COMMERCIAL DEVELOPMENT DEPARTMENT. U.S. Foreign Trade Zone No. 39

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1 U.S. Foreign Trade Zone No. 39 1

2 U.S. Foreign Trade Zones

3 U.S. Foreign Trade Zones The Foreign-Trade Zones Act of 1934 Encourages employment and capital investment Flexible application of U.S. Customs rules for U.S. businesses involved in international trade Administered by Foreign-Trade Zones Board, under the U.S. Dept. of Commerce The FTZ Board: Gives privilege to FTZ Grantee to establish, operate, and maintain FTZs Approves applications for companies setting up FTZs Authorizes specific manufacturing activity allowed in FTZs FTZ activity is supervised by U.S. Customs and Border Protection

4 U.S. Foreign Trade Zones FTZ Grantee must operate zone as a public utility Provide uniform treatment under like conditions, with fair and reasonable charges Physically located within U.S., but FTZs are treated as outside U.S. Customs territory Enabling U.S. firms to successfully compete with foreign counterparts Foreign trade zones in U.S. known internationally as free trade zones, or free ports

5 U.S. Foreign Trade Zones Economic Benefits of FTZs No duty on imports until they leave FTZ for domestic destination No duty on items brought into FTZ and exported These items never enter Customs territory Manufacturing FTZs can elect lower duty rate component part or finished product No state and local personal property tax Imported inventory, or Domestic inventory held for export Other logistical and process savings

6 U.S. Foreign Trade Zones 2012 U.S. FTZs shipment value = $732 billion, up 14% over the prior year. Aerospace Equipment Agricultural Products Automotive Goods Computer Equipment Consumer Electronics Machinery/Equipment Petroleum Products Pharmaceutical Products Textiles/Footwear/Leather Source: U.S. Foreign-Trade Zones Board

7 U.S. Foreign Trade Zone No. 39

8 1979 grant of authority, FTZ No. 39 Serving business at the Port of Dallas/Fort Worth DFW s motivation for becoming grantee: More international trade, more passenger and cargo air traffic Leadership role in regional economic development Over $1.4 billion in merchandise received into DFW s FTZ in

9 DFW sponsors FTZs in three ways: On-Airport Pre-designated FTZ boundaries Throughout Metro Pre-designated geographical FTZ areas Company-specific Where companies are located throughout metro 9

10 On-Airport FTZ 2,400 acres/971 hectares on-airport Pre-designated as FTZ Companies can simply activate with Customs 45 buildings, 10 million sq. ft. of warehouse space is FTZ-designated New industrial development underway FTZ acreage can easily be moved to accommodate companies

11 On-Airport FTZ American Eurocopter CEVA International Daikin AC (Americas), Inc. Dallas Cowboys Merchandising, Ltd. DHL Global Forwarding Ergo Distribution, Inc. Hitachi High Technologies America Menzies Aviation Network Logistics NEC Corporation of America Panalpina, Inc. Valeo Compressor North America Xpedx (International Paper) 11

12 Off-Airport FTZ Sites DFW can sponsor FTZs: Numerous pre-designated geographical FTZ areas throughout the metro area; and At company-specific locations throughout the metro area 12

13 Off-Airport Pre-Designated FTZ Sites 5,143 acres/2,081 hectares throughout North Texas predesignated as FTZ Any company may locate on this land and simply activate with Customs Existing sites include: Southport (Southern Dallas) Meacham Airport (Fort Worth) Dallas Executive Airport Grayson County Railhead (Fort Worth) 13

14 Off-Airport Company-Specific FTZs If companies want FTZ status but cannot locate in a pre-designated area, DFW can sponsor company-specific FTZs DFW sponsors the following FTZs: GM Sanden Fossil Partners Zale Turbomeca U.S.A. Dal-Tile The Apparel Group Matrix Network Brighton Best International Lasko BMW 14

15 Off-Airport Company-Specific FTZs Currently assisting the following companies in establishing FTZs: 15

16 Off-Airport Company-Specific FTZs Alternative Site Framework ( ASF ) allows select FTZ Grantees expedited approval for company-specific FTZ designations within a Service Area Communities can agree to participate, forming the designated Service Area Easier, faster FTZ setup within Service Area DFW Service Area includes 6 counties, and working to add Hunt 5,284 square miles 8,502 square kilometers DFW can still sponsor FTZs outside Service Area under old rules

17 International Partnerships Dubai Free Trade Zone, UAE Farglory Free Trade Zone, Taiwan Incheon International Airport, South Korea OMA Monterrey International Airport, Mexico Shanghai Airport, PRC Brisbane Airport, Australia 17

18 Community Outreach Hosted FTZ Forum in January Very well attended Commercial real estate professionals Government economic development staff FTZ operators Others Staff Director of U.S. FTZ Board was key speaker Requests for FTZ information have spiked after event 18

19 FTZ Webpage Webpage dedicated to DFW FTZ Includes 10 commonly requested resources 19

20 U.S. Foreign Trade Zone No