First exclusive free-trade harbor starts operation in Bali Township

        Taipei Harbor in Taipei County's Bali Township became the first seaport in Taiwan to begin operations as a dedicated free-trade harbor zone Oct. 6, when Tonglit Logistics Co. opened for business. Officiating at the Tonglit opening-day ceremony, Premier Frank Hsieh urged other local industries to follow suit and set up shop to enjoy the advantages offered by the 79-hectare zone.

        It is designed to accomodate transshipment and other logistics services, onsite value-added manufacturing operations as well as oil storage facilities. It features zero tariffs and commodity taxes, reduced business taxes, fast customs inspections, and streamlined flow of materials and goods within the zone.

        Tonglit's business strategy is to specialize in the import and export of auto parts and automobiles in coordination with auto and auto-parts manufacturers that are expected to set up factories in the zone in the near future.

        An additional 110-hectare area hugging the harbor is scheduled to be up and running by 2008. Its focus will be on cargo-container handling.

        The government subsidized US$32 million worth of infrastructure and organizational projects at Taipei Harbor in 2004 as part of its six-year National Development Plan launched in 2002. The harbor authority's application to become a free-trade zone was formally approved by the Executive Yuan this May. Members of the Council for Economic Planning and Development (CEPD), the Ministry of Transportation and Communications (MOTC) and government agencies with a role in harbor administration completed a final onsite inspection of the first-phase development area in early September, and its operations license was issued Sept. 14.

        Taipei Harbor is the fourth harbor in Taiwan approved as a free-trade zone, following those in the vicinities of Keelung Harbor, Kaohsiung Harbor and the Taichung Harbor. It differs from the earlier three in that the entire harbor area will operate as a free-trade zone. It is anticipated that, in the near future, businesses in the first-phase 79-hectare zone will generate annual revenues of US$20 million and create about 400 jobs.

        The CEPD pointed out that the Taipei Harbor free-trade zone has the advantage of being close to the Chiang Kai-shek International Airport in neighboring Taoyuan County, where work on another free-trade zone is under way. The Taoyuan free-trade airport zone will be the first of its kind in the world, according to the Executive Yuan. The two zones will form an air-sea strategic partnership that is expected to give them a strong position in the global logistics service market and stimulate the establishment of value-added manufacturing operations.

        Meanwhile a task force at the Ministry of the Interior is drawing up plans for the development of a district contiguous to the Taipei Harbor free-trade zone that will have facilities for conferences, business offices, lodging and recreation.

        The legal basis for the privileges enjoyed by businesses in free-trade zones is the Statute for Establishment and Administration of Free Trade Harbor Zones, an organic law that was drafted by the MOTC and came into effect in July 2003. Besides harbors, the law allows for the establishment of free-trade zones at airports as well as at already-established industrial zones. The government's goal is to have at least seven free-trade zones in operation around the island by 2008.

        In order to facilitate business consultations, the law also provides for the issuance of 72-hour landing visas for certain foreign visitors who remain within the free-trade zones.