Mon, Oct 08, 2012 - Page 8 News List

Wage policies may hamper FTAs

By Tu Jenn-hwa 杜震華

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

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