At the Aug. 15 Wyoming County Board of Supervisors meeting held at the Pike Fair, the Board approved a resolution to allow the county’s Industrial Development Agency (IDA) to request admittance into the Erie County Foreign Trade Zone No. 23.
While the county could apply independently, it would have been cost prohibitive and there may have been a possibility of being rejected, says Wyoming County Planning and Development Director Bill Daly. Instead, the IDA is sending a letter of request to Erie County to be added to its FTZ.
“What really would happen is that the Erie County IDA would run Foreign Trade Zone No. 23 for Wyoming County,” Daly said. “Once Wyoming County is allowed into the zone, businesses that wish to become part of the FTZ would work with the Erie County IDA to become part of the zone.”
The foreign-trade zones (FTZs) program was authorized by Congress in 1934 to help “level the playing field and improve U.S. competitiveness” by allowing delayed or reduced duty payments on foreign merchandise. As it stands in the county now, if a business or manufacturer buys parts from a foreign country, the duty must be paid on the merchandise immediately. If Wyoming County is approved to become part of FTZ No. 23, those tariffs would only be paid on the part if it is shipped within the United States.
“What it does is allow for increased cash flow. The business wouldn’t have to pay a duty on the part(s) used as part of a whole product upon receipt. And, the duty wouldn’t be collected on items shipped outside of the U.S..”
Daly says being a part of the FTZ is a great economic development tool and could attract more business or manufacturers to the county because it would allow imported goods to be duty-free.
“We are seeing foreign companies wanting to put plants in the U.S. and we want Wyoming County to be considered for new businesses. A company cannot independently ask to be part of an FTZ unless the county is part of an FTZ.”
There are two types of zones in FTZ No. 23: general-purpose – involve public facilities that can be used by more than one company; and subzones – involve a single company’s site such as a manufacturing plant.
“The subzone is a marked-off area, approved by customs, within a business or manufacturing plant specifically for parts purchased from foreign countries. Everything is accounted for in this designated area. No duty is paid on it unless shipped to a company in the States. This allows American companies to participate in world trade and not be at a disadvantage with those with free-trade zones.”
However, being added to FTZ No. 23 is a three-step process. The county must be approved by Erie County, it is then sent on to the State for approval, once that is approved, the Federal Government gives the final say on whether the county is allowed to participate.
“There should be no reason for denial of Wyoming County’s application into the FTZ. And, any cost associated at this point of the process is paid for by Wyoming County IDA.”
Once Wyoming County becomes part of the zone, the county’s IDA would work with businesses to become part of the program with the Erie County IDA. While the IDA is picking up the tab to become a part of FTZ No. 23, it is up to the company to pay administration fees to the Erie County IDA if they want to join.
For more information on FTZs click here.