Nafta they're not, but commercial free trade zones, the specially designated areas that allow tenants to delay or forgo import and export duties, dot Southern California and more are on the way.
The latest entrant is a 500-acre zone in the City of Industry that would cover the 400-acre Grand Crossing industrial park and about half of the 190-acre Fairway Business Center. The application, filed more than a year ago, should be complete in one or two months.
"In 1970, there were about seven Foreign Trade Zones in the country; now, the numbers are 400 to 500," said David Harlow, president of International Trade Consultants LLC in Brea. Harlow's firm is shepherding the Grand Crossing/Fairway application on behalf of Majestic Realty Co., which manages the larger park and co-owns the smaller.
Under a law passed in 1934, the Commerce Department's Foreign Trade Zone Board can name port or airport authorities as FTZ grantees. The authorities, in turn, accept applications from commercial interests to become administrators of sub-zones covering an area as narrow as a single warehouse to one as large as an entire industrial park.
In the Los Angeles region, Foreign Trade Zone authorities have been established by the ports of Los Angeles and Long Beach, the city of Palmdale and the Southern California Logistics Airport Complex in Victorville. Applicants need not be in their immediate area; the Industry application is being handled through Victorville, in San Bernardino County.
The appeal of the FTZs is that no duties are paid on goods or raw materials brought into the country by a company with an FTZ until they enter U.S. commerce. If the goods are warehoused in an FTZ then exported to other countries, no duties are paid at all.
That provides a savings to companies operating within the zones and gives developers such as Majestic an added marketing tool.
* The full version of this story is available in the March 14 edition of the Los Angeles Business Journal.
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