Education and applications continue for foreign trade zones
Foreign trade zones were created by Congress in 1934, but their use has recently begun to blossom.
Their popularity can be attributed to a better understanding of the program created by the Foreign Trade Zones Act of 1934.
The Jacksonville Port Authority hosted the “Foreign Trade Zones: Creating new jobs and investment in the United States and helping companies compete in today’s global marketplace” seminar Tuesday.
“The word is getting out on how foreign trade zones can help people’s businesses, and events like this get the information out there,” said Deborah Lofberg, port director of marketing services and the foreign trade zone.
In 1970 there were eight trade zone projects and now there are more than 230, according to the Foreign Trade Zone Resource Center.
The zones are secured areas normally located on or near a U.S. Customs point of entry and are areas deemed to be outside the U.S. Customs territory.
Within a zone, goods can be stored, broken down and distributed, repacked, assembled, sorted, cleaned, exhibited, mixed with foreign and domestic merchandise, title transferred, destroyed, manufactured or cleaned or manipulated.
The program was created to stimulate foreign commerce in the United States and enhance the cost-competitiveness of U.S.-based companies.
Jacksonville gained a competitive advantage when it was awarded Alternative Site Framework Status in May from the Foreign Trade Zone Board.
The new status expands the boundaries of the zone to a 60-mile radius from the Jacksonville Port Authority, the grantee of the zone.
The new boundary included Baker, Clay, Columbia and Nassau counties with Duval. While all of the counties have expressed an interest in developing a zone in their areas, Columbia County appears to be the next in line
“They are the farthest along in the application process at this time,” said Lofberg.
Jacksonville’s Foreign Trade Zone No. 64 includes several locations in the city, including hundreds of acres at the Jacksonville Port Authority’s three terminals and cold storage facilities at the Talleyrand Marine Terminal.
It also covers several industrial parks and Jacksonville International Airport.
The seminar featured experts on foreign trade zones from across the country. About 100 people attended.
Attorney Scott Taylor, of Miller & Company, provided examples of how businesses save money using foreign trade zones.
Taylor, of Kansas City, Mo., explained that a business can import parts for a motor vehicle with a customs duty of 5 percent, but if that part were attached to the vehicle in the zone, then the finished vehicle, not the part, is subject to the customs duty. The rate on the finished vehicle was about 2.5 percent.
The next example was a single-use camera with a flash. There is a customs duty on the flash, but not if the flash is attached to the camera at a foreign trade zone. The finished camera is duty free.
Toner cartridges are another example. There is a customs duty on the toner itself, but not if the toner is poured into the cartridge and then brought out of the zone.
Once the toner is poured into the cartridge, the cartridge is considered a part of the printer and not subject to customs duty, Taylor said.
A developer of one of the largest foreign trade zones in the country urged attendees to show more about the benefits rather than just telling.
“It has to be more than a piece of the brochure. You have to go out and educate people on foreign trade zones,” said Steve Boecking, vice president at Hillwood Properties, which developed the 17,000-acre AllianceTexas development in north Fort Worth, Texas. Hillwood also is the developer for Cecil Commerce Center, which is in the foreign trade zone.
“When we started out, we would tell people that we had a foreign trade zone, but we didn’t know how to help them out with it.”