Taipei Times: What's the main purpose of your visit to Taipei? Has your trip been triggered by the recent allegations that the Taiwanese-invested Chentex textile factory (正太紡織廠) in Nicaragua has trampled the rights of workers?
Norman J. Caldera Cardenal: The main purpose of the visit is to strengthen the ties in trade and investment that Nicaragua has had with the Republic of China on Taiwan.
PHOTO: CHEN CHENG-CHANG, TAIPEI TIMES
As you know, the balance of trade between the two countries is very heavily in favor of Taiwan. So we have been trying to look for ways to even out the situation, and we want to look at the possibilities of exporting products such as beef to Taiwan. And we also want to find ways to cooperate on Taiwanese investment or joint ventures to make use of facilities afforded by the new CBI, which is the enhanced Caribbean Base Initiative of the US.
PHOTO: CHEN CHENG-CHANG, TAIPEI TIMES
[The US' Caribbean Basin Initiative gives trade incentives and increased economic aid to eligible countries in the Caribbean basin and central America. New initiatives in 1999, for example, removed tariffs and quotas from apparel entering the US that was manufactured in eligible CBI countries from US yarns and fabric. Eligibility is also linked to items such as a country's progress on worker rights.]
The distinct feature of the CBI is that there are a lot of products there that were not reckoned in the previous initiative. However, those products require a much higher value-added content. That means unless we incorporate some raw materials from Nicaragua, the use of these facilities would be difficult. We've also had discussions with some industry leaders in leather as well as watch-making areas [in Taiwan] on the possibility of accessing the US market to a degree by going to Nicaragua and having their products value-added there.
Of course when you talk about Nicaragua-Taiwan relations, it's inevitable to link the labor situation with the free trade zones in Nicaragua. Because what happens is that any country that starts to increase exports of garments to the US as far as Nicaragua has been doing, becomes a target for the US labor federation. If they do not find anything wrong, they invent it. But they will come up with a complaint about any country that grows fast. It's like an automatic trigger mechanism. Any time that a country is increasing its exports to the US, it becomes a target or an objective for them. So the objective conditions of that country are secondary. What we have to make sure of is that we do not give them any reason to come up with something. And this is what we have been working [on] with our partners in the manufacturing sector, to make sure that they have no excuses.
TT: Last October, former US trade representative Charlene Barshefsky wrote to the Nicaraguan government demanding that conditions be improved at Chentex and Mil Colores, a US-owned factory. She also set a deadline of this June for a US-Nicaragua discussion on worker rights. What's the latest development as of now?
Caldera: As you know, Barshefsky has been replaced. We have had a few preliminary contacts with the current trade representative Robert Zoellick. We have had contacts with Barshefsky's deputy, who is no longer there, either. We have a series of requirements to fulfill and labor certification is one of them. But it's one of the many issues that we have to discuss with the US. So far we have been complying with every one of the requirements that they have put [forward]. So far we have had no complaints from the US trade negotiators on our compliance.
In fact we had a visit from the US army, which was purchasing garments, after the US labor federation came to see them. And the US army reported that there was no problem [in the factory in question]. But what came out in the press afterwards was not that the US army went down and reported that there was no problem, but instead it was a complaint by the labor federation that the US army had not come up with anything negative.
TT: Local union workers in Taiwan, as well as US activists, have alleged that the factory in question, which was owned by the Taipei-based Nien Hsing Textile Co Ltd (年興紡織股份有限公司), violated labor rights, therefore triggering a lot of disputes. What's the latest development?
Caldera: I have upstairs in my email the latest development which is that the factory workers protesting in front of the US office against the labor federation ... they are making about more than twice the minimum wage of Nicaraguan workers, and that all the US labor federation is doing is taking away their jobs and leaving their families without food. So they wanted the federation to stop doing that.
TT: How about the factory owner? Has the owner so far offered any solution to the dispute triggered by dissonance over wages that involved the dismissal of workers in the factory?
Caldera: They have been talking. In Nicaragua the way this works is to form a tripartite commission with the factory owner, and the government, as well as the labor involved. They have been meeting regularly. They have come to an agreement and they are implementing this agreement.
TT: What's the essence of this agreement?
Caldera: Basically, they are going to take back some of the labor organizers that were fired. And they are going to re-analyze some of the [cases of those] workers who had been fired, which was 120 [workers]. And they have been in the process of re-hiring people. But as far as we know, the only disagreement here is from the US labor federation, which is an outsider and which is not a party in the dispute.
TT: But as far as I know, even the founder of the Body Shop, Anita Roddick, has filed complaints about the case as well. What's your comment on her complaint?
Caldera: Armand Hammer was an American billionaire who had deals with Stalin in the past. You have the wife of the CNN tycoon Jane Fonda who is a leftist. At least she is a leftist from her mouth outward, because she travels first class and she wears YSL, but she proposes to be a person who is concerned about the third world.
So we have all kinds of people like that.
The Nicaraguan manufacturers' association has staged a mass protest against her [Roddick]. She never went to the factory. She never visited it. And as far as we are concerned, [while she has done] a little good ... in very highly-publicized payments of fair prizes to certain producers, she has done more damage by lashing out at people who have provided jobs for the Nicaraguans. So the fact that she is a millionaire doesn't give her any more rights.
TT: While the inflow of foreign direct investment into developing countries like Nicaragua can create job opportunities, any ill practices by these foreign investors, such as violations of labor rights, can put a great strain on relations between the countries in question. Has your country found any mechanism to find a balance between luring foreign investment while at the same time reducing the likelihood of violation of labor rights by foreign investors?
Caldera: We do. But whatever we do we do directly with investors to make sure that they comply with the regulations. We have had cases where there were infractions and these infractions have been corrected. The press played [an] important role in pointing out infractions, and we followed up and made sure that they were corrected. But the problem is, when the correction is not reported, this relationship with the investor is like holding a dove in your hand. If you tighten it too much, it dies. If you slacken it too much, it flies away. So if you want to keep it, you have to find an equilibrium.
TT: You had worked for the WTO and GATT for over a decade. As Taiwan is about to enter the WTO, what's your advice for Taiwan when the island is admitted to this multilateral trading system?
Caldera: Taiwan would have to be very careful in the area of analyzing competitiveness of products. Unfortunately the WTO .... is much more liberal [regarding] agricultural products than it is [regarding] industrial products. So for a country, the situation is unbalanced in that in industrial products we have a lot of checks-and-balance on things we cannot do as far as subsidies are concerned. But in agriculture, countries like France and even Germany -- now with the eastern Germany exceptions -- are impeding progress in liberalization.
Maybe Taiwan needs to consider the possibility of joining countries like Australia, New Zealand, India and other countries in the Cairns Group so that we have an even [playing] field because there are agricultural products here.
[The Cairns Group was formed in 1986 with the goal of bringing about reforms in world trade rules to make agriculture subject to market forces. It is a coalition of 18 agricultural exporting countries which account for one-third of the world's agricultural exports.]
These countries under the Cairns Group have a position [that is] not the same as the old industrialized countries. These are newly industrialized countries, so they have fresher views to offer on something like agriculture.
I had the opportunity of sharing the trade negotiation tabled on services in the FTAA [Free Trade Area of the Americas] negotiating process. And through this service negotiating group, I also got involved in electronic commerce negotiation.
I think this is an area that Taiwan should lead. Possibly try to attain the presidency of the electronic trade negotiating table in the next round of negotiation because there are a lot of people here [in Taiwan] with tremendous knowledge-based manufacturing capacity.
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