Foreign-Trade Zones (FTZ's) Help U.S. Based Manufacturers Stay in Business

Greg Jones of Foreign-Trade Zone Corporation (www.ftzcorp.com) discusses the benefits of Foreign-Trade Zones to U.S. Based Manufacurers and tells us that the program is important in keeping U.S. Based Manufacturers competitive in the face of competition against overseas sister plants.

(PRWEB) November 4, 2005 -- Greg Jones, Senior Consultant for the Foreign-Trade Zone Corporation(www.ftzcorp.com), recently authored an article titled “U.S. Foreign-Trade Zones Help U.S. Based Manufacturers Stay in Business,” which was published in the 2005 Fall edition of Trade & Industry Development magazine.

In this article, Jones discusses the Foreign-Trade Zones program and its relationship to trade agreements between the United States and its trading partners. Overall, these agreements have led to lower tariff-related costs to U.S. based companies. But use of Foreign-Trade Zones is up, not down, as we might expect. Why? Because trade agreements often create an irrational tariff relationship between finished products and raw materials. The Zones program helps to rationalize that relationship.

For an example of how U.S. based manufacturers use the program to reduce costs in an irrational tariff relationship environment, Jones points to the computer products industry. Raw materials imported for manufacture into a computer-related product may carry higher tariff rates than the finished product itself. The U.S. based manufacturing company is thus at a competitive disadvantage. It must pay duty on the component parts used to manufacture a product. That duty is often higher than that paid on the same finished product made by the U.S. company’s overseas sister plant. The U.S. Foreign-Trade Zones program helps U.S. manufacturers to remain competitive because it allows them to reduce the duties on the raw materials that go into finished products for domestic consumption – in some cases, to a rate of “Free.”

The Foreign-Trade Zone program, which has been in existence since 1934, is designed to improve the competitiveness of U.S.-based companies in international trade. The FTZ program does this by helping them reduce their tariff-related costs. In many cases, for the manufacture of products destined for the U.S. market, it is also possible for some manufacturers to obtain tariff reductions even though they do not export their finished products.

Jones began working in the FTZ program in 1986, and has been an active member in the National Association of Foreign Trade Zone (NAFTZ) since 1987. He served as president from 1993 to 1995, and was designated as an Honorary Life Member in 2000. The Foreign-Trade Zone Corporation (www.ftzcorp.com) is a service provider offering FTZ cost-benefit analyses, FTZ Board applications, training, assistance in designing, creating and managing Zone projects, and SmartZone Foreign-Trade Zone management software (www.ftzsoftware.com).

To view the entire article titled, “U.S. Foreign-Trade Zones Help U.S. Based Manufacturers Stay in Business” by Greg Jones, please use the following link:http://tradeandindustrydev.com/issues/article.asp?ID=117

To view an interactive map of U.S. Foreign Trade Zones, please use the following link: http://tradeandindustrydev.com/ftzones.asp

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