Pacific Money | Economy | East Asia

Taiwan’s Tech Diplomacy Has a Labor Problem

Migrant worker recruitment debt threatens the island’s access to Western markets and its ties with Southeast Asia.

Foreign migrant workers often gather in the square in front of Taipei Station during their day off. Photo taken Sep. 24, 2023.

In an investigation published this October, three migrant workers at a Garmin factory in Taiwan said recruiters had forced them to sign documents falsely denying the mandatory fees they had paid to get jobs. Two reported that the recruiters threatened to retaliate and deport them if they disclosed the charges. These workers were making products for a U.S.-based electronics company.

The nonprofit Transparentem interviewed 24 workers at seven manufacturers operating in Taiwan and documented recruitment fees totaling $6,400 each. Compal, the laptop maker, and Garmin claimed they had long prohibited worker-paid fees. But they only reimbursed current migrant workers after investigators contacted them, and excluded former workers from compensation. Despite corporate promises, these exploitative charges continued.

These findings expose a blind spot in Taiwan’s economic diplomacy. Taipei and Washington should stop treating their technology partnership and Taiwan’s Southeast Asian labor relationships separately. Recruitment abuse threatens Taiwan’s Western market access and regional goodwill. Fair recruitment is just as integral to supply chain security as factory investment.

A framework for reform already exists. The February 2026 Taiwan-U.S. trade agreement compels Taiwan to prohibit worker-paid recruitment fees and related costs in manufacturing and fishing within three years of entry into force. Yet on October 6, Premier Cho Jung-tai said unresolved U.S. trade measures were delaying ratification in Taiwan’s legislature. Tariff negotiations cannot excuse delaying recruitment reform.

Taiwan’s Labor Ministry counted more than 910,000 migrant workers at the end of August, including approximately 100,000 lacking valid work permits. Among permit holders, 515,000 worked in manufacturing, with 127,000 of those in the electronics industry. These numbers reveal just how critical migrant labor is to Taiwan’s technology sector.

Rather than stopping at a recruitment fee, the brokerage system often continually exploits workers. Agencies abroad initially charge workers to secure jobs in Taiwan, and Taiwanese brokers then skim recurring service fees off worker bank accounts that they control. Taiwan also restricts migrant workers from changing employment, requiring extensive paperwork and official authorization. Debt and restricted mobility thus reinforce each other.

My fieldwork has revealed what is at stake. In May 2024, I interviewed a Filipino worker at a Hsinchu semiconductor supplier. The worker described 12-hour night shifts, six days a week, and a broker who deducted fees from her wages. Only Catholic missionaries and more experienced migrants offered the worker reliable support.

While debt alone does not establish forced labor, the International Labor Organization (ILO) recognizes debt bondage as an indicator of it. For a worker still repaying heavy recruitment fee loans, the cost of reporting abuse could be exceptionally high. Losing their job could not only force them to default on the loan that secured it, but also threaten their family’s very livelihood. Such fear of whistleblowing also makes buyers and regulators less aware of actual factory conditions.

The commercial consequences are stark. In September 2025, U.S. Customs and Border Protection detained imported Giant bicycles and related products manufactured in Taiwan over forced labor concerns. Giant subsequently expanded recruitment fee reimbursements. By September 2026, companies comprising over 80 percent of Taiwan’s bicycle exports had joined an industry human rights initiative. Customer access restrictions accelerated reform.

Electronics manufacturers should take notice. The European Union will automatically block products made with forced labor by December 2027. Exporters will soon face significant overseas scrutiny and potential import bans. Continued broker charges could then lead to shipment delays and loss of customer trust. Taiwanese electronics firms cannot continue offloading their due diligence responsibilities.

The diplomatic stakes are just as important. Launched in 2016, Taiwan’s New Southbound Policy promised a “people-centered” partnership with its Southeast Asian neighbors through trade, education, and closer social ties. The Philippines, Vietnam, Indonesia, and Thailand are key partners in that initiative; they are also the home countries of virtually all migrant workers in Taiwan. With the world’s lowest birth rate, Taiwan’s reliance on Southeast Asian workers will only grow. Since Taiwan has no formal diplomatic relations with any of these countries, properly treating their migrant workers is especially important.

Taiwan’s electronics sector would particularly benefit from improved ASEAN-Taiwan relations. Filipinos account for nearly 83 percent of migrant permit holders across electronic components and computer, electronics, and optical manufacturing. Properly treating Taiwan’s Filipino workers is thus integral to sustaining the U.S.-Taiwan technology relationship. 

Recruitment costs have already generated bilateral friction. In 2020, Taiwan’s Labor Ministry rejected Indonesia’s demand that employers cover recruitment expenses and said it would consider recruiting elsewhere. In February 2026, the Philippines’ envoy in Taipei suggested Taiwanese authorities crack down on exploitative brokers and encouraged direct hiring. These governments want Taiwan to treat their citizens better.

While worker exploitation may not determine an ASEAN government’s policy toward Taipei, it can definitely sabotage Taiwan’s New Southbound Policy. Taiwan cannot credibly offer a people-centered partnership with ASEAN countries while exploiting their citizens’ labor. Protecting these almost 1 million migrant workers would thus strengthen the New Southbound........

© The Diplomat