Three little words boost global competitiveness for the Research Triangle Region
Foreign Trade Zone. This may not be the first three-word phrase that comes to mind for most of us, but for Dudson China, Revlon, Merck, Southern Lithoplate and others who use the region’s Foreign Trade Zone #93, it may be synonymous with those three little words from movies and song - I love you.
One of six foreign trade zones in North Carolina, FTZ #93 was designated in 1983, with Triangle J Council of Governments as the Grantee. The zone’s permanent magnet site at World Trade Park is operated by Longistics, a full-service provider of global logistics services, with offices located near RDU. In November 2012, the service area for FTZ#93 was officially expanded to match the 13-county Research Triangle Region served by Research Triangle Regional Partnership.
So what is a foreign trade zone and how does it benefit business? A foreign trade zone is a very secure area, in or near a port of entry, that is considered to be outside of the commerce of the United States and is supervised by US Customs and Border Protection. The key benefits? Duty deferral or inverted duty savings. Goods brought into the zone can be stored, manipulated, cleaned, repaired, destroyed, mixed, processed, relabeled and/or tested while remaining in the foreign trade zone as duty free. Customs duties are deferred until the product leaves the FTZ for US consumption. Additionally, FTZ users may elect to pay the duty rate applicable to component materials or merchandise produced from component materials – whichever is the lower rate. Either way, this means cash flow savings, as well as reduced costs overall. FTZs work for US exporters, too, when components are brought into the zone, stored or assembled in the zone, then shipped out of the country – all duty free. This helps level the playing field for US businesses when it comes to competing against foreign sources. FTZs also assist US manufacturers and other businesses by improving supply chain efficiencies and supporting customs compliance and cargo security efforts.
This presentation from Cornelia Steinert, formerly of PointTrade Services, Inc. breaks down the basics of foreign trade zones in layman’s terms and provides some great examples of how savings are gained by FTZ use.
Having FTZ#93 on our doorstep brings these benefits to the Research Triangle Region, and with the recent service area expansion, the benefits are extended even further. TJCOG is working with area Chambers of Commerce and economic developers to inform potential FTZ users of what it takes to make this work for businesses throughout the region. We’ve taken the show to the road, holding workshops in Granville, Harnett and Johnston counties, and we’re ready to schedule more. To find out how your business can realize FTZ benefits or to arrange an informational session on the ins-and-outs of FTZ#93, contact Renée Boyette, FTZ#93 Administrator, email@example.com or 919.558.9403.