Free Trade Zones in Southeast Asia

  • Tsuchiya Takeo
Keywords: Global Economic Crisis


The "free trade zone" (FTZ) is like a country within a country. Cut off by barbed wire or concrete walls from the rest of the country and guarded in some cases by "zone police," the zone is "an enclave in terms of customs-territorial aspect and possibly other aspects such as total or partial exemption from laws and decrees of the country concerned," as a survey on FTZs for the Asian Productivity Organization (APO) puts it. The zone has its own authority to which government functions are largely relegated to provide all necessary services related to export-import transactions and to facilitate intra-zone production by its occupant foreign investors, 100 percent (or nearly 100 percent) of whose products are exported abroad. Workers employed in the zone are often subject to special regulations (prohibition of labor disputes, for instance), have to show special passes to enter, and must often undergo body checks when they finish a day's toil. This latter is to prevent "smuggling" of the zone's products into the workers' own country.