Report details impact on annual volume, dollar value of exports and jobs

The combined value of merchandise entering US foreign-trade zones totaled $245 billion in 2003, a 20% increase over the $204 billion in shipments the previous year, according to an economic impact study just released by the National Association of Foreign-Trade Zones (NAFTZ). Sixty-five percent of goods entering zones are from the US. The report illustrates that exports from US foreign-trade zones reached $19.8 billion in 2003 -- an increase of 27% over 2002. Employment totaled 338,225 in jobs associated with zone activities -- an increase of 6% over the previous year.

Foreign-Trade Zones (FTZs) were created in the United States to provide special customs procedures to US plants engaged in international trade- related activities. These procedures were aimed to offset customs advantages available to overseas producers who compete with domestic industry. The FTZ program requires that zone activities result in a significant public benefit and a net positive economic effect.

"US Foreign Trade Zone operations are inconspicuous, while their locations are strategically positioned in close proximity to an airport or a deepwater port. FTZs pack a big economic punch to the US economy," explained Willard M. Berry, the executive director of the National Association of Foreign-Trade Zones (NAFTZ). "They provide exporters and global manufacturers with cost-efficiencies that translate into lower consumer prices. Their activities, likewise, contribute to employment and border security. In meeting the complex and cost-driven demands of international trade, these vital economic engines are helping to drive a bustling US economy."

In addition to fulfilling a number of critical roles, such as the duty- free assembly of imported components for duty-free export as finished product, US FTZs are avenues for opportunity. They support 338,000 jobs in communities located throughout the fifty US states and Puerto Rico. In fact, job activity in the 250 general-purpose zones, together with activity in the 538 sub-zones, rose by an impressive six percent between 2002 and 2003.

Job growth related to activities in FTZs is actually doing better as a whole than the nation in general. Job growth was only one percent in non-agricultural industries outside of FTZs nationwide between 2002 and 2003. The six percent job growth experienced in FTZs during that same period can be attributed to two crucial factors. First, it was the result of an increasing demand for the cost-efficient services afforded by the program. And second FTZ's have access to a qualified, skilled and educated workforce to fulfill the service requirements of FTZ-users. FTZs are playing an important role in retaining employment opportunities across the US and generating untold billions in both sales revenue and taxes collected. This ultimately translates into more efficient interstate systems, a higher quality of education for America's youth and a better quality of living for the American public.

Top ranked states by employment

State Employment

Texas 71,007

Ohio 29,803

Illinois 29,726

Louisiana 27,175

Kentucky 18,125

Tennessee 16,829

Indiana 16,038

Arizona 13,857

California 11,576

Mississippi 10,415

Puerto Rico 9,612

New Jersey 9,496

Florida 9,060

Total 272,719

(Source: NAFTZ)

While not all zones are jobs-oriented, they do tend to keep many manufacturing-type jobs in the US and away from foreign competition. Even in times of economic downturn when growth in general is sluggish, FTZ activity is strong. During 2003, 2,796 firms were actively engaged in utilizing the advantages of US FTZs, a 22% increase over 2002.

"Beyond job impact, the dollar volume pumped into the US economy as the result of FTZ activity is tied directly to how much cumulative business goes in and out of the FTZs. Among