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New Foreign Trade Zone Regulations Help U.S. Firms Compete

March 6, 2012

Andrew McGilvray is the staff director for the Foreign-Trade Zones Board, an interagency board chaired by the Commerce Department. He has been with the International Trade Administration since 1988.

On February 17, the White House and the International Trade Administration announced new regulations for the Foreign-Trade Zones (FTZ) program. This first overhaul of FTZ procedures in more than 20 years is designed to enable the program to keep pace with businesses and their decision-making processes.

Since use of a FTZ can reduce the cost of U.S. operations, fast and simple access to the program can encourage investment in U.S. facilities. The new procedures accelerate and simplify the application procedures, and promise to further facilitate U.S. companies’ use of the program to help them compete internationally.

FTZs are designated locations in the United States where companies can use special customs 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. Several thousand companies already use the FTZ program, helping to support more than 300,000 jobs and about $30 billion in exports each year.

For example, the Mercury Marine factory in Wisconsin operates under FTZ procedures, employing more than 2,400 American workers and exporting about $125 million in finished marine engines each year.

The new regulations’ procedures will now make it much quicker and simpler for individual companies to access the FTZ program – like Mercury Marine did starting in 1999. Dramatically reducing costs and timeframes for access is likely to make the FTZ program an even more crucial tool for U.S. companies and workers to compete in the global marketplace.

To find a FTZ in your state, visit the Foreign Trade Zone Board web site.