- New designation expands possibilities for Shawnee - 01-12-2013
- U.S. Foreign-Trade Zones
Nearly $500 Billion in Economic Activity - 6-12-2008
- New Opportunities in Newest
Ada & Guthrie,
Foreign-Trades Zones - 10-17-2007
- The Big Picture, The National
of the Foreign-Trade Zones Program - 12-31-2005
- New participants into Foreign Trade Zone
106 - 1-5-2005
- Recruiting the Big
Ones By Melissa Davis - 11-30-1998
New participants into Foreign Trade Zone
106 by Brian Brus
Appeared in the The Journal Record
The people Matthew Weaver talks to want to know why it took
so long to hear her pitch. "They're asking me, 'Why haven't
I heard about this before? This is a no-brainer,'" Perri
said. "Who wouldn't want an opportunity to save that
kind of money?"
Perri is in the midst of a campaign to draft new participants
into Foreign Trade Zone 106. As the zone's developmental director,
she's been traveling the state and appealing to commerce departments,
economic development centers, industrial parks, chambers of
commerce and similar business organizations to think big.
Xerox has saved about $750,000 annually by working within
the zone, Perri said. ConocoPhillips has saved from $1.5 million
to $2 million annually. Imation, which has been in and out
of the program depending on its production line, has saved
an estimated $6 million over the last four years, she said.
Sharon Schmelke, Xerox's zone administrator, said the company
has been involved for three years. She would not discuss company
figures, nor confirm Perri's savings estimates. The biggest
benefit has been the ease of importing material, Schmelke
"We've been approved for direct delivery, which means
we can bypass all the customs holdups and ports," she
said. "That has really saved us a lot of time and money."
Xerox can save up to 10 days in delivery of the chemicals
used in its printer and copying machine toner products. The
company ships from Brazil and Japan.
"And you're no longer just another name on a piece of
paper," Schmelke said. "You have a one-on-one relationship
with your customs people."
That was one of the goals of the Foreign Trade Zones Act
of 1934: "to expedite and encourage foreign commerce."
Merchandise within the designated zones - usually near U.S.
Customs Ports of Entry - receive the same tax-free customs
treatment they would as if the transactions occurred outside
the United States. The tariff and tax protections effectively
lower the costs of U.S.-based operations engaged in international
trade, which helps strengthen the companies' bottom line.
In 1970 there were eight zone projects nationwide; today
there are more than 250, customs officials confirmed. The
program's growth is due in large part to the expansion of
the program to allow manufacturing activity in the zones.
U.S.-based manufacturers can bring foreign-sourced materials
into the zones duty-free, incorporate those materials into
a finished product using U.S. parts and labor, and then pay
duty on the value of the foreign content only.
Perri is promoting a related element to potential participants.
"There has to be a good, sound reason you want to be
in the zone," she said. "You have to be importing
basically a minimum of about $5 million a year in order to
make it worthwhile. Oklahoma doesn't have a whole lot of major
industry. We've got a lot of mom-and-pop businesses, and our
small companies just don't make that much. However, they do
pay a lot in fees.
"So we're developing the concept of small communities
or cities; economic development centers coming together to
sponsor a warehouse or general purpose zone," said Perri.
"The city would pay the fees - they're much cheaper if
the land is government-owned - then they would charge user
fees to small companies to come in and use their space. You
can have a half-dozen smaller businesses coming together in
one building to do the assembly, to change that product that
has a duty on it into something else that's duty-free.
A small community could have several businesses taking advantage
of the program."
Perri's pitch might be working; five groups have expressed
interest, she said without identifying them.
Zone 106 is comprised of the western two-thirds of the state.
The zone includes in its easternmost border Kay County to
the north, then south to include Noble, Payne, Lincoln, Seminole
and Pontotoc counties, and then southwest through Garvin,
Stephens and Cotton counties. The state has three other foreign
Schmelke warned that a company should be ready for extensive
government paperwork. The zones are under the supervision
of the U.S. Customs Service. Customs' oversight of zone operations
since 1986 has included compliance audits and site inspections.
Brian Brus reports on city government and retail. You
may reach him by phone at 278-2837 or by e mail, email@example.com.