Re: FTZ's

John,

What are your thoughts on Foreign Trade Zones (FTZs)
as they relate to manufacturing?

Can you provide an example of how FTZs are used and
how they can benefit an exporter/importer?

Thanks in advance.

JM

FTZ's (Foreign Trade Zones) were supposed to make America competitive by
facilitating foreign trade with less friction... the friction of importing
goods into the USA manipulating them, and then re-exporting them without the
paperwork hassles normally associated with such activity.

They were supposed to help people "game the system" by, for example, bringing
in radio parts from various countries, which individually had high duty
rates, do light assembly in the FTZ, and then bring "into the commerce of the
United States" (clear customs) at the much lower duty rate that completed
radios have.

Boeing has its own FTZ because it brings in jets for repair, and parts made
overseas on jets to be sold overseas. This way those parts come in and go
out duty free.

FTZ's dont work as hoped... their managers go begging for patrons, when there
is really no use for them. They can actually add paperwork and costs, since
they are heavily managed by govt. If republicans are sincere about cutting
the size of govt, this is a place they could start and no one would notice.

They solve problem that doesn't exist... since we have always had duty
drawback, which allows importers to recollect 99% of any duty paid on an item
imported and then re-exported.

So, as is the pattern, they help big biz avoid taxes and do nothing for small
biz int'l trade.

John

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