Many companies have established operations on both sides of the U.S./Mexico border where product is regularly moved between facilities at corresponding border towns.  In recent years, the departure of manufacturing operations from Mexico to Asia (for lower labor rates) has affected Mexican facilities and their U.S. counterparts.

      So how can U.S. Foreign Trade Zones benefit both the United States and Mexico by making them more competitive together? Let’s start with some background information on Foreign-Trade Zones:

      The Foreign Trade Zone program was created by the U.S. government to facilitate international trade and increase the global competitiveness of U.S.-based companies. The program, which has existed since the 1930s, continues to thrive and change to meet the needs of global corporations.

      An FTZ is an area within the United States, in or near a U.S. Customs port of entry, where foreign and domestic merchandise is considered to be outside of U.S. Customs territory. Certain types of merchandise can be imported into a 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, no duties or taxes are paid on those items.

      Merchandise entering a zone may be:

      •assembled

      •tested

      •sampled

      •relabeled

      •manufactured

      •stored

      •salvaged

      •processed

      •repackaged

      •destroyed

...Continued in the pages of Twin Plant News, Subscribe Today!