Foreign trade between North Carolina and the world is expected to increase, with the recent expansion of Foreign Trade Zone 214, and all that FTZ 214 promises across the 22 counties it includes in the southeastern part of the state.
That was the big topic of discussion Wednesday at the third annual Foreign Trade Promotion Conference
, held at Cape Fear Community College.
“There are new opportunities for all of us,” said John Hayes, executive director of the Foreign Trade Promotion Council (FTPC).
“Now we need to help businesses understand how to use this,” added Rick Catlin, chairman of the FTPC. “This offers a great benefit as it allows more companies more access to the tax advantages available, and it opens the world of import and export to local companies.”
A Foreign Trade Zone is like a “duty-free” zone for businesses. It’s a secure area in or adjacent to a U.S. Port of Entry, authorized by the federal government. Merchandise of every description may be held in the Foreign Trade Zone without being subject to customs duties or other added value taxes.
“FTZ 214 can be a catalyst
that leads to a rebirth of business opportunity here in southeastern North Carolina,” said N.C. Secretary of State Elaine Marshall in her remarks to the audience.
“In the past, many small and medium-sized businesses found it too difficult to navigate international trade. We have all heard those painful stories.”
The secretary also commented on how increased international trade requires a dose of diplomacy.
“We need to keep in mind that greater global trade requires greater global understanding and diplomacy. We cannot expect great results in one part of that equation, without similar results in the other parts of it,” Marshall said.
In Wilmington, business leaders are bullish on the future of global trade and its benefits for the local community.
“The three-year process to create Foreign Trade Zone 214 has been well worth the effort,” said Mitch Lamm, chairman of the Wilmington Chamber of Commerce board. “FTZ 214 effectively allows a business to create a trade zone around their location, rather than needing to be physically located in a pre-determined area of land. This ability to import and export duty free without having to relocate or create a new office space should help attract new business to the region and opens another avenue for existing businesses to expand their markets.”
“FTZs are growing in importance as the global economy changes,” added Scott Satterfield, CEO of Wilmington Business Development. “Cost savings resulting from FTZs, along with our labor force productivity and strong infrastructure, make manufacturing and assembly operations here competitive at a worldwide level. Add to that the rise of advanced industrial technologies and I believe FTZs fit neatly into the re-shoring movement. Manufacturing may never be as job-rich as it once was, but the jobs being created in the sector require more skills and offer better pay.”
It should also open the door for more of the smaller businesses in the region who are interested in developing trade on an international level.
FTZ is expected to be a boom for the port and airport here as well.
“We expect the expanded FTZ to be another tool in our toolkit as we continue to promote the at-port business model in and around the economic engines that are the Port of Wilmington,” said N.C. State Ports Authority spokesman Cliff Pyron.
“For businesses involved in international trade, the expanded FTZ offers tremendous economic benefits and allows you to be a stronger competitor. Most notably, customs duties and excise taxes are not applicable on many shipments. The reduction of these costs, in turn, saves money on cargo insurance. In practice, shipments through this expanded FTZ are substantially faster and more predictable than those without FTZ control,” Pyron explained.
The FTPC and the N.C. DOT Foreign Trade Department had worked for several years with the U.S. Department of Commerce to grow international business for the eastern reaches of the state, through an expanded and more flexible FTZ.
The FTPC conference runs through Thursday and includes discussions with global trade experts from across the U.S. and the world. The Thursday session
is designed for educating business owners and those interested in global trade through one-on-one sessions and workshops.