Inside FTZ 8/12
Guest blogger Lukas Espich
I started my research on the Foreign-Trade Zones (FTZs) because of an assignment that the Executive Director, Alan Tio, lit my interest on. Considering the background of Alan’s work, he knew a lot more than I (a measly intern!) about these FTZs. Although his expertise is thorough, he put me on the task of learning the system so that I could create a section of our website to educate our community about the idea of FTZs and the benefits that can come from using them. I began by researching what exactly a Foreign-Trade Zone is.
According to the United States Import Administration a Foreign-Trade Zone is a designated location in the US where companies can use special procedures that help encourage U.S. activity and value added – in competition with foreign alternatives – by allowing delayed or reduced duty payments on foreign merchandise, as well as other savings. Which to sum-up, is a geographic area that through limiting the hassles and costs of importing and exporting makes international business friendlier.
By first impression, this seems like a good opportunity to give business in the United States an extra edge. By lowering the cost of doing global commerce for companies in our region and country we can widen our market of the global economy and continue to keep our edge on the competitors. You may be saying to yourself, well it may be a good idea theoretically, but how well does it fit into our business system here in Northeast Indiana?
The policy that created this edge for business was created by the Foreign-Trade Zones Act of 1934. This act was created in response to the Smoot- Hawley Tariff that increased tariffs on exported and imported goods. While this started the ball to roll, it has really gained momentum in the past decade and is now creating programs that increase its usability! BizFTZ is a program that represents our eight county region in Northeast Indiana and is attempting to expand our one FTZ in Fort Wayne to more locations in our region!
This program is designed to make the advantages of Foreign-Trade Zones more reachable for businesses. It concentrates on increasing usability and access while minimizing the amount of time it takes to use one of these areas. Overall, this is a really interesting policy and could potentially be an extremely useful tool in increasing the availability of the global market!
For more on Foreign-Trade Zones click here | For more about BizFTZ's program click here
Moving a step forward,
Lukas Espich
Professional Intern