Complete the 2016 ACE Trade User Satisfaction Survey

The U.S. Customs and Border Protection (CBP) has issued CSMS# 16-000757, announcing the availability of the 2016 ACE Trade User Satisfaction Survey. This request for comments is an opportunity to express the FTZ Community’s issues and concerns about ACE and the PGAs. CBP strongly encourages all Importers, Exporters, Brokers, Software Developers, Carriers, and other trade community users of the ACE System to take this short survey as soon as possible. A large response will ensure that there is greater statistical validity to the results. Deadline: This survey will close at midnight on Monday, September 19.

Erik Autor Appointed President of the NAFTZ

FOR IMMEDIATE RELEASE
August 18, 2016

Erik Autor Appointed President of The National Association of Foreign-Trade Zones

Washington, D.C. – Erik Autor, an experienced authority on international trade, customs and transportation issues, has been has been appointed president of The National Association of Foreign-Trade Zones. NAFTZ Chairman Jose Quiñonez, FTZ manager for the City of El Paso, Texas, announced the appointment.

“Erik Autor has an impressive understanding of the issues important to NAFTZ and significant experience as a senior trade association executive,” said Chairman Quiñonez. “He has the knowledge, leadership skills and enthusiasm necessary to guide NAFTZ into the future, and we are very pleased to welcome him to our team.”

Autor joins NAFTZ after fifteen years as vice president and international trade counsel at the National Retail Federation and three years as an international business consultant. He succeeds Daniel Griswold, who served as NAFTZ president for four years.

“I am very excited to work with NAFTZ’s Board of Directors, membership, and expert staff,” said Autor. “In a period of significant economic and political uncertainty, we must work diligently to ensure the foreign-trade zones program retains its ability to support U.S. economic competitiveness, a strong manufacturing base, and global supply and value chains.”

Autor began his career as a law clerk at the U.S. Court of International Trade in New York after receiving his undergraduate and graduate degrees from UCLA and the London School of Economics, and joint law degrees from Duke University. He then joined the international trade group at Skadden Arps Slate Meagher & Flom in Washington, DC, and served six years as international trade counsel to the U.S. Senate Committee on Finance before joining the National Retail Federation.

About the National Association of Foreign-Trade Zones
The National Association of Foreign-Trade Zones (NAFTZ) is the collective voice of the U.S. Foreign-Trade Zones Program. The NAFTZ is the program’s principal educator and the leader in demonstrating the program’s value and role in the changing environment of international trade. NAFTZ is instrumental in supporting economic development objectives and the global competitiveness of its public and private members by providing a forum for disseminating relevant information and advocacy support on international trade issues. For more information, visit NAFTZ’s website, Twitter, and Facebook pages.

For More Information Contact:
Jarmila Zapata
Manager of Communications & Member Services
202-331-1950, ext. 224
jzapata@naftz.org

 

The New Miscellaneous Tariff Legislation

 

The New Miscellaneous Tariff Legislation: Does It Change the Authority of the  Foreign-Trade Zones Board?
By Lewis Leibowitz of the Law Office of Lewis E. Leibowitz

On May 20, President Obama signed into law the American Manufacturing Competitiveness Act of 2016 (H.R. 4923). This law reformed the process by which “miscellaneous tariff bills” become law. The previous system of congressional consideration of these bills had become unworkable. The new law provides for a petition process to the International Trade Commission (ITC), followed by congressional consideration and passage.

The common form of miscellaneous tariff legislation is duty suspension or reduction. Typically, a US manufacturer requires inputs that cannot be sourced domestically and therefore must import that component or raw material. If the US duty on that import is high, US costs increase and damage the competitiveness of US manufacturers with imports of the finished good. This is especially true if the US tariff on the finished good is lower than the tariff on the input.

In trade parlance, this relationship between tariffs on raw materials and finished goods is known as an “inverted tariff.” One of the principal advantages of foreign trade zones is to relieve an inverted tariff. Thus, the question arises whether the new administrative procedure for miscellaneous tariff bills was intended to replace or limit FTZ benefits when it comes to relieving manufacturers from inverted tariffs.

When questions such as this arise, a court or decision-maker looks at the “intent of Congress.” The first step is to review the language of the statute to determine if Congress intended to limit or eliminate any alternative method of achieving the same result. If the statutory language is not clear, then a court will review the legislative history (committee reports, floor debate, hearing transcripts) to determine if those additional sources shed light on the issue.

In general, any new law that is intended to affect the operation of other laws and programs should clearly say so. Many statutes have language such as “notwithstanding any other provision of law” or similar language. Where this language is not present, any court would be skeptical of claims that a new law intends to preempt or limit prior law that it did not specifically address. In short, silence in a new law generally indicates that prior law was not intended to be limited, unless there is no other way to interpret the new law.

In the new MTB legislation, there is no language that specifically mentions foreign trade zones. While the Foreign Trade Zones Act permits relief from inverted tariffs for US manufacturers, it has long been true that there are other ways to accomplish this end. Most obviously, Congress can change the tariff on any product by statute; that has always been an option.

MTB legislation was first enacted in the early 1980s to combine many bills reducing or eliminating duties for a temporary period. But Congress has always had the authority to change tariffs at any time, and has regularly used this power since 1789.

The legislative machinery for MTB legislation broke down in the early 2000s. Republicans claimed that duty suspension bills were essentially “earmarks” for specific companies (the bills often affected only a few companies that needed the components). Frequently, when bills came to the floor, especially in the Senate, holds were placed to exert pressure on particular issues. After several years of this, the process froze solid. In 2010, when Democrats were in control on Congress, MTB legislation passed and was signed by President Obama. But the bill expired at the end of 2012, and Republicans refused to continue the process.

The new MTB legislation has a procedure that avoids the “earmark” controversy and establishes a new “petition” process before the ITC. The new process will begin not later than October 16, 2016.

MTB legislation is limited to a form of “limited tariff relief.” The ITC accepts and evaluates petitions for “limited tariff relief” submitted within 60 days of the notice initiating the process. The first period for petitions will begin on or before October 16 of this year. The ITC will review petitions and report to the relevant House and Senate Committees on which petitions meet or fail to meet several criteria, including the following: (1) relief may last up to three years (subject to renewal in a subsequent bill); (2) the loss of revenue to the federal treasury is less than $500,000 per year; and (3) if any US entity objects to the bill because it claims to manufacture a like or directly competitive article.

It is clear that inverted tariffs extend to situations not covered by the MTB reform bill. For example, if a major manufacturing investment is on the table, a three-year tariff break on a single component may not be sufficient to secure that investment in the US. In addition, relief from inverted tariffs may result in a revenue reduction of more than $500,000. Finally, an objection may result in loss of a tiny fraction of the jobs that would be created if the relief from inverted tariffs were provided. In all these cases, the MTB solution would not be available.

Does this mean that Congress intended to strip the Foreign Trade Zones Board of the authority to encourage private investment in major production facilities in the US? There is no evidence that it did. In fact, the legislation requires the ITC to issue a report within one year after the passage of any MTB legislation, including:

“recommendations with respect to those domestic industry sectors or specific domestic industries that might benefit from permanent duty suspensions and reductions, either through a unilateral action of the United States or through negotiations for reciprocal tariff agreements, with a particular focus on inequities created by tariff inversions.” P.L. 114-___ section 4.

While the legislation specifically mentions permanent duty reduction legislation or international trade negotiations, there is nothing that excludes other alternatives. FTZ relief from inverted tariffs is clearly permitted. The landmark court decision Armco Steel Corp. v. Stans held that relief from inverted tariffs is a tool the FTZ Board may lawfully wield, and nothing in the MTB legislation changes that.

The new MTB legislation clearly accepts as true the argument that inverted tariffs cost American jobs. The ITC report requirement proves as much. Since duty suspension bills on all products expired at the end of 2012, US manufacturers have paid over $700 million in US duties—money they could have invested in new equipment and new employees.

FTZs are a different way, supported by congressional authority, to solve inverted tariff problems. But MTBs can help manufacturers when FTZs cannot. For example, a manufacturer paying US duties on a product that is not made in the United States may produce a good that is dutiable. Using an FTZ to eliminate the inverted tariff may actually be more costly than a duty suspension bill, because the duty rate on the finished product may be more than zero.

In contrast, FTZ benefits can be greater than duty suspension in certain cases. For example, foreign trade zones can equalize the tariff costs for US manufacturers and their foreign competitors. Even in cases where the inputs are produced in the United States, an FTZ may create or save many more jobs than could possibly be risked by allowing FTZ status to reduce the tariffs on imported inputs. The FTZ Board must evaluate these issues under established public interest principles.

Congress clearly knows that rigid adherence to tariffs that can destroy American manufacturing jobs does not make sense. The MTB legislation emphatically makes that point. In the MTB legislation, Congress validated the principal argument for eliminating inverted tariffs, a power that the FTZ Board has possessed since 1950. Just as clearly, Congress did not intend to alter the FTZ program’s authority to address the inverted tariff problem. If Congress wanted to limit the FTZ program,they could have said as much.

About the Author

LewisLeibowitzLewis Leibowitz
Lewis Leibowitz is an Attorney at the Law Office of Lewis E. Leibowitz

Job Opening: President of NAFTZ in Washington, DC

The National Association of Foreign-Trade Zones (NAFTZ) is seeking a new President. The organization is now looking for a President to report to the Board of Directors and manage the organization’s strategic, programmatic, financial, and managerial operations. The NAFTZ is working with the Executive search firm Pisani Recruiting, Inc. For details regarding the position, please refer to the job listing.

Congress Looks to Revive MTB Process; FTZs Provide Alternative

According to a March 30 report from Politico, a bill may soon be introduced in Congress that will reform the Miscellaneous Tariff Bill (MTB) process. The bill is expected to come from House Ways & Means Committee Chairman Kevin Brady and would allow the suspension of duties on certain imported components important to U.S. industry. According to Politico, “The Ways and Means proposal attempts to reconcile the MTB with earmark rules by having businesses petition the U.S. International Trade Commission, rather than Congress, to have certain tariff waivers included in the MTB package, according to a two-page document circulated internally by Brady’s office. The ITC would then issue recommendations in a public report to Congress, which could only pick waivers endorsed by the agency.” With the expiration of the previous MTB in 2012, the U.S. Foreign-Trade Zones program continues to offer long-term relief from damaging tariffs that discourage investment, manufacturing, and job creation in the United States. Read NAFTZ’s article on the MTB process.

Appropriations Bill Mandates Survey of Grantee Uniform Treatment

A $1.14 trillion omnibus spending bill that was approved by Congress and signed into law in December contains a provision that will impact FTZ Board operations and individual FTZ grantees.

Along with other requirements, the appropriations bill language directs the FTZ Board to survey all current and past business models used by FTZ grantees and to determine the impact that the Part 400.43 Uniform Treatment provision has or may have on the various business models. The language in the spending bill withholds $5 million in funding from the U.S. Commerce Department’s International Trade Administration until 15 days after the FTZ Board delivers its report to the House and Senate Committees on Appropriations. Here is the full text of the provision:

Foreign Trade Zones (FTZ). Of the amounts provided for ITA [the International Trade Administration, U.S. Department of Commerce] in this Act, $5,000,000 shall not be available until 15 days following the delivery of a report and certification from the FTZ Board to the Committees on Appropriations. The report shall include: (1) a survey of all current and past business models utilized by FTZ grantees for zone management and administration activities; (2) specific impacts 15 CFR 400.43 has or may have on these various business models; (3) the specific activities and components of current and past business models that are allowed under partial and full waivers granted by the FTZ Board, as of the date of enactment of this Act pursuant to this regulation; and ( 4) the specific steps the FTZ Board will take to ensure that all FTZ grantees are in compliance with the regulation. The FTZ Board shall simultaneously provide a certified list of the specific business practices and business models that a FTZ grantee would need to achieve in order to qualify for a waiver under the regulation.

The language was placed in the bill by Sen. Richard Shelby (R-AL). NAFTZ was not involved in the initiation, writing or enactment of this provision, nor did the association have knowledge of the language until two days prior to the final vote on the omnibus bill.

The NAFTZ Board of Directors, staff, and advisors are currently studying this provision to determine its potential impact on the FTZ program and NAFTZ members. The provision will be a subject of discussion at the NAFTZ Legislative & Regulatory Seminar in Washington D.C. on February 9, 2016, along with ACE implementation, scope of authority, and other issues important to the FTZ community.

Senate Passes Customs Authorization, HR 644

This has been an extraordinary week for NAFTZ’s legislative and regulatory agenda. As the association hoped and expected, the Senate passed the Customs Authorization conference report on Thursday, which was the last hurdle to enactment before the president signs the bill into law, which is expected to happen shortly. This culminates years of effort by NAFTZ and its members to advance Customs modernization and the full funding of the Automated Commercial Environment. NAFTZ worked closely with other pro-trade organizations to achieve this goal, including the joint industry letter we signed to congressional leaders in December urging its swift passage.

NHTSA to Require New Data Filing in ACE by February 28 Deadline


This article was written by members of the ACE Task Force and was published in the January 2016 Zones Report.

The National Highway Traffic Safety Administration (NHTSA) is an agency within the U.S. Department of Transportation responsible for implementing and enforcing the National Traffic and Motor Vehicle Safety Act of 1966 (the Vehicle Safety Act) and issuing the Federal Motor Vehicle Safety Standards (FMVSS).

A motor vehicle is defined as a vehicle that is driven or drawn by mechanical power and manufactured primarily for use on public streets, roads, and highways (i.e. passenger cars, multipurpose passenger vehicles, trucks, buses, motorcycles, trailers, and low-speed vehicles). Vehicles that are primarily manufactured for off-road use, such as ATVs, dirt bikes, race cars, etc., are not subject to NHTSA regulations and reporting requirements.

In addition to motor vehicles, there are 13 groups of motor vehicle equipment items subject to NHTSA regulation, which include tires, rims, brake hoses, brake fluid, seat belt assemblies, lamps, reflective devices, and associated equipment, glazing (automotive glass and plastics), motorcycle helmets, child restraint systems (child safety seats), platform lift systems for the mobility impaired, rear impact guards for trailers, triangular reflective warning devices, and compressed natural gas containers.

The Vehicle Safety Act requires fabricating manufacturers to certify that motor vehicles and regulated items of motor vehicle equipment they produce for sale in the United States comply with all applicable FMVSS. Historically for motor vehicles and motor vehicle equipment items this declaration has been made at the time of entry (3461) primarily via the paper HS-7 form. However, as one of the three initial Partner Government Agencies (PGAs) participating in the electronic data filing in ACE, NHTSA has developed specifications to automate collection of the HS-7 data elements as well as introduced additional data filing requirements that have not been previously required or collected.

One of the new data filing requirements is that of the Fabricating Manufacturer Party (FMP). To ensure compliance with FMVAA regulations and to exercise its regulatory authority, NHTSA is requiring the make of a motor vehicle and the fabricating manufacturer and brand name, where applicable, for the 13 equipment items that are subject to the FMVSS be identified. While NHTSA has long been permitted by statute to collect FMP information, it was never required on the HS-7 form and the policy shift to collect FMP information has raised concern among automakers operating in an FTZ regarding the quality of data that would be reported because NHTSA will lose visibility to regulated imported components that are admitted in NPF status and subsequently manufactured into a motor vehicle under zone procedures.

Some automakers will be in a position to meet the February 28, 2016, deadline for filing FMP information for the motor vehicle equipment items; however, many others need additional time to obtain the necessary information from parent companies and/or to implement IT solutions designed to transmit the data to CBP or to Customs brokers for filing with CBP.

For those automakers who are not in a position to meet the established February 28, 2016, deadline, NHTSA has provided a process for a temporary alternative to reporting the actual required FMP data for the motor vehicle equipment items that are covered by the safety standards which are also flagged by the system to require missing data until IT solutions can be implemented. This alternative, which comes in the form of a waiver, is available to automakers that have C-TPAT approval from CBP, and if approved, allows the automaker to enter the automaker’s name in lieu of the actual FMP for the Fabricating Manufacturer data element only. This does not allow for the waiver of all PGA data elements for NHTSA at the time of entry summary.

To request a waiver, the following steps should be completed:

1. Send a formal request to NHTSA at NHTSA.ACE@dot.gov, with the subject line “Fabricating Manufacturer Temporary Waiver Request”
2. Include the following information in the body of the email:

  • State that the automaker is C-TPAT approved by CBP;
  • Provide an estimate of the date on which the automaker anticipates that their IT solution will be completed;
  • State that the automaker will provide monthly updates by email regarding its progress in implementing the IT solution; and
  • Identify by name, email address, and telephone number, the automaker’s representative(s) who is/are responsible for the waiver request and for monthly updates to NHTSA.

NHTSA will review the request and if approved grant the Temporary Waiver to the requesting automaker via email. The temporary waiver will remain in effect as long as the automaker submits via email timely monthly updates, which must include the following information:

1. Specific progress made in the previous 30-day period; and
2. An estimate of the date on which the automaker anticipates that its IT solution will be
completed.

In addition to automating the collection of data elements and introducing additional data reporting requirements, NHTSA announced in December 2015 that in conjunction with the mandatory transition to filing all entries in ACE, the point of making the required declarations would shift from the entry to the entry summary (7501) for expedited entries and Foreign-Trade Zone (FTZ) type 06 entries. This means that no later than February 28, 2016, importers should be electronically filing NHTSA data in ACE at the time of entry summary for these entry types.

While this change is viewed positively by the FTZ automotive community, it carries with it an additional reporting burden that did not previously exist and which will significantly increase the amount of data collection and submission on the entry summary. As an additional modification, NHTSA is requiring the reporting to be made by the automakers at the VIN level instead of the Model level as is current practice.

All other entry types, besides the 06 weekly and expedited entries, that have merchandise subject to NHTSA regulations are required to include the data electronically at the time of entry. With 222 HTS codes impacted, we strongly encourage you to review the NHTSA requirements and address any gaps that may exist which would hinder the timely filing of the necessary information.

Following are some useful resources available for your reference:

Finally, the NAFTZ ACE/PGA Working Group is requesting that any members with NHTSA-controlled commodities in their zone provide feedback on the requirement of reporting on the entry summary. In particular, we need to hear from both auto manufacturing zones as well as zones that admit and then ship vehicles into commerce to determine if, upon reviewing the data elements required by NHTSA in the ACE PGA message set, FTZ filers have determined they will have those elements available for reporting on all inventory (new and inventory admitted to the zone prior to this requirement) for accurate 7501 reporting.

As always, please contact the NAFTZ ACE Task Force at ACE@NAFTZ.org if you have any questions or comments.

NAFTZ Answers ACE Implementation Questions

One of the most urgent matters facing the FTZ community today is preparing for the implementation of the Automated Commercial Environment (ACE) in 2016. To help our members get ready for the new Customs automation system, the NAFTZ hosted an informative webinar on Tuesday of this week, “Are You Ready for 06 Entry Filing in ACE?,” which provided participants an opportunity to ask detailed questions about how to best prepare for the transformation. To supplement answers given during the webinar, the NAFTZ Automation Committee and ACE Task Force leaders have prepared the following Q&A for our members’ benefit.

View the Q&A as a pdf.

1. Is the CF3461-06 going directly into ACE now? How does that work?

Filing of CF3461-06 is available in ACE and in ACS at this time. In order to know if yours are being filed in ACE currently, you must check you software if self-filing or ask your broker if you are using one to file to know to which CBP system your data is currently being transmitted.

2. Do FTZ entries now qualify for RLF processing with ACE?

Yes, RLF is available for 06 FTZ entries that are certified from summary. FTZ 06 weekly entries are not eligible for RLF.

3. Please confirm that changes to the 3461/Cargo Release outlined in the webcast apply to Type 01 consumption entries as well as Type 06 FTZ entries.

The Cargo Release CATAIR covers all entry types, so you have to read it carefully to understand what requirements are based on the entry type being filed. For example, name and address of the entities is required on all entry types, where status code is only required on a Type 06 entry. Here is a link to the ACE Cargo Release CATAIR.

4. Do we have any information on changes to the e214 yet?

No, the CATAIR for FTZ admissions has not yet been published.

5. Is “Privileged Date” required for all PF status HTSs or only for those HTSs that have expired and a new HTS code is current?

The “Privileged Date” and “Current HTS Number” are only required on HTS numbers that have expired and were admitted to the zone in PF status.

6. Is the 06 entry filing in ACE for weekly estimated withdrawal designed to calculate 10th day entry summary due date based on zone week dates rather than initial release date?

The elected entry date will be given as the release date, provided that there are no holds or reviews put on the entry by CBP or a PGA. So the new entry date does not have an impact on the release date process.

7. In ACE, Line Item Quantity is required on the Entry Summary. To what quantity is CBP referring?

The “FTZ Line Item Quantity” refers to the quantity the zone uses to track the good. It would be found in your ERP or WMS system, or where you track your individual line item shipment quantities.

8. Where is Company unit of measure determined?

There is no means in the current CATAIR to report a unit of measure for the “FTZ Line Item Quantity” field on the entry (3461).

9. When will reporting PGA data electronically become mandatory?

Electronic filing in ACE will be mandatory for the following agencies as of Feb 28, 2016: FDA, NHTSA, and APHIS (Lacey) data. ACE must be used for filing AMS, APHIS Core, ATF, CDC, DCMA, DDTC, DEA E&C, EPA, FSIS, FWS (contingent on FWS having its regulatory revisions in place by the July 2016 publication of the CBP Final Rule eliminating hybrid filings), NMFS and TTB data in July 2016.

10. Please clarify when PGA data is to be submitted to ACE: when reporting Cargo Release, Entry Summary or both?

PGA will be reported on Cargo Release for the 15 agencies that have provided guidance.

11. How are PGA’s handling weekly estimates since the PGA data was not designed for such a filing?

At this time, we do not have detailed requirements from PGA’s regarding weekly estimate filing.

12. Why isn’t Fish and Wildlife included on the PGA list presented?

Fish and Wildlife have not yet published their Implementation Guide and have not yet indicated when they will be going live in ACE. The 15 PGAs published in the presentation are the ones that have given instructions and timelines for ACE roll out. There are 32 more PGA’s that still have to formally publish their guidelines. Find out more about PGA’s and the agency requirements by selecting the PGA tab.

13. Is there still going to be the option to report “FDA not required” on an entry?

Yes, there will still be an option to disclaim a PGA if the HTS flagged with the option. Some HTS numbers will require additional data just as is reported currently in ACS.

14. What is the Entity Role? What about the ID type?

Entity Role is the role a person or a company play in your supply chain. Examples of an entity include: Supplier, Manufacturer, and Seller. View a complete list of entity roles that can be found on page 252.

15. If our zone week ends on a date other than Feb 28, 2016, will we need to file two times within the zone week that spans that date?

You can start ACE entry filing at any point between now and February 28, 2016. Any entry that has been started in ACS before February 28, will need to be closed with an entry summary before the 28th when ACS is no longer available.

16: How will the “W” (Weekly Entry indicator) work for Supplemental Estimates/Entries?

There really is no change from the existing protocols in place today with ACS filing when it comes to the filing of a supplemental Weekly Entry. Let’s say that your zone week starts on Monday. You have filed your Weekly Entry (#1). It was authorized on the preceding Friday. If by, say, Wednesday you find that you need to file an additional Weekly Entry to cover your expected activity during your Zone Week, you would indeed file the second type 06 cargo release [aka Weekly Entry #2], marking it with the “W” (Weekly Entry indicator), and declaring the filing date (of Weekly Entry #2) as the elected entry date. For the purpose of this example scenario we will presume that Weekly Entry #2 is CBP-authorized the same day as the filing. Upon authorization of Weekly Entry #2 the FTZ Operator could begin to move authorized merchandise into the Commerce. Even though technically Weekly Entry would provide 7 days of removal activity from the FTZ from that Wednesday filing date, the Operator should operationally treat it as authorization for removal within the FTZ’s established Zone Week. Further, even though technically the entry summary for Week Entry #2 would not be due for a few days after the entry summary for Weekly Entry #1 is due, the Importer of Record should make sure that it is filed in line with the authorization/release date of Weekly Entry #1.

17. Who at NAFTZ should I contact regarding programming questions?

The NAFTZ ACE Task Force can assist with general questions regarding ACE preparedness and how to find published requirements. Specific questions regarding how to program to meet your specific situation should be posed to your software and service providers.

18. How can I submit a question to the ACE Task Force?

Questions about ACE can be sent to ACE@naftz.org

Exports from Foreign-Trade Zones Hit Record High in 2014

August 9, 2015

WASHINGTON — The value of exports from America’s Foreign-Trade Zones (FTZs) increased by 24.8 percent in 2014, to a record-high $99.2 billion in merchandise exported, according to figures released by the U.S. Foreign-Trade Zones Board in its recent Annual Report to Congress. The 2014 export figure also represents a threefold growth of FTZ exports in the five years since 2009.

FTZ employment also set a new record in 2014, with 420,000 jobs reported, representing a 7.7 percent increase over 2013 – far outpacing the overall U.S. employment growth of 1.9 percent.

“The FTZ Board’s latest report confirms that the program continues to be a vital component of America’s trade policy,” said Daniel Griswold, President of the National Association of Foreign-Trade Zones. “The competitive advantage for companies operating in an FTZ has enabled them to boost their exports and employment to record levels, continuing their strong contribution to America’s economic recovery.”

Foreign-status inputs to FTZs totaled $288.3 billion in 2014, accounting for 12.1 percent of all U.S. goods imports. FTZ imports have tripled as a share of U.S. imports over the past two decades.

Imported oil continues to decline in relative importance in FTZ activity. In 2014, petroleum accounted for 51 percent of FTZ imports, the lowest share since 1996. Other, non-oil FTZ imports, such as industrial components and consumer goods, reached a record 5.9 percent of total U.S. imports in 2014.

“Foreign-trade zones continue to be hubs of manufacturing activity where domestic and foreign-sourced inputs are combined by American workers on U.S. soil to produce value-added final products for export and domestic consumption,” said Daniel Griswold. “Key U.S. industries depend on the FTZ program to remain competitive. But we can do even better. U.S. Customs should take every step to fully integrate FTZs into the Automated Commercial Environment as soon as possible to ensure that U.S. FTZ manufacturing operations can take full advantage of global supply chains.”

There were 179 active FTZs during 2014, with a total of 311 active production operations; 2,700 firms used FTZs during the year. The FTZ Board processed 57 applications for new or expanded production authority in 2014, and reorganized 18 zones under the alternative site framework (ASF).

The complete report can be downloaded at:
http://enforcement.trade.gov/ftzpage/annualreport/ar-2014.pdf.

The National Association of Foreign-Trade Zones is a trade association of more than 600 members representing public and private organizations involved in the foreign-trade zones program. NAFTZ is the primary voice of communities and industries that utilize the FTZ program, including zone grantees, operators and users.

FOR MORE INFORMATION:

National Association of Foreign-Trade Zones
1001 Connecticut Ave. NW, Suite 350, Washington, DC 20036

Jarmila Zapata, NAFTZ
202-331-1950 jzapata@naftz.org

Brian Hannigan, Smith Dawson & Andrews
202-835-0740 brianh@sda-inc.com

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