U.S. Communities Use Foreign-Trade Zones as a Local Economic Development Tool

The Foreign-Trade Zones Program offers locally-based businesses engaged in international trade an opportunity to enhance their bottom-line competitiveness. By providing FTZ services, American communities benefit from the economic activity that the program promotes.

Mobile, AL (PRWEB) September 17, 2006 -- Greg Jones, Senior Consultant for the Foreign-Trade Zone Corporation (www.ftzcorp.com), discusses U.S. Foreign-Trade Zones (FTZ) program in an article recently published in Expansion Solutions Magazine entitled “Foreign-Trade Zones: Using a Federal-Trade Program as a Local Economic Development Tool.”

The Foreign-Trade Zones Program offers locally-based businesses engaged in international trade an opportunity to enhance their bottom-line competitiveness. U.S. Foreign-Trade Zones differ from many other countries’ “Free Trade Zones,” which have existed in some form or another since Biblical times. Foreign-Trade Zones offer U.S.-based companies more benefits than “Free-Trade Zones.” These benefits include duty exemption on re-exports, relief from “inverted tariffs,” improved logistics, cash flow through duty deferral, no duty on value added, Zone-to-Zone transfers, no duty on damaged or nonconforming items, and duty avoidance on government and military sales.

American communities benefit from the economic activity that the program promotes. When a local business uses the Zones program to enhance its profitability, the economic effects ripple throughout the local and regional economy. First, direct employment is increased or maintained. Second, local suppliers and vendors gain or maintain their geographical advantage because it is easier and cheaper to sell goods or services to the company across the street than to do the same to a company across the ocean. In turn, second, third, and fourth tier suppliers maintain their economic base. In every case, the people involved in this economic activity buy homes, food, and other goods.

Many local governments maintain their operations through the taxation of the economic activity that directly or indirectly results from manufacturing and distribution operations conducted in the Zone. These taxes can be property taxes or taxes on the retail sale of goods, that allow local governments to provide the physical and social infrastructure necessary to maintain their communities as attractive places to live. Foreign-Trade Zones, and the economic activity that they promote, provide funds for schools, roads, hospitals, police, fire and sanitation services, as well as the building and expansion of the infrastructure associated with trade, such as port facilities, intermodal centers, airports, air cargo centers, universities, and so on.

Jones began working in the FTZ program in 1986, and has been an active member in the National Association of Foreign Trade Zones (NAFTZ) since 1987. He served as president of the NAFTZ 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 its SmartZone® Foreign-Trade Zone management software (www.ftzsoftware.com).

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