Global economics operates in full motion in the Southeast Region. As of 2012, when researchers surveyed the region’s business landscape, there were 58 companies here operating within targeted cluster areas that are headquartered outside the U.S. More than half of the region’s foreign-owned facilities were engaged in manufacturing at some level. Western Europe accounted for the majority of identified companies, the survey found.
Locally grown companies, too, are engaged in international commerce, developing relationships with overseas suppliers, customers and business partners. Assets like the Port of Wilmington, two commercial airports, our excellent universities and hospitable communities make the region the ideal base from which to operate globally. Those benefits are about to grow even more with the expansion of a foreign trade zone (FTZ) across much of the region.
Last spring, federal authorities approved a request to extend FTZ 214, which formerly covered only the North Carolina Global TransPark in Kinston. Soon the zone will stretch across 24 counties, nine of which are in the Southeast Region.
FTZ’s offer companies several advantages: they are a means for deferring duty on foreign products until they’re actually sold to U.S. buyers. That frees up considerable cash flow for firms. A company may also lower the duty on products assembled in the U.S. with foreign components. An FTZ user, for example, can import motors carrying a 4% duty. He then uses them to make vacuum cleaners, which are free of duty. When the finished vacuum cleaners leave the FTZ and enter U.S. commerce, the duty rate on the motors drops from the 4% to zero. By locating in a zone, the manufacturer eliminates duty on the component, reducing its costs considerably.
The original concept of a “free port” was successfully attempted over a century ago in Hamburg, Germany. In 1934, the U.S. Congress saw value in the idea and authorized Foreign Trade Zones in the United States. There are over 230 FTZs in the United States today, according to the U.S. Department of Commerce. The N.C. Department of Transportation administers FTZ #214, which now encompasses Bladen, Brunswick, Columbus, Cumberland, Duplin, New Hanover, Pender, Robeson and Sampson counties.