The governor’s office said the changes in Zone 214, approved by U.S. Customs and Border Protection, were instigated by Gov. McCrory’s policies and will help the state increase manufacturing jobs and global trade.
Patrick Conway, a UNC economics professor and department chairperson, said foreign-trade zones allow businesses to import goods without being subject to customs taxes as long as the goods will be re-exported.
This allows local companies to be competitive in global supply chains, which Conway said refers to the tendency of companies to spread manufacturing processes across multiple countries that offer the lowest production costs for certain steps.
“To compete in that global supply chain business, a firm has to be able to import the product, assemble or add to the product, and then re-export it for sale elsewhere,” he said. “If that firm has to pay import duties, which are like taxes on the imports and they have to pay an export fee or export charge on goods that they re-export, that raises the costs of production.”
Conway said the expansion of foreign-trade Zone 214 will allow more companies in the zone to be competitive and offer lower costs.
Wayne Cooper, chairperson of the North Carolina District Export Council, said a business using the zone can save millions of dollars by avoiding import duties. He said these lower production costs could create greater job opportunities for companies working in the zone.
“We are all trying to work to try and recruit foreign investment in the area, and I think having a foreign trade zone available to a foreign manufacturer really helps in recruiting them,” he said.
Rick Hill, director of international trade for the Economic Development Partnership of North Carolina, said as of 2015, North Carolina exported $31 billion worth of goods and services, mostly to Canada and Mexico.