Foreign-Trade Zone still little understood after more than 10 years

Hank Hayes • Sep 10, 2007 at 12:00 AM

BLOUNTVILLE — More than a decade after going into business, the main challenge for the Tri-Cities Regional Airport’s foreign-trade zone operation seems to be the same — generating awareness.

“A lot of people don’t know how the FTZ works,” Sullivan County Mayor Steve Godsey said at the last TCRA Foreign-Trade Zone Committee meeting.

At the meeting, TCRA Trade Development Specialist Mark Canty fielded local leads from committee members and also briefed them on how the FTZ operation plans to work with regional economic development groups and get on the radar screens of national decision makers at upcoming trade shows.

On Oct. 18, 1994, the U.S. Department of Commerce Foreign-Trade Zones Board awarded TCRA the authority to establish, operate and maintain a foreign-trade zone at the airport and at more than a half-dozen FTZ locations around the region.

Since then, a never-ending education effort has ensued with business leaders, even when the FTZ operation was run by the former Global Trade Alliance before being turned back over to TCRA.

The selling points for FTZs remain the same — that foreign-trade zones allow importers to reduce, defer or eliminate their payments on U.S. Customs duties. FTZ users also reduce expenses on customs broker fees, merchandise processing fees and customs duties on products that are destroyed or scrapped. In addition, FTZ users benefit by skipping the customs entry process at overcrowded seaports and airports by shipping directly into their manufacturing or distribution facility, according to TCRA.

Canty said FTZ interest is “way up” but noted that interest and activity are two different matters.

“An FTZ can be beneficial and you may not even know it because companies keep you on the short list for relocation if you have an FTZ,” he explained. “If your community does not offer an FTZ, the company may strike you off the list immediately. They may not use it right away, but it could become part of their logistics process as their import strategy changes or as their supply chain evolves, ... it’s really an economic development component.”

TCRA’s FTZ operation is marketed in conjunction with its air cargo business, with the centerpiece of that business being the airport’s air cargo logistics center on the airfield’s south side.

Open land for aviation-related economic development and corporate hangars resides adjacent to the air cargo logistics center. The location was used to court a $50 million, 40-acre jet engine manufacturing facility to TCRA, but Burlington, N.C., was successful in that economic development effort.

Still, TCRA and economic development officials were encouraged by coming in a close second on winning the Honda Aero Inc. manufacturing facility.

“It helped us recognize what a great product we have in the region,” TCRA Executive Director Patrick Wilson said.

Distribution businesses are also being recruited to the airport’s south side. TCRA’s primary “catchment area” for air cargo extends outward to an approximate 100-mile radius of the airport — stretching into four states: Northeast Tennessee, Southwest Virginia, Western North Carolina and parts of Eastern Kentucky. A U.S. customs port is also at the air cargo logistics center.

For more, go to www.triflight.com.

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