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Streamlining the Foreign Trade Zone Program

Preston Herold
Preston Herold heads AllianceFlorida, a magnet site for the new FTZ designation in northeast Florida.

"We are big believers in the incentive, as it is designed to keep jobs and capital investment in the United States versus moving abroad."

— Preston Herold

[Photo: Ryan Ketterman]

The federal government's Foreign Trade Zone program is a sweet incentive for any business that imports, whether it brings in merchandise for sale or uses foreign components in manufacturing. The program allows certain goods to bypass formal customs-entry procedures and reduce or avoid import duties. But some companies and communities have soured on the FTZ process because, they say, it's cumbersome, taking an average nine months for a business to get approved.

"We got a lot of feedback that the Foreign Trade Zone takes too long and it's difficult to get involved," says Deborah Lofberg, director of marketing services and FTZ at the Jacksonville Port Authority. "We weren't getting very far with it very fast."

FTZ Benefits

Duty deferral: The business pays custom duties when merchandize leaves the FTZ, rather than first arrival in the U.S.

Duty reduction: A company that buys foreign components for its products can choose to pay whichever duty is lower — the duty on the components or the duty on the finished product.

Duty elimination: The government eliminates the duty on foreign merchandise that comes into an FTZ and then gets exported abroad.

Source: National Association of Foreign Trade Zones

That's about to change in northeast Florida now that most of the region has been designated one big Foreign Trade Zone. JaxPort, which previously administered an FTZ that covered 1,400 acres at its terminals, worked with the U.S. Department of Commerce to create the new FTZ for its entire customs district, which includes Duval, Nassau, St. Johns, Baker, Bradford, Clay, Union, Columbia and a slice of Putnam County. The new designation means any business in the eight counties can qualify for FTZ status, often within about 30 days. The regional zone also will feature one "magnet" site in each county, where a developer offers special customs services to import-export companies.

AllianceFlorida at Cecil Commerce Center has been named magnet site for Duval. Developer Hillwood Investment Properties already offered the incentive at its AllianceTexas and AllianceCalifornia projects; the former has become the top FTZ in the United States in the value of foreign goods.

The northeast Florida FTZ is the first of its kind to win approval in Florida and 31st in the nation, according to the Commerce Department.

In Columbia County, JaxPort is working with Plum Creek Timber to make its inland port at the crossroads of I-75 and I-10 another magnet. The designation is hoped to put Lake City "on the radar screen for international manufacturing and distribution end-users who otherwise might not have considered this area," says Plum Creek's Todd Powell.

"It's all about getting these site selectors to choose north Florida," says Lofberg. "I'm convinced that now it's just a matter of time."