Foreign Trade Zone Changes Would Benefit Local Business
Bauerlein, David, The Florida Times Union
Byline: DAVID BAUERLEIN
Foreign trade zones have grown nationwide, giving companies a way to control costs when they use imported products.
Currently, eight sites in Jacksonville offer the benefits of a foreign trade zone. They are at the port, Jacksonville International Airport, and several industrial parks on the Northside and Westside. The Jacksonville Port Authority intends to seek federal approval for speeding the approval process of foreign trade zone benefits throughout the region - Duval, Clay, St. Johns, Nassau and Baker counties.
Scott Taylor, a Miller & Company attorney who will give a presentation today at JaxPort-sponsored seminar, and Deborah Lofberg, director of marketing support service for JaxPort, discussed the role of foreign trade zones. The seminar is full, but Lofberg can be reached at (904) 357-3072 for anyone interested in the program.
What is the impact to a business' bottom line of being in a foreign trade zone?
Taylor: A business can reduce or defer the payment of custom duties on imported merchandise that's held in a foreign trade zone, either in warehouses and distribution centers or in manufacturing. That product can subsequently be sold in the United States, where payments may be made on customs duties, or if it's exported, payment is avoided because a foreign trade zone - while it's physically in the U.S. - is outside the U.S. Customs territory.
Are there particular requirements that add to the expense of running the business?
Taylor: As with anything, if there's a benefit, there's a cost. The main thing is the facility is a secured facility. Most of the modern facilities being built today would meet the basic requirements. The other costs are being able to manage inventory. You have to be able to track merchandise. That has to be accurate, as it should be without a foreign trade zone. The benefits are the ability to save money if you are importing and exporting and competing in the global economy.
When you talk to businesses about the program, are there particular reasons why they decide not to do it?
Taylor: The current way the program is set up, it requires several months to get approved in Washington - six to 10 to 12 months to get the foreign trade zone designation. The time frame is a big deal. What we're going to talk about (at the seminar) is the new alternative site framework which is an option the Department of Commerce has just put in place to expedite these approvals. …