The U.S. Department of Commerce Foreign-Trade Zone (FTZ) Board recently designated the Port of Milwaukee as the new grantee for Foreign Trade Zone No. 41.
As a grantee, the port now has contractual oversight of subzone and user driven site applications. The port will promote the benefits of zone use for economic development and creation and retention of jobs in the region.
The FTZ Board approved the reorganization of the FTZ under the “Alternative Site Framework (ASF).” The reorganization under ASF allows companies within 60 miles or a 90 minute drive from Milwaukee to apply for FTZ status.
“This is great news for the city of Milwaukee,” said Milwaukee Mayor Tom Barrett. “The Foreign-Trade Zone at the Port of Milwaukee will create jobs and benefit our economy. Prospective zone users have already contacted the port requesting application information and FTZ designation procedures”
Commercial goods that enter a zone are not subject to U.S. Customs tariffs while they are within the zone. If the goods are then exported from the zone, they may be exempt from duty payments altogether. The designation allows foreign and domestic products to be stored, distributed, combined with other products or used in manufacturing while within a zone.
One of the financial advantages of trade zones is the cash-flow savings from deferring these payments. Another advantage is that companies can choose between the tariff classifications applicable to the components in the product or tariff classifications on the finished product, whichever duty rate is lower.
Milwaukee area manufacturing and distribution companies engaged in international trade are eligible for the program, which provides a competitive advantage through deferral, reduction or elimination of U.S. Customs duties.
“The city of Milwaukee will work to maximize the use of general-purpose zones and subzones of existing and prospective businesses to ensure job retention and encourage job creation in and around the Milwaukee area,” Barrett said.