Although Hawaii struggles to pass a bill that establishes a State Port Authority and a Port Authority fund, the state continues to move forward in terms of port and trade development. Key to this growth is the establishment of Foreign Trade Zone (FTZ) No. 9, which encompasses all of Hawaii's FTZs. The FTZ handled some $3.3 billion worth of merchandise for the year ending Sept. 30, 2000 -- up from $2 billion the previous fiscal year. Foreign Trade Zone No. 9 provides companies with significant tax shelters for goods, especially those intended for import or export. It was incorporated as part of a nationwide program to encourage international trade.

British Columbia on Deck for Asian Trade "Planned investments by the Vancouver Port Authority and its tenants of $1.3 billion in Western Canadian infrastructure over the next 10 years will continue to strengthen the economy," says Captain Gordon Houston, president and CEO of the Vancouver Port Authority. Future investment plans, without considering multiplier impacts, will mean 1,300 direct jobs annually.       But what is the draw of British Columbia's (BC) ports? In a word: proximity. Vancouver, BC's largest port, offers shipping times to major Asian ports two to three day's shorter than shipping times from Los Angeles. And Prince Rupert, BC's second major deep-water port, is the closest North American port to Asian markets.       Last April, BCR Marine and the Vancouver Port Authority signed a 21-year lease that will result in an initial $10.4 million investment and an increase in container handling capacity at Centerm. "This long-term lease creates the stability we need to invest in additional equipment and capacity," says Bill Weymark, president and COO of BCR Marine. "More capacity will improve customer service and keep the facility at the leading edge in the maritime cargo industry."       Maritime cargo is one of two key sectors at the port, the other being the cruise industry. Maritime cargo accounts for 19,700 direct jobs, and the value of the cargo shipped through the port is $18.4 billion.

      As the importance of trade with Asia rises, so do the advantages of FTZ No. 9. Just ask local ship chandler Aala Produce, which supplies provisions to vessels calling at port. The company consolidates and stores its liquor and cigarettes at the FTZ to avoid state and federal taxes. This simple matter of location allows Aala Produce to avoid a 40 percent state tax on liquor and provides sizable savings on cigarettes, according to Jerry Tamamoto, vice president of Aala Produce. "This is a savings that we can pass on to our customers," he notes. "And the pricing helps us remain competitive, both locally and internationally."
      To encourage small businesses like Aala to take advantage of the facilities and its tax shelters, FTZ No. 9 is setting itself up as a business incubator, providing office space and warehousing facilities to startups. Warehouse rates are calculated on a product-by-product basis. Companies can consolidate, repackage and check on products while they're in warehouse. And as long as the items remain within the FTZ, there is no duty to pay.
      The state also hopes to attract high-tech manufacturers by designating such locations as the Mililani Technology Park in central Oahu and the Maui Research and Technology Park in Kihei, Maui, as FTZs.
      New export laws also promise opportunity for exporters. "Hawaii exporters can increase their competitive edge by taking advantage of the extraterritorial income exclusion (EIE) tax benefit," Alan Yee of Grant Thornton LLP told Pacific Business News (June 15, 2001). "Under the new law, companies may exclude 15 percent to 30 percent of export sales income from U.S. taxation."
      Businesses that qualify for benefits under the new law include U.S. manufacturers and producers, as well as U.S. wholesalers and distributors of goods manufactured or produced by others in the United States.