Any important central government policy has ramifications at the local level. Take, for instance, the issue of the "three links" (direct mail, flights and business links between Taiwan and mainland China), which was hotly discussed in November. During their presentation to the Legislative Yuan, deputy defense ministers Kang Ning-hsiang and Chen Chao-ming explained that Kaosiung's international airport would be opened for direct flights to mainland China before CKS International Airport in Taoyuan. After the news was reported in the papers the following day, the people of Kaohsiung grew very excited, believing that this would stir up southern Taiwan's real estate market and provide great opportunities for business. Taoyuan County Commissioner Chu Li-luan, meanwhile, responded at once, saying that Taoyuan will be ready in time for the three links.

"The Council for Economic Planning and Development has stated that a law is going to be drawn up for this project, so we've done our homework-even our assistants know all the details about the statute," said Taichung County DPP lawmaker Chiu Tai-san, holding in his hands a draft of the "Statute Governing the Establishment and Management of Free Ports" that was marked with copious notes in red and blue ink. "We have also strengthened coordination and communications between the parties. Our goal is to pass this law before the end of 2002."

Chiu Tai-san has ordered his research assistant Yu Mao-sheng to "keep both eyes" on this issue. Yu attends discussions held within the party or by the forum on Chiu's behalf and then reports to Chiu. Wang Tuoh, another DPP lawmaker, has also asked his assistant Kuang Hong-chih to follow and participate in the process from start to finish-even allowing Kuang speak on his behalf. DPP lawmaker Chiu Chui-chen of Taoyuan County was especially interested in the regulations pertaining to tariffs. She made many inquiries to the CEPD, the authority in charge of this project, about how exactly the government planned on levying related taxes and what kind of exemptions industries would enjoy. Everybody wants to have a clear understanding of the current draft so that things will proceed smoothly when the final draft is adopted.

Chiu Tai-san's constituency in Taichung County is close to the Taichung International Harbor and several export and industrial processing parks of various sizes. When Liao Yung-lai was county commissioner, Liao was already hoping that the central government would establish a free port here as soon as possible. But before that dream could be realized, the 400-500 mid- and small-sized companies in the coastal areas near Taichung started to close their doors one after another. Some just went out of business; others moved to mainland China. The economy of Taichung has been steadily declining, and local officials have felt the pinch. Nevertheless, they are hopeful that future designation as a free port could turn things around. If the central government and the local government shows their determination to set up free ports, the future may not be so bleak.

Legislators who don't belong to the Free Port Forum, on the other hand, have been speaking at the Legislative Yuan to give their localities a piece of the action. For example, Mailiao Harbor in Yunlin County, site of the Sixth Naphtha Cracker, was established for a specific purpose not related to free port functions. Yet Yunlin County KMT lawmaker Tseng Tsai Mei-tso has expressed the wish that Mailiao Harbor can become a free port like other international ports. TSU lawmaker Lin Chih-lung of Kaohsiung County, on the other hand, has asked the Ministry of Transportation and Communications to speed up the process of assessing the needed runway length at Kaohsiung's Hsiaokang Airport, so that once it attains free port status, Kaohsiung will be able to attract companies from all over the world with its excellent environment and conditions.

Free ports have a lot to look forward to, but that doesn't mean a port can do whatever it wants. In early November of 2002, when the Legislative Yuan was reviewing the Statute Governing the Establishment and Management of Free Ports, KMT lawmaker Hwang Chao-shun proposed another statute to make Kaohsiung a municipal port city of commerce and trade. Under Hwang's proposal, Kaohsiung would have enjoyed a high degree of autonomy. Although the central government would have had jurisdiction over sovereignty, national defense and diplomacy, Kaohsiung could have signed commercial treaties with other countries and areas. In response, DPP lawmaker Chen Chi-mai, who was also elected in Kaohsiung, pointed out that while the motives behind the proposal were good, Hwang wrongly cited Article 118 of the ROC Constitution in support of the proposal and overlooked the articles about the division of power between the central government and local governments and the spirit of the law governing local government systems. Chen said that since almost every clause of the proposal violated the constitution, it simply wasn't feasible.

The issue of tariffs has also greatly interested legislators. PFP legislator Chou Hsi-wei of Taipei County wondered whether the Ministry of Finance (MOF), which is eager to levy more taxes, had really agreed to make the free ports exempt from all commodity, business, cigarette and alcohol taxes, as well as from all customs duties.

The MOF has explained that because these tax exemptions will stimulate the economy, it will be happy to see them implemented. Yu Shao-wu, the director general of the MOF's Department of Customs Administration, has stated that in the future the MOF will lay out easy customs clearance procedures to be used in free ports. The initial plan calls for goods imported into a free port to be exempt from tariffs and require only a declaration.

With the highly competitive global market, how can we strengthen our economy and avoid marginalization? This is the focus of some far-sighted lawmakers. PFP lawmaker Chiu Yi of Kaohsiung City, while questioning Minister of Economic Affairs Lin Yi-fu, stated that he was puzzled by Taiwan's strategy when most other countries were signing treaties to form free trade areas.

Lin answered without any hesitation that Taiwan's strategy is to establish free ports. "Shouldn't we then solve the problem of 'people flow?'" asked Chiu Tai-san, who argued that by not discussing rules for mainland businessmen in the Statute Governing the Establishment and Management of Free Ports, the government seemed to be rejecting the strategy of working toward a complementary division of labor with mainland China. To Chiu it was a great disappointment.

CEPD vice chairperson Ho Mei-yueh was more optimistic. She said that when the draft was under review in the Executive Yuan, the Mainland Affairs Council stated that the Statute Governing Relations between the People of the Taiwan Area and the Mainland Area already covered the issue of mainland businessmen traveling to Taiwan, so that there was no need to draw up another law for them. Therefore, the draft law only regulates other foreign businessmen. And the Mainland Affairs Council is planning to loosen the regulations governing mainland businessmen.

Ho Mei-yueh hopes that legislators understand that the government has decided to create free ports to help industries here to compete in the global market and to relieve people's concerns about the emigration of domestic industries. In the future, as the economic situation on both sides of the strait and around the world changes, the free ports will make adjustments accordingly to raise Taiwan's competitiveness in the global market.