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Front Page » Business & Finance » Miami International Airport works to set up foreign trade zone

Miami International Airport works to set up foreign trade zone

Written by on April 19, 2016
Miami International Airport works to set up foreign trade zone

To attract more diverse business opportunities, Miami International Airport officials are working to establish a foreign trade zone site within the airport.

“We’re going to have Miami International Airport declared a foreign trade zone because if you can ship through [the airport], why can’t you manufacture [at the airport] and continue shipping?” Emilio González, Miami-Dade Aviation Department director and CEO, told Miami Today.

With a projected launch in early 2017, a zone has the potential to create 1,500 jobs at the airport.

New opportunities the zone generates will create synergies with partners, increase trade, enhance cargo air service and diversify the airport’s revenue stream, Mr. González said.

Foreign trade zones appeal to businesses because the sites allow goods to be unloaded, manufactured, reassembled, tested, sampled, processed, repacked and re-exported without the intervention of US customs authorities.

Foreign trade zone users pay no duties on re-exports. Customs duties and federal excise taxes are deferred on imports. And duties are eliminated on waste, scrap and rejected or defective parts. By reducing costs, businesses can become more globally competitive.

“Quite a lot of it is storage. If you’re a foreign trade zone, rather than the airport serving as a transshipment point… you could manufacture,” Mr. González said.

Foreign and domestic merchandise handled within a foreign trade zone is considered to be outside the country because, typically, goods are only subjected to customs duties when they are being moved to consumers inside the US.

“Our profit would come from leasing out the airport space,” Mr. González said.

Today the airport has 424,046 square feet available for lease – 248,223 square feet of warehousing and 175,823 of offices. The foreign trade zone is expected to generate $7 million to $8 million a year in lease revenue for the airport.

“We have the capacity for this and we are already talking to people in Washington about what we need to do to step through hoops,” Mr. González said.

Potential site users in the trade zone include auto parts, electronics, textiles, footwear, perishables, metals, minerals, pharmaceuticals, avionics and machinery equipment companies.

The process in having the airport recognized as a foreign trade zone is comparable in difficulty to becoming a pharmaceutical hub, Mr. González said, referring to the airport being declared the first pharmaceutical hub in the US late last year.

“The accrediting agency for being a pharma hub is the International Air Transport Association, but as far as becoming a foreign trade zone, those will all be federal agencies,” he said.

Foreign trade zones are approved in part by US Customs and Border Protection. About 250 general-purpose zones and over 500 subzones are approved in all 50 states and Puerto Rico, according to the Foreign-Trade Zones Board. Miami-Dade is home to four foreign trade zones, including one at PortMiami.

“There is a process” to get a zone designation, Mr González said. “It’s never an easy one, but it is a process.”

One Response to Miami International Airport works to set up foreign trade zone

  1. DC Copeland

    April 20, 2016 at 11:12 am

    How long has MIA been around? I’m surprised no one came up with this idea before. It’s a great idea but it’s embarrassing no one thought of it sooner.