In the future, as more and more companies enter these free ports, their impact will ripple outward into the economy as a whole. As the pie of the whole economy grows, everyone will get a larger slice.

One example of a company that stands to gain is the Far Glory Air Cargo Terminal Company, which holds "preferred bidding" rights with the Civil Aeronautics Administration. With a 50-year contract at the Taoyuan Air Cargo Park, it believes that it will make as much as NT$97.5 billion if the cargo park attains free port status.

Ho Mei-yueh, vice chairperson of the Council for Economic Planning and Development, notes that the plan for an air cargo park at Chiang Kai-shek International Airport in Taoyuan in which Far Glory is participating is being carried out by the Civil Aeronautics Administration as part of the government campaign to make Taiwan an Asia Pacific-Regional Operations Center and a Global Logistics Center; it will be the CAA's largest BOT (build-operate-transfer) project carried out with the private sector for many years. The government is putting top priority on turning the air cargo park into a free port, which will enable it to function as a tax-free haven, with exemptions from or reduction of business and commodity taxes as well as customs duties and customs clearance fees.

There are also plans for stirring up economic vitality at the Port of Taipei. The CEPD has amended its "Plan for Future Development at the Port of Taipei," increasing the number of wharves at its First Container Center from six to seven and the size of the container ships that they can handle from 5000 to 8000 TEUs (twenty-foot equivalent units). To meet demand, there will also be a two-stage development of wharves in its southern district. Ho Mei-yueh explains that the First Container Center will become the Taipei area's most complete and modern base for ocean transport. It will be of tremendous assistance in reducing costs for northern manufacturers, which are often forced to ship through Kaohsiung. Furthermore, by serving bigger vessels, the center will be in step with the trend toward larger container ships, and it will help to increase Taiwan's competitiveness in international trade.

Currently, Evergreen and other shipping companies have obtained the rights to make bids on the BOT part of the Port of Taipei First Container Center, which will be finished in 2006. If the Port of Taipei wants to become a free port, it must first apply to become an international port. This should definitely expand the potential for future development, so that businesses operating there won't feel that their futures are limited.

According to the draft of the statute put forward by the Executive Yuan, in the future, companies in these districts will focus on high-value-added processing that will attract foreign firms and stimulate a new wave of investment that will bring better economic times. The Port of Kaohsiung has petitioned the Ministry of Economic Affairs' Commission of National Corporations (CNC) to be allowed to expand its bounds to absorb some nearby petrochemical plants, thus greatly adding to its industrial might.

Meanwhile, Taoyuan County Commissioner Chu Li-luan is leading the charge for CKS International Airport, making certain that the planning for access roads and other related facilities is completed first. He is also suggesting that Kuantang Harbor be developed as a mixed industrial and commercial port. Apart from providing additional land for the free port at CKS Airport, it would also spur development at the Chingpu Station of the future high-speed railway. This would make it an important harbor in the future when direct links are established between mainland China and Taiwan, giving Taoyuan superior marine, air and land-based transportation facilities. However, even though Kuantang is the only industrial harbor in the north, the development plans are currently are being reviewed by the Industrial Development Bureau, and it remains to be seen whether it will be included within the bounds of the free port.

With respect to Kaohsiung, CNC vice chairman Lu Chi-cheng reveals that the commission is putting together various pieces of land owned by the Ministry of Economic Affairs that will total 183.5 hectares. It plans to use five development strategies, including resource integration and citizen participation, as part of a concerted effort to turn this site in the city of Kaohsiung into a free port.

Lu, who went south to make the announcement, notes that Kaohsiung has several strong suits: it has an industrial base, adjacent land, and a harbor, and it already serves as a distribution center for containers. As for the future, he says that in order to meet the needs of economic development in Kaohsiung, there first of all needs to be an integrated plan for land use and industry. Next there has to be a transformation of industrial character from pure industrial production toward greater emphasis on service industries such as logistics and warehousing, container shipping, trade exhibitions and international conference centers.

Under the Statute Governing the Establishment and Management of Free Ports, a wide variety of business operations can qualify to operate in free ports. These include import-export, warehousing, logistics, assembly, consolidation, packing, repair, processing, manufacturing, exhibitions and technical services, as well as support services, including loading and unloading, build-up and breakdown of cargo, surface transportation, customs brokerage, financial services, food, hotels, and conference organization.

Legislator Chiu Tai-san points out that a business entering the free port wants to save time and be able to practice integrated management. Therefore, every aspect of the shipping process ought to be top quality and easy to manage. For instance, it is essential that it be possible to hold international conferences within the free ports. "We are looking to make things as convenient as possible for the headquarters of international companies, and are trying to spell everything out as clearly as possible, so that foreign companies won't-as has happened so frequently in the past-violate the law without knowing it."

Think about it: Businesses in the free ports, because they are based in the zone, will receive the best possible administrative support. For instance, a company wanting to put on an Asia-Pacific business conference need only issue e-mail invitations; it need not file all manner of applications. When the scheduled day arrives, the company within the free port will have arranged for hotel accommodations within the port, and catering companies can bring food at mealtimes to the conference center. The conference can be held over the course of a day or two, and the administration will happen unobtrusively behind the scenes, allowing the business to focus on what's going on at the conference.

Because status as a free trade port holds such allure, those ports that have not been selected in the first round, such as Hoping Industrial Harbor, and various city- and county-level industrial parks, are all competing to be selected in the next round.

In reality, there is still quite a long way to go. Take Mailiao Harbor: currently the Formosa Plastics Group is investing there and hoping that it will at some time be designated as a free port. Formosa Plastics commissioned the RSEA Engineering Corporation to handle a 170-hectare landfill project in its First Eastern District, which it has just completed. The First Eastern District's full 260 hectares can become land adjacent to the free port. But if in the future, the Second Eastern District of 220 hectares is developed, then there will 500 hectares to use. Industry insiders believe that if Mailiao could really be turned into a free port, and direct shipping was allowed across the Taiwan Strait, then Formosa Plastics wouldn't have to go to the mainland to build a naphtha cracker plant, and could just use its sixth naphtha cracker plant to supply the mainland's mid- and downstream industries, becoming a model of cross-strait division of labor.

Ho Mei-yueh believes that only if free ports are established in appropriate places will they benefit economic efficiency; otherwise money will just be wasted.

As the CEPD sees things, the most suitable places for free port status are international airports, and specifically airports with flights to international high-tech centers. "High-tech products are small, with high added value, and time and efficiency are of the essence," says Ho. The best hope for the success of free ports will be if the people of the ROC concentrate their efforts on the first-round free ports in Kaohsiung and Taoyuan.