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National Association of Foreign-Trade Zones Welcomes Congressional Research Service Report on U.S. Zones

Analysis by Library of Congress Research Arm Recognizes Role of U.S. Zones in Nation's Competitiveness, Identifies Issues of Congressional Interest

WASHINGTON, Sept. 10, 2012 /PRNewswire-USNewswire/ -- A report prepared by the Congressional Research Service affirms the important and growing role that Foreign-Trade Zones play in the U.S. economy, according to a statement released today by the National Association of Foreign-Trade Zones.

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The report, U.S. Foreign-Trade Zones: Background and Issues for Congress, "provides important and useful information for members of Congress and policymakers in federal and state governments to consider in structuring programs to attract and retain investment and jobs," said NAFTZ President Daniel Griswold. "The authors of the CRS study have produced a report that explains both the basis for the FTZ program in the U.S. and around the world and its benefits in clear language, while still providing detailed analyses of key program provisions and related issues."  The statement was released as NAFTZ's 40th Annual Conference and Exposition convened in San Diego, California.

The report points out that FTZ activity represents a significant share of U.S. trade. Over 12 percent of foreign goods entering the U.S. in 2011 came through Foreign-Trade Zones.  From 1993 to 2011, the real value of foreign inputs into FTZs increased sharply, from $27 billion to $96 billion in 1993 dollars.  FTZs support over 320,000 jobs, many in the crucial manufacturing sector.

"NAFTZ is particularly gratified that the report highlights the contributions the FTZ program has made to recent successes in the international automotive industry," Griswold continued. "International automobile manufacturers such as Volkswagen, Nissan, BMW and Toyota have experienced multi-million dollar savings through their use of FTZs – increasing exports, boosting profitability, providing well-paying jobs and sustaining the economies of their communities." The sector's impressive growth is also highlighted in NAFTZ's 2012 report, The Impact of Foreign-Trade Zones on the 50 States and Puerto Rico. Issued annually, the 2012 report was released in July and is available through the organization's website.

"The report succinctly summarizes the benefits FTZs provide," Griswold said. "Savings from tariff reduction for manufacturing; reduced fees and other costs; increased efficiency in movement of raw materials, components and finished products; administrative efficiencies; state and local tax benefits; and deferral of duties – all within clear rules – help U.S. corporations maintain efficient and competitive operations in the U.S. The availability of the FTZ program also attracts and retains foreign and domestic investment in manufacturing, distribution and storage facilities in the United States."

The CRS report also notes the important role the U.S. FTZs play in enhancing cargo security. FTZs incorporate screening and securing measures beyond those for products imported for direct consumption. Part of the Customs and Border Protection "activation" process includes background checks on key employees, a review of the security of the facility, and an assessment of the integrity of inventory controls and recordkeeping systems to a much greater degree than in other import settings.

The NAFTZ statement commended CRS for attempting to provide a balanced analysis by pointing out some potential costs of FTZs to competing producers in the U.S. economy. However, said Griswold, the NAFTZ "believes these concerns are clearly and adequately addressed in the FTZ statute and regulations, and in the fair and transparent process of considering new applications," which was streamlined earlier this year by the Foreign-Trade Zones Board.

The full text of the NAFTZ statement is posted on the association's website at www.naftz.org.

Brian Hannigan, Smith Dawson & Andrews
202-835-0740 [email protected]
Brian Picone, NAFTZ
202-331-1950 [email protected]

SOURCE National Association of Foreign-Trade Zones

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