Trade Zone Offers Key Advantages

Inside the country but outside of duty taxation, foreign trade zones, like the new one in Spokane, bring special advantages to companies that do international business.

For example, Hasbro Inc., which has a warehouse in the foreign trade zone at the Port of Tacoma, economically ships some of its toys in bulk, then packages them at the warehouse, cutting production costs.

“This little doll has this little dress and has to be put in this little box,” said Jerry Ahmann, industrial development manager at the Port of Tacoma. The assembly is done before the dolls leave the foreign trade zone and before Hasbro has to pay duties on the imports.

Using the example of the toy manufacturer, Ahmann explained the benefits of free trade zones at a Spokane Regional International Trade alliance conference Tuesday.

From storing import products until U.S. quotas are lifted to assembling or repairing goods, all can take place without companies having to pay import taxes until the products leave the protected trade zone.

Another example is Panasonic, which ships its products through the Port of Tacoma. Last October, the company had 20 containers of televisions on which the electrical connection didn’t meet U.S. import standards. Instead of having to ship the TVs back to Japan, the company repaired them inside the foreign trade zone. “And we brought in U.S. labor to correct the fault,” Ahmann said.

By using trade zones, companies can keep a competitive edge both here and abroad by postponing or avoiding certain duties, he said. A shoe company, for example could import its leather, make the shoes at a plant inside the trade zone, and not have to pay import tax on all of the leather wasted in the process, Ahmann said.

Studies have shown that for every dollar the federal government loses in excise taxes and other duties due to the trade zones, $7 is earned through things like company profits, property taxes and employee withholdings.

“And it’s taking the money away from the federal government and putting it at a local level,” Ahmann said.

Washington has 12 foreign trade zones including one in Seattle, one in Tacoma and, as of Aug. 1, one including Spokane’s airports and at a West Plains industrial park, a total of about 5,700 acres.

Although no businesses have yet taken part in Spokane’s foreign trade zone, many are showing interest, said Todd Woodard, manager of marketing and public relations for Spokane Airports and Spokane International Business Park at Felts Field.

“We expect to get going in the next six to nine months,” he said. “And it won’t be just in Spokane, but also Colville and the Tri-Cities and other ports in the region.”

“I’m really interested,” said Jim McAndrews of Marissa Rose International, a Spokane-based import-export business.

“This is something that Spokane has needed for a long time,” McAndrews said.

, DataTimes The following fields overflowed: CREDIT = Hannelore Sudermann Staff writer