American factories like this NCR facility can benefit from the U.S. Foreign Trade Zones program. Photo: Trevor Williams
Julie Brown

Encouraged by rising profits and tax reform, polls showed that business confidence surged last year to record highs. That positive sentiment was built on decades of relative predictability in America’s monetary policy, regulatory environment, labor force and trade policies.

But the records may not last for long. America is changing how it engages with its trading partners. And increasing unease over the future of global trade is prompting business to explore all options to remain competitive. 

The business community should consider how the most stable of federal trade programs, U.S. Foreign-Trade Zones (FTZ), can bring greater certainty to their operations. 

FTZs have a track record of success dating back to its establishment by Congress in 1934. The program predates every existing U.S. free trade agreement and enjoys a rare durability that can only come from a deep well of bipartisan support. It is narrowly designed to help grow the economy by making America more competitive with other nations for global investments and job creation. And it works.

The idea is simple: FTZs allows manufacturers to reduce their federal duty payments on imported parts and materials used in American factories. Distributors, too, can reduce their reporting requirements to U.S. Customs and Border Protection and contain their costs with annual caps on fees. 

The result is a lower cost of doing business, which is particularly important during periods of economic decline. Companies in the energy sector, auto manufacturers and consumer electronics distributors and manufacturers have all credited the program at one time or another with their ability to continue operating in the United States.

Thankfully, we are in the midst of the third-longest economic expansion in our country’s history, and Georgia has one of the largest concentrations of businesses in the FTZ program.

The businesses working with Georgia Foreign-Trade Zone (GFTZ), the largest program administrator in the state, contribute to Georgia’s consistent ranking as the top state for business. They are a part of the growth story at Hartsfield-Jackson, the busiest airport in the world, and the Port of Savannah, which handled a record number of containers last year. And they are significant job creators.

Of the 420,000 jobs in the U.S. that are directly tied to the FTZ program, nearly 9,000 are in Georgia. The bulk of those jobs in Georgia are with Chico’s FAS, Yamaha Motor Manufacturing Company, and Roper Corporation. Each rank as the top private employer in their respective county. 

The FTZ program is an element of their success, but local communities are often the ultimate beneficiaries. These three businesses alone have invested millions of dollars in the cities and counties they call home, and there are dozens more like them across the state.

When businesses start to realize savings from the FTZ program they are better able to make capital investments, create new jobs and spend on logistics. And as they grow, so too does public spending on rail, highway, port and utility infrastructure projects to support the movement of people and goods. Each of those projects are job creators, too. 

Workers, county officials, economic developers, and anyone else with an interest in the continued health of Georgia’s economy should urge businesses with a global supply chain to explore the FTZ program. It is proven to be capable of delivering for businesses and workers alike. And when businesses participate in the FTZ program, they send a signal to their communities that they are here to stay and that their operations are built to last. 

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Julie Brown is the President and CEO of Georgia Foreign-Trade Zones, which administers FTZ #26, a service area that covers parts of 60-plus counties within 60 miles or 90 minutes drive from the Atlanta port of entry.