Foreign Trade Zones: Growth Amid Controversy

The original purpose of foreign trade zones (FTZ) - areas located within US boundaries but outside of its customs territory - was to encourage exports and related activities. Until recently, FTZ growth was minimal because the majority of the export-enhancing features simply duplicated other tariff-r...

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Bibliographic Details
Published inChicago fed letter no. 48; p. 1
Main Author Weiss, David D
Format Journal Article
LanguageEnglish
Published Chicago Federal Reserve Bank of Chicago 01.08.1991
Subjects
Advantages
Foreign trade zones
International trade
Manyindustries
Protectionism
Statistical data
Tariffs
Trade policy
US
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Summary:The original purpose of foreign trade zones (FTZ) - areas located within US boundaries but outside of its customs territory - was to encourage exports and related activities. Until recently, FTZ growth was minimal because the majority of the export-enhancing features simply duplicated other tariff-reducing vehicles on reexported goods. Over the last decade, the use of FTZs has grown significantly as US firms, particularly automobile assembly plants, have begun using FTZs to reduce their tariff rate by importing intermediate goods into FTZs duty free and incorporating them as components of finished goods destined for the US market. FTZ growth may be slowed by proposed regulations making FTZ status more difficult to obtain.
ISSN:0895-0164
2163-3592