Like other free-trade ports, the 45-hectare air cargo park is within the nation's territory but outside the jurisdiction of Taiwan's customs authorities, which allows foreign imports, including those from China, to be stored or processed before being reshipped to a third country or area without going through the red tape of customs inspection. Businesses based there will be free from tariffs, commodity taxes, tobacco and alcohol tax and port service fees.

The air cargo park, a NT$21.3 billion build-operate-transfer (BOT) joint venture between the Far Glory Group (遠雄集團) and Civil Aeronautics Administration, is capable of processing 1 million tonnes of goods every year, creating an annual output of NT$800 billion, and offering 25,000 job opportunities. Companies in the park can hire foreign laborers up to a proportion of 40 percent of all staff.

"We are very confident that the air cargo park will bring huge advantages for the nation's industry and turn the nation into a logistics hub in the world," said Billy Chang (張國政), director general of the administration.

With the first phase of the park, including two buildings within the value-added zone and cargo zone to be completed by November next year, the major task for Far Glory is to secure as many companies as it can to set up operation centers in the park, said Arnold Liu (劉文龍), division chief of the air cargo park's administration department.

Targeting the nation's strong high-tech manufacturing industry, Liu said the park is well designed for companies that manufacture high-value products with short life cycles. So far, computermakers Asustek Computer Inc (華碩電腦), Quanta Computer Inc (廣達電腦) and Hewlett-Packard Co have shown high interest in taking space in the park, Liu said.

Through a 600m special flyover, cargoes can be transported directly from CKS Airport to the park without passing through customs inspection. After processing, they can be shipped out via the same route.

"We can guarantee companies that all or 98 percent of their orders will be delivered within two days," Liu said. "In this era, time is money, and is the key to a company's competitiveness."

A Poor Precedent

Promising as this sounds, however, industry representatives generally consider the measure a belated effort.

Jeroen Rozendal, co-chair of the European Chamber of Commerce Taipei's logistics committee, said that the free-trade-port mechanism was good, but progress has been too slow. He also said that a far more important topic was the liberalization of direct transportation with China, given the close business ties between the two sides of the Taiwan Strait.

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