Court looks at Foreign Trade Zones

ANAHUAC— Recently, commissioners met to discuss policies related to Foreign Trade Zones as interest continues to rise due to tariff concerns.

Chambers County Commissioners Court met on Tuesday, July 8, where Baytown-West Chambers County Economic Development Foundation President/CEO B. J. Simon explained what an FTZ is and how it works.

“There’s been an uptick in interest in foreign trade zone policies and foreign trade zone designations in the county, particularly given the tariff environment that has emerged under the current administration,” Simon said.

A FTZ is an area within the country that is legally considered to be outside of customs territory, allowing for duty-free imports that are paid later. FTZs are designed to attract foreign trade, benefiting the economy.

Goods enter the zone, and from there, storage, processing and manufacturing are permitted inside the zone.

Once it is exported, the owner can choose to pay tax on the finished product or the original products.

If the products are distributed domestically, the company won’t have to pay federal duties.

FTZs are often near ports and transportation hubs such as railways.

With four active FTZs, Chambers County’s position near the gulf coast and many railways provides a unique opportunity for the county to attract domestic production.

Those four zones are at the Cedar Port Industrial Park, AmeriPort Industrial Park and Chambers County Logistics Terminal Campus.

Simon explained the benefits of FTZs, including reducing inventory tax, encouraging domestic manufacturing and economic boosts.

Economic boosts include attracting investments, job creation, domestic production and drawing businesses in.

FTZs are governed by a federal program which reduces and occasionally takes away import tariffs for importers and exporters.

There are 294 of these zones within the U.S. and Texas has 35, the most of any state.

With Texas being an inventory tax state, some goods held in an FTZ qualify for reduced tax.

The zones within the county are all sponsored by FTZ No. 171.

In January 1991, the U.S. Foreign Trade Zones Board granted FTZ No. 171 to the Liberty County Economic Development Corporation, and Chambers County was later brought in.