Giant Foreign Trade Zone At Starting Gate
Written by Scott Blake on July 12, 2012
By Scott Blake
Port Miami officials want to create a giant foreign trade zone blanketing much of Greater Miami — including the seaport and Miami International Airport — allowing merchandise to be imported, handled, manufactured or reconfigured and exported without the intervention of US customs authorities.
The idea is to encourage foreign commerce by allowing companies that operate in the zones to defer, reduce or eliminate tariffs and taxes on goods. Only when the goods are moved to consumers within the US do they become subject to normal customs duties.
In a sense, commercial merchandise within foreign trade zones is treated like it is outside the US.
Port Miami, which applied for the zone in November on behalf of Miami-Dade County officials, expects a decision from federal officials next month, according to a summary of the plan provided by Port Miami.
A foreign trade zone "creates jobs and investment in the US through tax savings," the proposal states.
In deciding whether to approve a zone, however, federal authorities must weigh anticipated benefits against potential drawbacks.
"The concern is that foreign trade zones could be used by foreign companies to circumvent rules and regulations in the US," said Eugene Laney, vice president of international trade affairs for shipping company DHL in Washington, DC.
"There are a number of dangers," Mr. Laney added, "like a foreign trade zone could be used to flood low-cost goods into the US."
The proposed foreign trade zone would stretch from the north boundary of Miami-Dade County south through downtown Miami to Southwest Eighth St. The zone would span the entire width of the county from the Atlantic Ocean to the county’s west boundary.
The federal government is cautious about granting foreign trade zone requests because US authorities give up a certain degree of oversight of items moved in and out of the zones, Mr. Laney said.
If not administered properly, the zones can allow foreign companies to flood US markets with low-cost products and parts that could undercut domestic producers or that do not meet US standards, he added.
Some even have criticized the zones for being susceptible to money laundering and other illegal activities.
Proponents of the zones, however, maintain that they help US companies overcome competitive disadvantages stemming from US trade laws and regulations.
The goal is to stimulate business among importers, exporters, warehouse operators, manufacturers and third-party logistics providers.
US Customs and Border Patrol officials would manage the new foreign trade zone under the standard "audit-inspection" system.
That means customs oversight would be done through "compliance reviews," in which compliance is assured through audits and spot checks under a surety bond, rather than through on-site supervision by customs personnel.
"Despite the natural marriage of Miami’s international trading pattern with the benefits of [foreign trade zones], we are greatly under-represented in terms of [zone] sites and square footage," Port Miami’s proposal states.
Miami-Dade now has three foreign trade zones, two of which are active: FTZ No. 166 Homestead, granted to Vision Foreign Trade Zone Inc., and FTZ No. 32 Miami, granted to Greater Miami Foreign Trade Zone Inc., Omni International Complex. The latter zone is the Miami Free Zone, administered under authority of the Greater Miami Chamber of Commerce, though it is in Doral.
The inactive zone is FTZ No. 180 Miami-Wynwood, granted to Wynwood Community Economic Development Corp., according to Port Miami.To read the entire issue of Miami Today online, subscribe to e -Miami Today, an exact digital replica of the printed edition.