The U.S. Foreign-Trade Zones Program: Economic Benefits to American Communities

Tempo de leitura: 1 minuto

Foreign-trade zones (FTZs or zones) provide tariff savings and other benefits to companies that engage in import and export operations in the United States. These benefits were provided by Congress beginning in 1934 to encourage U.S. economic activity in manufacturing and distribution, and employment that might otherwise be performed abroad.

Economic analysis of the effects of FTZs is limited, particularly the impact of FTZs on economic activity and jobs in localities with operational zones. To remedy this deficiency, the National Association of Foreign Trade Zones commissioned this study to inform policymakers and the public, and to provide an analytic tool for economic development institutions. 

This study measures, both quantitatively and qualitatively, the economic effects of FTZs on the communities in which the zones operate, which we refer to as Zone Economic Communities (ZECs). We examine the economic impacts of FTZs on ZECs using an econometric approach that enables us to attribute changes in community employment, wages, and value added1 to the operation of a zone.

Specifically, we examine the changes in these three economic measures in each of 251 ZECs compared to an otherwise similar economic community in the same region that did not have an FTZ. We supplement the econometric analysis by profiling a variety of firms that use FTZs and describe the specific ways in which the program’s benefits have affected company and community employment and other economic activity, including, the efficient allocation of company resources, domestic production, and exports. 

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