The United Nations agency also said that the industrial zones, which import and process materials before exporting them again, were huge employment generators but often lacked meaningful links with the domestic economies around them.

The comments came in a report, ``Labour and Social Issues Relating to Export Processing Zones,'' which was issued at the start of a week-long meeting at the ILO's Geneva headquarters on problems posed by the zones and how to solve them.

Experts from 10 countries, including China, will attend.

``It is a regrettable feature of many zones that both male and female workers are trapped in low-wage, low-skill jobs. They are viewed as replaceable and their concerns do not receive sufficient attention,'' the report said.

``The classic model of labourregulation with a `floor' or framework of minimum labour standards and free trade unions and employers coming together to negotiate binding agreements, is extremely rare in export processing zones,'' it added.

China, which has 124 export processing zones, had created the greatest number of jobs. Some 18 million were employed in firms with foreign investment alone, and many millions more in Chinese-owned zone enterprises, according to the report.

North America is host to the largest number of zones with 320, followed by Asia at 225. But developing regions such as the Caribbean, with 51, Central America with 41, and the Middle East with 39 were also attracting these ``vehicles of globalisation.''

Export processing zones are industrial zones with special incentives -- tax holidays, duty free imports and exports -- set up to attract foreign investors, in which imported materials undergo some degree of processing before being exported again.

The United States and Mexico are the most active exportprocessing zone operators, with 213 and 107, respectively.

Most are maquiladoras, or assembly plants, clustered around Mexican border cities such as Tijuana, which the report said was the most important television set-producing area in the Americas, Ciudad Juarez, which produces auto parts, and Matamoros, which turns out electronic components.

The maquila industry, set up in 1965 as an emergency measure, now processes exports worth $5 billion annually, more than 30 per cent of all exports from Mexico, the report said.

In Costa Rica, where there are nine export processing zones, 49,000 jobs have been created since 1981, mostly in the garment and electronics sector.

Export processing zones in China are very different from those in other countries, according to the 50-page report.

``The special economic zones, as they are known, are not only designed to promote investment but to experiment with market economics on a controlled basis, with a view to extending it to other parts of the country in duecourse if it is deemed desirable,'' it said.

``In China, zones are often of city scale and resemble any other modern business complex,'' it added. They included residential areas, recreational facilities and social services.

More and more enterprises were establishing themselves as wholly foreign-owned rather than as joint ventures, and the former exceeded the latter for the first time in 1997.

``This is partly due to the progressive opening up of the Chinese economy, and partly a reflection of the greater confidence of investors to `go it alone' without a Chinese partner,'' the report said.

The vast bulk of the investment had come from Hong Kong, which accounted for $119.9 billion or 54 per cent of the total amount of foreign capital actually used in China last year.