Political and Policy Dimensions of Foreign Trade Zones: Expansion or the Beginning of the End?

Foreign Trade Zones ( zones ) have been touted as an essential element in expanding United States foreign commerce since their authorization in 1934. Over the last fifty years, structural changes have expanded the scope of the zone program, permitting the explosive growth of zone utilization. This expansion has caused renewed scrutiny of the entire zone program by the public and private sectors. Both United States industry and labor interests have objected to using zones for the manufacturing of products that subsequently are imported at substantial savings in customs duty. Further, opponents of the present zone program claim that the rapid increase in the number of zones and the manufacturing operations conducted therein have stolen jobs from more traditional domestic manufacturing operations. Proponents of zone expansion, including municipal and state authorities, argue that zone facilities attract industrial development to areas of the United States that otherwise might be outside of traditional international trade patterns. Proponents claim that zone operations have created a substantial number of jobs and have made domestic corporations more competitive