anufacturers increasingly are taking advantage of the benefits of locating plants inside U.S. Foreign Trade Zones, according to a new report by Greg Jones, senior consultant to the Foreign- Trade Zone Corp.
In the 66th Annual Report of the Foreign- Trade Zones Board to the U.S. Congress, Jones states that shipments received at General- Purpose Zones and Subzones increased more than US$50 billion last year to a total of more than $300 billion.
Growth was especially robust in the manufacturing sector, as more American and global companies seek relief from the “inverted tariff” relationships created by free- trade agreements. Special incentives in U.S. FTZs allow companies to reduce their Customs- related costs substantially.
The effective duty rate on the manufacture of many high- tech components is now essentially “free,” according to Jones, if a U.S. company makes its products inside a U.S. FTZ.
As a result, manufacturers are now taking advantage of the program to make products as diverse as computers, video and telecommunications equipment, plastics, food products, power tools and lawn care products, industrial and agricultural equipment, large and small appliances, chemicals and petrochemicals, automobiles and auto parts, pharmaceuticals, ships, and even sporting goods.
U.S. FTZs also figure to benefit from increased trade with Mexico. The Mexican government recently announced an investment of US$657 million to improve its port infrastructure.
More than two- thirds of this investment will come from private sources, and about US$184 million will come from government sources, according to the Mexican Ministry of Communications and Transportation.
About $143 million will go toward public works projects, $19 million will be used for purchases, and $22 million will be invested in maintenance.
The largest investment was allocated to the Altamira Port in the State of Tamaulipas in Northern Mexico. Mexico plans to start importing liquefied natural gas through this port, which is why it will receive about 49 percent ($318 million) of the total Mexican port improvement funding.