The Cabinet has submitted its draft law on free economic pilot zones to the Legislative Yuan for deliberation. Although government departments have amended some clauses of the bill in view of doubts expressed by observers and critics, many disputes about the law have yet to be resolved. It is important to seek a consensus rather than letting this bill get passed too easily. From a specialist point of view, questions could be raised about the following seven areas of doubt.
First, let us consider the purpose of proposing such a law.
Government departments’ motive for promoting the planned free economic pilot zones is to relax restrictions on the flow of goods, people, money, information and knowledge, so as to bring about a business-friendly environment, create multiple economic benefits and demonstrate the nation’s determination to liberalize its economy.
Unfortunately, even if these aims are achieved, they cannot mitigate the problems that the nation’s farming sector faces and that urgently need to be solved, nor will they help upgrade local agriculture.
Farming is connected with sensitive issues of food security and people’s livelihood, so it calls for cautious steps forward, rather than forcing through measures intended to promote “added value” in agriculture.
The second question is where agricultural raw materials will come from.
The free economic pilot zones are supposed to emphasize the use of imported raw materials. Although local farm, fishing and animal husbandry products are to be permitted, contract or satellite farm models would be needed.
These are not enforceable and the draft law does not mandate any standard ratios between imported and domestic inputs.
Consequently, businesses would still be able to use mostly imported raw materials, based on cost, profit and stability of supply. When imports enjoy a price advantage, they will push down purchase amounts and prices for local farm products, hurting local farmers.
The third question has to do with the use of products made in Taiwan.
The key reason local farm products gain favor with overseas consumers is that they use quality local raw materials, combined with the use of modern transport and excellent processing technology.
Goods made using imported agricultural raw materials are generally of poorer quality than those derived from local sources. If goods made with imported materials are also labeled “Made in Taiwan” — even if the business cake gets bigger, it will lose its flavor.
Such a step would inevitably damage the reputation of genuine Taiwanese-made goods. For this reason, there have been repeated demands for the country of origin of ingredients to appear on product labels so that buyers can tell the difference, but the government has so far not included this measure in its amendments to the draft law.
The fourth issue is about how capable the authorities would be of ensuring product quality.
The main sources of imported agricultural raw materials are China and Southeast Asia — areas in which adulterated raw materials and foods are rampant. There is good reason to worry about those countries’ ability to ensure the safety and hygiene of farm produce.
Furthermore, producers in those countries use all kinds of medicine and additives with which Taiwan’s authorities are not familiar, making it very hard to test and guard against them.
Right now, the nation lacks sufficient personnel and equipment to monitor the quality of such a huge quantity of agricultural raw materials to be imported from a wide variety of sources.
Under such circumstances, instead of gaining added value, Taiwanese produce would have its value taken away.
The fifth point is one of conflicting policies.
On the one hand, the government claims that the superior features of Taiwan’s agricultural production and the fine quality of its processing and other technologies could attract overseas businesses to invest in agriculture in the free economic pilot zones.
On the other hand, it is rather carefree about allowing Taiwan’s key technologies, such as breeding, production management and processing techniques, to flow abroad.
Even if this is given the impressive label of “internationalization,” it just creates international competition for Taiwanese agriculture.
The outflow of techniques such as the raising of eels and monosex tilapia, as well as fish fillet processing, are recent experiences that should serve as a warning.
The sixth point of doubt concerns the importation of pathogenic germs.
The government plans to allow the importation of hitherto restricted ornamental fish for breeding and raising in the pilot zones, which could lead to the introduction of pathogens such as Heliothis armigera iridescent virus, koi herpes virus and viral hemorrhagic septicemia, as well as genetically modified organisms and hybridized varieties.
The smallest mistake could very easily lead to environmental pollution and damage to local ecologies. Important local fish species could be infected by imported pathogens. There would be a high risk of the industry being ruined.
That is why the Japanese government stipulates that anyone applying to use genetically modified organisms must produce a biodiversity assessment and submit plans for emergency measures and monitoring.
Taiwan has no department responsible for inspecting and testing genetically modified seafood organisms or assessing associated risks. In view of this situation, the sector should not be recklessly deregulated, inviting a major disaster.
The seventh and final point concerns global connections.
The purpose of establishing free economic pilot zones is to attract capital, talent and technology from around the world, making it easier for Taiwan to link up with international markets, while also expressing the nation’s willingness to open up its markets and liberalize its economy.
In view of this, the focus should not be placed on China’s free economic zones and setting up zone-to-zone links. That would make Taiwan’s economy even more dependent on China than it already is, while preventing the nation from diversifying its risk by reaching out to worldwide markets.
The government should clarify how it intends to deal with these questions.
If the ruling party uses verbal intimidation and its majority of seats in the legislature, or even underhanded methods, to force passage of the pilot zone law, social conflicts are likely to continue unabated and there may even be a new tide of public street protests, an outcome most Taiwanese probably do not want.
Du Yu is chief executive officer of the Chen-Li Task Force for Agricultural Reform.
Translated by Julian Clegg
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