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EDITORIAL: Don’t rush the special economic zone

Taoyuan County Commissioner Chu Li-lun (朱立倫) has engaged in repeated lobbying efforts at the legislature to speed the passage of the Taiwan Taoyuan International Airport special statute, otherwise known as the Taoyuan Airport City bill.

This statute would have an impact on the development of the area surrounding the airport and would be mired in complicated issues relating to capital investment and land development interests. Furthermore, it would conflict with a dozen different laws, including the Civil Aviation, Charges and Fees, Urban Planning, Foreign Trade, Labor Standards, Immigration, Budget, Audit, and Land Expropriation acts and the Statute Governing the Relations between the People of the Taiwan Area and the Mainland Area, as well as the Act for the Establishment and Management of Free Ports. With obvious positive and negative effects and all the controversy surrounding the issue, there is no rush to pass the bill in its present form.

The worldwide trend toward efficiency, privatization and globalization in airport management has turned airports into cities that integrate human traffic, information technology, shopping, commerce, logistics and entertainment. This has encouraged corporations and suppliers to set up offices and stimulate the development of areas around the airport.

However, once a Taoyuan airport special economic zone takes shape, goods from China and other countries will enter and then be exported after undergoing low-cost processing. Importing countries could resort to bringing anti-dumping charges against Taiwanese products. Moreover, the salary and benefits of foreign laborers employed by enterprises operating in the zone would not be subject to the Labor Standards Act or minimum wage laws. This would lead to exploitation of foreign workers and their low wages would also result in higher domestic unemployment.

The zone as presented in the proposal would allow Chinese tourists or business travelers to apply for a visa upon arrival. This is an example of an overly hasty policy. No other country allows Chinese travelers the privilege of landing visas. While the relationship between Taiwan and China is not entirely hostile, it is still far from the level of friendliness required to lift border restrictions. Leaving the door wide open to China would show utter disregard for national security.

The administrative corporation bill has yet to be passed and is pending further discussion. The special zone, however, has an area of 6,000 hectares and only needs a board of directors to determine the development, transfer, leasing and taxation of the region. Furthermore, the zone could set its own discounted tax rates, giving the board too much power. The draft also focuses on the development of surrounding areas.

With such temptations, the zone could attract intervention from various vested interests that would then demand that land usage restrictions be relaxed. This would be detrimental to the management of the surrounding area and to flight safety.

The Taoyuan International Airport generates more than 70 percent of civil aviation funds. Aside from covering the expenditures of the airport itself, these funds subsidize the deficits of the nation’s other airports. Taoyuan International Airport can generate NT$8.1 billion (US$267.5 million) in revenue. Once the special zone is established, only an estimated NT$1.8 billion would be left for public coffers and other airports would struggle to stay afloat.

If Taoyuan International Airport became a special zone, would Kaohsiung and Taichung international airports follow suit? Would the same standards apply? Many problems surround the proposal.

The legislature therefore should not rush to a decision. The issue would benefit from a detailed discussion involving all parties once the new Cabinet assumes office.
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