The recent expansion of the Foreign Trade Zone-182 (FTZ-182) is good news for the local economy. It opens opportunities for business growth, giving existing businesses incentives to stay and grow here, as well as attracting new businesses and creating jobs. Because of the partnership between Fort Wayne International Airport (FWA), the City of Fort Wayne and the Fort Wayne-Allen County Economic Development Alliance, along with the cooperation of the U.S. Customs and Border Protection Office, the expansion of FTZ-182 brings with it a vision for substantial economic growth in northeast Indiana.
“The Alternative Site Framework Program (ASF) that was approved for FTZ-182 expands our foreign trade zone to eight counties,” says Patrick Dooley, vice president of Airport Development at FWA. “Any company located within the eight-county area can apply to be an FTZ operator.”
FWA is in a position to facilitate the increased commerce that is likely to result from manufacturers attracted by the financial and operational benefits of doing business in an expanded FTZ, an area that exists outside U.S. Customs territory. Companies operating in the FTZ can defer, or even avoid, payment of duty and often enjoy a lower tariff rate. Restrictions, limitations and regulations regarding how much merchandise can be brought into the country are eased or eliminated as long as the merchandise remains in the FTZ. General benefits to the public include facilitating and expediting international trade; encouraging retention of domestic manufacturing; assisting with state and local economic development efforts; and helping to create employment opportunities.
“Companies that could benefit from being in the program include those that import materials or components that are assembled or manufactured for sale in the United States or are exported,” says Dooley. “The benefit comes in reduced, deferred or eliminated tariffs on the materials used in assembly or manufacturing. Companies that warehouse imported products for distribution in the United States can defer tariffs until the products leave the FTZ site.”
The expanded FTZ now includes eight counties: Adams, Allen, DeKalb, Huntington, Noble, Wabash, Wells and Whitley.
“Only four sites were included in our prior FTZ-182 program and none was ever activated with a user,” says Dooley, meaning the sites were never used by businesses that had achieved FTZ status. “The difficulty with the old program was that an operator had to be located in and operating at one of the four sites. The new program is flexible and operators can be anywhere within the eight-county area; they do not have to relocate.”
Any company is eligible to apply for status provided it meets the security and other requirements of the FTZ Board.
“All FTZ sites are inspected by U.S. Customs prior to submission of an application,” Dooley says. “Approval is an important element in obtaining FTZ status.“
Already officials are seeing the fruits of their cooperative planning. Local economic development organizations in the eight counties are meeting with companies that may benefit from the FTZ program. Two companies are currently evaluating their import tariffs, and increased activity at www.bizFTZ.com suggests that business owners are accessing the extensive information about the program online.
“We believe more companies will apply for FTZ status since the ASF program has made the process affordable and flexible,” says Dooley. “It is impossible to predict, but ideally we would like to add two operators in 2012 and then grow annually.”