Rock County might join foreign trade zone
Later this spring, Rock County is expected to join 10 others in southeastern Wisconsin in a foreign trade zone associated with the Port of Milwaukee.
The U.S. government created the program in the 1930s to promote international trade and increase the global competitiveness of U.S.-based companies.
A foreign trade zone is an approved area within the United States—in or near a U.S. Customs port of entry—that is considered outside the U.S. Customs territory. Certain types of merchandise can be imported into a zone without going through formal customs entry procedures or paying import duties.
Customs duties and excise taxes are only due at the time of transfer from the zone for U.S. consumption. If the merchandise is re-exported, then no duties or taxes are paid on those items.
Companies in the zone can defer, reduce or eliminate duties, which represents costs savings.
With prior approval, businesses can have their imports delivered directly to their facility without waiting for customs clearance. This provides a more efficient supply chain.
Communities benefit, according to foreign trade zone officials, because cost savings on tariffs can be used for other investments such as workforce expansion or adding equipment or infrastructure. The savings also are a benefit that doesn’t require any local funding, they said.
“Basically, what it would do is reduce or defer the amount of cash a company has to lay out and allow it to reinvest that money in other things,” said James Otterstein, Rock County’s economic development manager.
“It also can allow a company to sit on that obligation until product leaves the zone and goes into the U.S. market.”
Last updated: 8:06 pm Thursday, December 13, 2012