Five counties in Georgia have been cleared to establish foreign-trade zones, sites with special U.S. customs regulations that help importers reduce costs and boost competitiveness.
The U.S. Foreign Trade Zone Board, a division of the Commerce Department, granted the designation to three counties near Macon – Bibb, Monroe and Twiggs – along with Troup and Fulton counties. The trade zones are part of a U.S. government program launched in the 1930s to help domestic manufacturers compete with cheaper imports in certain sectors.
Each state has a number of the zones, where companies can bring in raw materials, components or finished goods from overseas and store or re-export them without incurring duties.
Goods eventually sold in the U.S. face duties, but they are often reduced or deferred until the time of the sale, allowing companies to better manage cash flow.
Trade-zone status is granted by the Commerce Department after an inspection by U.S. Customs and Border Protection. Applications must show how the zone would benefit local companies by fostering a better cost environment for trade, said Julie Brown, president and CEO of Georgia Foreign Trade Zones Inc., which submits the bids for the bulk of new sites in Georgia.
“The local benefit is that the company can lower their costs, and in that community, they can keep jobs and hopefully increase jobs that could’ve possibly gone away,” said Ms. Brown. Her non-profit corporation was created in 1977 to administer U.S. Foreign Trade Zone #26, an umbrella covering most free-trade zone sites in Georgia.
Introducing the program to middle Georgia will help an area of the state that has been traditionally “unserved” by foreign-trade zone sites, she said.
Middle Georgia had been eyeing the status for at least five years, said Ralph Nix, executive director of the Middle Georgia Regional Commission, which oversees economic development in 11 counties.
“We wanted to make sure that we were able to offer … places that qualified so that we could compete more effectively on an international scale,” Mr. Nix said.
The organization worked with Georgia Foreign Trade Zones to achieve the designation, which will help existing companies and provide a selling point to attract new ones. The commission hopes to hold an event marketing the zones’ advantages before the end of the year, Mr. Nix said.
The commission has identified three industrial parks for the zones, which could become increasingly important as smaller communities embrace the role of global companies in economic development.
Mr. Nix cited the town of Roberta, Ga. The Crawford County city has only 12,000 people, but at least three international companies have set up operations there.
“We’ve seen growth in that area,” Mr. Nix said. “It’s been helpful certainly that the Georgia Department of Economic Development has opened offices in a number of foreign countries and is aggressively marketing the state internationally.”
Mr. Nix and Ms. Brown declined to mention specific companies that had requested the sites in the middle Georgia counties, but “I can say that we’ve got manufacturing and distribution companies that we are working with, and I hope to get that really nailed down,” said Ms. Brown of Georgia Foreign Trade Zones Inc.
She added that the auto industry has used the foreign-trade zone program for decades and that the Troup County site in western Georgia was granted with an eye toward auto parts manufacturers supplying the Kia Motors plant off Interstate 85 in West Point, she said.
The Korean automaker is in the process of applying for its plant to be designated as a foreign-trade subzone, Ms. Brown said.
Subzones are basically foreign-trade zones that an individual firm hosts at its own site. They are used when a company has manufacturing or warehousing operations that are too big for “general-purpose” zones, which must be within 60 or 90 minutes miles of a port of entry like the Port of Savannah or Hartsfield-Jackson Atlanta International Airport.
Just south of Atlanta surrounding Peachtree City‘s Falcon Field airport, Fayette County has had a 2,200-acre industrial park designated as a foreign-trade zone since the mid-1990s.
Matt Forshee, CEO of the Fayette County Development Authority, said few companies within the park make use of its status as a foreign-trade zone, but having it there gives the county an extra marketing tool.
“It certainly sets us apart when you’re trying to compare apples to apples, and you’ve got a nice red apple over here, but you’ve got a nice, shiny apple over there,” Mr. Forshee said. “It’s just one little extra arrow in our quiver or tool in our toolbox for economic development.”
The zones are particularly useful for companies that import products or components from countries that don’t have free-trade agreements with the U.S., he said.
Before it moved manufacturing operations to Mexico, Panasonic was using the Fayette County zone to store parts for car radios. The Japanese firm would keep the parts in a secondary warehouse, avoiding tariffs until assembling the radios, Mr. Forshee said.
Visit www.georgiaftz.com for more information.
The Pendleton Group is the presenting sponsor of Global Atlanta's Economic Development Channel. Subscribe here for monthly Economic Development newsletters.
