Former Council of Labor Affairs (CLA) minister Jennifer Wang (王如玄) resigned at the end of last month over her disagreement with other Cabinet ministers about adjusting the minimum wage. On her way out, she cast doubt on another aspect of the government’s labor policy, saying that free-trade agreements (FTA) around the world all include sections devoted to labor affairs, and that making domestic and foreign workers subject to different regulations on wages and working conditions might make it impossible for Taiwan to sign FTAs with other countries.
Is Wang right about this? Would decoupling native and foreign workers’ wage conditions create a major obstacle to Taiwan’s efforts to sign FTAs? Does it mean that extra caution should be applied in planning Taiwan’s proposed free economic demonstration zones?
There is indeed a trend in advanced Western countries to include sections devoted to labor, or labor rights, in the FTAs they sign. This trend can be traced back to the North American Free Trade Agreement (NAFTA). To dispel domestic opposition to NAFTA and allow the agreement to pass smoothly through Congress, the US government added two side agreements to be negotiated and signed as part of NAFTA — the North American Agreement on Labor Cooperation and a similar one on environmental cooperation. Since then, any FTA signed between the US and other countries is sure to include sections of this sort. Canada and the EU also include such sections in their FTAs.
Among developing nations, only Chile gives a lot of weight to this kind of content in its FTAs. This might have something to do with Chile’s experience under the rule of former Chilean dictator Augusto Pinochet. However, hardly any FTAs signed between Asian nations include sections like these, the only exception being the one between Japan and the Philippines. The FTAs that South Korea and Singapore have signed with the US include sections on labor, because the US demands it.
Unfortunately, the Trans-Pacific Partnership (TPP), which Taiwan wants to join in 2020, clearly reiterates in the attached Memorandum of Understanding on Labor Cooperation that TPP partner countries must abide by the International Labor Organization’s 1998 Declaration on Fundamental Principles and Rights at Work, which means that they cannot allow discrimination in employment. Furthermore, if Taiwan wants to sign an FTA with the US before it joins the TPP, then it will have to confront this question even sooner.
If Taiwan is serious about these partnerships and agreements, it cannot avoid dealing with this issue. Although up until now, there has been no effective follow-up on the labor clauses of FTAs, or penalties applied for failing to comply, there is still a risk of that happening. Notably, if one of the signatory countries of an FTA allows foreign migrant workers to be employed at a relatively low rate of pay, and this gives it a trade advantage in exporting goods to advanced countries, those countries can be expected to pay careful attention to the issue, and that will definitely heighten the risk of action being taken.
If a policy of decoupling the wages paid to foreign workers from those paid to native workers is to have the desired effect of increasing job opportunities for Taiwanese workers, it will have to be a nationwide policy, not one limited to certain special zones. Furthermore, if special zones were to promote differential wages for foreign migrant workers as an attraction, it is very likely that most of the investors it would attract would be labor-intensive manufacturers, and that is not in keeping with the original purpose for which special zones were set up.
One way to get out of this quandary would be to take transitional measures that could simultaneously achieve two goals — that of attracting Taiwanese businesspeople who have invested abroad to move their investment money back to Taiwan, and that of providing more job opportunities.
During the next eight years, businesses and households all over Taiwan should be allowed to employ foreign workers and domestic helpers and caregivers at different wages than those paid to Taiwanese workers. However, after four years businesses would have to readjust. This would result in the wages of about half of all foreign migrant workers in Taiwan being recoupled with those paid to Taiwanese workers. After a further four years, all foreign employees, including those employed by both businesses and households, would have to be paid according to the same standards that apply to native workers.
The main purpose of this proposal is to allow Taiwanese businesspeople who bring their investment money back to Taiwan to adjust and upgrade their business operations, while other existing businesses would also enjoy the same treatment, but to also help Taiwan avoid unnecessary risks when it joins the TPP in eight years.
During this adjustment period, Taiwan would not have problems signing FTAs with other Asian countries because they are not in the habit of including labor-related sections in their FTAs. Taiwan would probably not have problems signing FTAs with New Zealand and Australia either, because the FTAs that New Zealand signed with Hong Kong last year and those that Australia has signed with Asian countries do not include sections on labor issues.
The government should quickly make up its mind about whether to decouple foreign migrant workers’ wage standards from those that apply to native workers. However, this decision does not have to be a simple question of yes or no — there ought to be a third way available.
Tu Jenn-hwa is director of the Commerce Development Research Institute’s business development and policy research department.
Translated by Julian Clegg
George Santayana wrote: “Those who cannot remember the past are condemned to repeat it.” This article will help readers avoid repeating mistakes by examining four examples from the civil war between the Chinese Communist Party (CCP) forces and the Republic of China (ROC) forces that involved two city sieges and two island invasions. The city sieges compared are Changchun (May to October 1948) and Beiping (November 1948 to January 1949, renamed Beijing after its capture), and attempts to invade Kinmen (October 1949) and Hainan (April 1950). Comparing and contrasting these examples, we can learn how Taiwan may prevent a war with
Taiwan is rapidly accelerating toward becoming a “super-aged society” — moving at one of the fastest rates globally — with the proportion of elderly people in the population sharply rising. While the demographic shift of “fewer births than deaths” is no longer an anomaly, the nation’s legal framework and social customs appear stuck in the last century. Without adjustments, incidents like last month’s viral kicking incident on the Taipei MRT involving a 73-year-old woman would continue to proliferate, sowing seeds of generational distrust and conflict. The Senior Citizens Welfare Act (老人福利法), originally enacted in 1980 and revised multiple times, positions older
The Chinese Nationalist Party (KMT) has its chairperson election tomorrow. Although the party has long positioned itself as “China friendly,” the election is overshadowed by “an overwhelming wave of Chinese intervention.” The six candidates vying for the chair are former Taipei mayor Hau Lung-bin (郝龍斌), former lawmaker Cheng Li-wen (鄭麗文), Legislator Luo Chih-chiang (羅智強), Sun Yat-sen School president Chang Ya-chung (張亞中), former National Assembly representative Tsai Chih-hong (蔡志弘) and former Changhua County comissioner Zhuo Bo-yuan (卓伯源). While Cheng and Hau are front-runners in different surveys, Hau has complained of an online defamation campaign against him coming from accounts with foreign IP addresses,
Taiwan’s business-friendly environment and science parks designed to foster technology industries are the key elements of the nation’s winning chip formula, inspiring the US and other countries to try to replicate it. Representatives from US business groups — such as the Greater Phoenix Economic Council, and the Arizona-Taiwan Trade and Investment Office — in July visited the Hsinchu Science Park (新竹科學園區), home to Taiwan Semiconductor Manufacturing Co’s (TSMC) headquarters and its first fab. They showed great interest in creating similar science parks, with aims to build an extensive semiconductor chain suitable for the US, with chip designing, packaging and manufacturing. The
RSS