Taipei, Jan. 16 (CNA) Labor rights activists and observers agree that the signing of a trade agreement between Taiwan and China will only speed up Taiwan's capital outflow, but their opinions differ on the solution for salvaging Taiwan's unemployment.
A proposed cross-Taiwan Strait Economic Cooperation Framework Agreement (ECFA) "would only speed up outflow of domestic capital and the exodus of local businesses and it will not solve the unemployment problem, " said William Kao, Victims of Investment in China Association (VICA) President William Kao said Saturday.
The core problem of Taiwan's shriveled economy is not the signing of an ECFA but the fact that Taiwanese businesses have lost their competitive edge on the global stage, Kao argued, saying that Taiwanese businessmen have no choice but to move their businesses to China or other countries.
Moreover, Kao said, China is not trustworthy and many Taiwanese businessmen have been stripped of their property and assets in China by the Chinese government by "every method you could imagine." Kao himself is one of them. A group of unidentified men looted his factory in China in 1999. After calling for help from the Chinese government to no avail for two years, he had to leave China in 2001.
According to the government, the signing of an ECFA will create 260,000 jobs, although the opposition predicts there could be as many as 890,000 jobs lost after an ECFA is signed, he said.
"The real answer is probably something in between, " he went on.
With 600,000 people out of work, Kao said, unemployment is the most serious issue in Taiwan. Unless the government delinks the minimum wage of foreign workers and domestic workers, he said, there will be no solution to cut the jobless rate.
"A wrong foreign labor policy in 1992 is the root cause of all these problems, " he said.
Once the minimum wage of foreign workers is lowered and local businesses are allowed to hire as many as 60 percent foreign workers in their workforce, Taiwanese companies will be willing to move back to Taiwan, given China's inconsistent policy, investment environment and worsening social order, Kao said.
"That will create more jobs for local workers, " he said.
"I agree that the ECFA will not solve the unemployment problem, but I find it hard to agree with Kao's theory, " Taiwan Labor Front Secretary-General Sun Yu-lien said.
The ECFA is basically a free trade agreement that will only benefit specific sectors or companies, while most small- and medium- sized businesses will suffer, he said.
"The only thing left in Taiwan will be the lower-level service sector operating solely for domestic demand, just like what happened in Hong Kong after it signed its Closer Economic Partnership Arrangement (CEPA) with China, " he said.
Sun said Kao's theory has been brought up by some legislators before, but was not implemented in the previous administration or the current government.
"It's obviously not in line with mainstream opinion, " he said.
Sun expressed opposition to the theory because it does not respect labor rights, a universal value, and is against Taiwan's foreign labor policy that regards foreign labor hiring as "supplementary." "If we agree with the principle of `equal pay for equal work'... if we agree that men and women should receive the same pay for equal work, then why should foreign workers be different?" he asked.
If the minimum wages of foreign and domestic workers are delinked, Sun said it will lead to lower overall payment levels eventually because employers would rather hire cheaper foreigners than local workers.