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Foreign Trade Zones to be Established in Medina County

Today the “buzzword” that is most often used to refer to the business world is “the Global Economy”. Companies operating in this global environment must be equipped to compete. It is that very factor...global competition.... that has generated local interest in foreign trade zones (FTZ). The Medina County Economic Development Corporation (MCEDC) began to investigate the benefits that FTZs can bring into play when working to attract companies. Working in collaboration with the Board of Medina County Commissioners and the Medina County Port Authority, MCEDC has led the effort to establish FTZs within the county. A very important step was taken when on November 8, 2004 the Medina County Commissioners acted to join the North East Ohio Trade & Economic Consortium (NEOTEC). Serving as the operator of Foreign Trade Zone (FTZ) #181, NEOTEC is now partnered with Medina County to create Foreign Trade Zones.

The Foreign Trade Zone program was created in by Congress 1934 as an incentive to encourage companies to keep investment and jobs in the United States and not move production offshore. The program removes certain costs and barriers that do not exist in foreign locations.

Benefits of Foreign Trade Zone status include:

1. Duty Deferral: companies can defer the payment of duties and tariffs while product is stored in the FTZ.
2. Duty Reduction: companies can reduce duties and tariffs on product that is assembled or manufactured into finished product with a lower duty rate.
3. Duty Elimination: companies avoid paying duties on product that is imported then exported out of the country.
4. Direct Deliver: companies can apply for authority to receive product, break seals and clear customs within the FTZ facility, thereby bypassing the congestion at sea ports.
5. Weekly Entry: a company can reduce Merchandise Processing Fees by combining shipments on one entry filed weekly.
6. Tax Savings: inventory held in a General Purpose Foreign Trade Zone in the State of Ohio is exempt from personal property tax (subject to local conditions).

With so much manufacturing in Northeastern Ohio at risk in this era of globalization, the promotion and utilization of these economic development tools can be an important weapon in the ongoing effort to stem the loss of jobs. Companies that are heavily engaged in the field of international commerce have more inherent “staying power” when it comes to overseas competition. If we can attract them, in part, through the benefits that FTZs can provide, the chances of growing the business right here are improved.

On January 27, 2005, MCEDC and NEOTEC co-hosted an informational meeting about FTZs. Eight developers were in attendance and, as a result, Medina County currently has four (4) locations that will be seeking FTZ designation. NEOTEC, under the leadership of Executive Director Ron DeBarr, will be submitting the application for these sites to the Foreign Trade Zone Board in Washington, D.C. in June 2005. The approval process will take 10 - 12 months after which we hope to have FTZ benefits.