President Ma Ying-jeou (馬英九) and his administration have failed to learn anything from the unrest stirred up by the cross-strait service trade agreement.
Now the government wants to push through its draft special act on free economic pilot zones, regardless of the strong concerns that many people have about it.
The Democratic Progressive Party (DPP) has maintained a noncommittal attitude to the proposed pilot zones. All it has to say is that it only supports those clauses of the draft law that would be beneficial for Taiwan.
Has the DPP really analyzed the law’s potential advantages and disadvantages, or are these just empty words? Now that Tsai Ing-wen (蔡英文) has been re-elected as DPP chairperson, should she not offer a clear and open explanation of her party’s position?
The Ma administration says the draft law would pave the way for Taiwan’s entry to the Trans-Pacific Partnership and other free-trade agreements.
Free trade is the exchange of goods and services between two or more countries, or regional trade blocs, by the removal of tariffs, taxes on commodities, trade quotas and other barriers to trade, with the aim of greater economic integration.
A basic principle of free-trade agreements is the equal and mutually favorable treatment of the signatories.
Free-trade agreements are a way of handling trade between various countries, and have nothing to do with attracting business and investment within a country.
However, the Cabinet’s draft law on free economic pilot zones is similar to various laws that have been enacted with the aim of attracting business and investment.
These include the Statute for the Establishment and Administration of Export Processing Zones (加工出口區設置管理條例), the defunct Statute for the Encouragement of Investment (獎勵投資條例) and Statute for Upgrading Industry (促進產業升級條例), the Act for Establishment and Administration of Science Parks (科學工業園區設置管理條例) and the more recent Act for Industrial Innovation (產業創新條例).
As with these other laws, the draft special act governing the proposed free economic pilot zones only serves to relax laws and regulations and to reduce taxes or exempt businesses from paying them. Thus reducing operating costs for companies in the various zones and science parks. It does not incorporate any core industrial policies that suit the nation’s needs.
The content of the draft act has nothing to do with free trade.
It is a pernicious law that would only make a bad situation worse by further relaxing laws and regulations and establishing economic privileges, all in the name of establishing a so-called “free” economy.
An assessment of the proposed bill’s potential impact published by the National Development Council stated that the free economic pilot zones would greatly relax restrictions on the flow of goods, people and money.
First, the zones would relax the restrictions that various acts impose on land development and changes of land-use classification.
Second, they would remove various kinds of taxes, in the name of free trade.
Third, they would relax restrictions on Chinese and other foreigners residing in Taiwan for investment, business and work purposes.
The draft act would fully or partially exempt the zones from the restrictions embodied in the 46 existing acts.
Apart from stating the aim of deregulation and listing the acts that it says should be set aside, the report is no more than a eulogy to the supposed virtues of the zones.
It completely fails to present any objective and concrete appraisals of the possible impacts.
National Development Council Minister Kuan Chung-ming (管中閔) is supposed to be a world-class authority on econometrics — the application of statistical methods to the study of economic data and problems.
Surely he knows that an assessment of the proposed bill’s potential impacts on the overall economy is not enough. It is more important to assess how the draft act would affect various business and industrial sectors.
The impact should also be examined on businesses working in the same sector but competing on an unequal footing inside and outside the zones.
He should know that the impacts on society and culture, natural resources, national security and other aspects also need to be assessed.
When seen alongside the cross-strait service trade agreement and the forthcoming cross-strait agreement on trade in goods, it is clear that the draft act’s purpose is to implant Chinese businesses into Taiwan and allow them to put down roots, and to pave the way for Taiwanese investors “returning” from China, and who have connections to Chinese officialdom, to secure land for their own purposes.
For all these reasons, free economic pilot zones established according to the terms of the draft act would be just another form of concession designed to accommodate privileged economic interests.
The draft act would enable these interests to operate free of many legal constraints.
The name proposed for the zones cannot hide the fact that they would only make a bad situation even worse.
If the legislature passes the draft act as it stands, it will be a step backwards — further hollowing out Taiwan’s finances and economy.
It would lead to more land expropriations and forced removals, as well as further widen the gap between the rich and the poor.
These concerns may explain why veteran democracy campaigner Lin I-hsiung (林義雄), when announcing the end of his recent hunger strike against continued construction of the Fourth Nuclear Power Plant in New Taipei City’s Gongliao District (貢寮), unexpectedly also addressed the need to stop the legislature from passing the draft law on free economic pilot zones.
Chan Shun-kuei is a lawyer and chairman of the Environmental Jurists Association.
Translated by Julian Clegg
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