Foreign-Trade Zones Spur Growth

The Port of Portland has sought to reorganize its Foreign-Trade Zone status.

Foreign-Trade Zones are secure areas, often located at or in proximity to ports, which are within United States borders but considered outside U.S. Customs and Border Protection (CBP) territory. This means that certain goods can be imported into the Zone without going through formal Customs entry procedures or paying import duties. Customs duties and excise taxes are due only at the time of transfer from the FTZ for U.S. consumption. If the merchandise never enters the U.S. commerce, then no duties or taxes are paid on those items.

In December 2012, the Port of Portland received authorization to seek approval from the U.S. Foreign-Trade Zones Board to reorganize the Port’s FTZ program under the Alternative Site Framework.  Under the current framework, businesses that want to participate must be drawn to a limited number of specific sites. Reorganizing under the Alternative Site Framework would extend the Port’s geographical “Service Area,” significantly streamlining administrative action and permitting many more businesses to enjoy the benefits of the FTZ.

The Port of Portland’s FTZ program is beneficial to both our region and global commerce in a number of ways. With Foreign Trade Zone Board approval, companies may assemble their products prior to import, opting to pay duties on either the individual components or the finished product, whichever rate is most profitable for the importer. Organizations may also use FTZs as a way to store merchandise indefinitely, thereby deferring duties prior to importation. Any scrap resulting from operations within an FTZ may be discarded, avoiding unnecessary taxation on unused materials. If components are re-exported, they are still considered “foreign,” and are not subject to U.S. duties.

Many organizations have benefited from participating in the FTZ program. Active users in Oregon include Columbia Sportswear, Epson Portland, Inc., and Pizza Blends.

By permitting businesses to defer, reduce, or in some cases eliminate duties, thereby facilitating more financial control over imported goods, FTZs help encourage business and spur our local economy.