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Use of, Exports from U.S. Foreign-Trade Zones Again Hit Record Highs

Wednesday, September 03, 2014
Sandler, Travis & Rosenberg Trade Report

The Foreign-Trade Zones Board’s annual report on FTZ activities shows that in 2013 zone activity again saw a substantial increase. Highlights of the report’s findings (with comparisons to statistics for 2012, where applicable) include the following.

- There were 257 approved FTZs (up from 256) and 177 active (up from 174), with a total of 289 active production operations (up from 276). Approximately 390,000 persons (up from 370,000) were employed at some 3,050 firms that used FTZs (down from 3,200).

- The FTZ Board approved the creation of four new FTZs (down from five), the reorganization of 23 zones under the alternative site framework (down from 35), and 65 applications and notifications for new or expanded manufacturing authority (up from 21). The Board also processed an additional 180 requests (up from 150) that included minor boundary modifications and scope determinations.

- Exports from facilities operating under FTZ procedures amounted to $79.5 billion, the third straight record high and a 13.7 percent increase from 2012. This figure does not include certain indirect exports involving FTZ merchandise that undergoes further processing in the U.S. at non-FTZ sites prior to export.

- The value of shipments into zones rose 14 percent to a new record of $835.8 billion. Of these shipments, 68 percent ($571.3 billion) were used for production operations while the rest ($264.5 billion) went to warehouse and distribution operations.

- About 65 percent of the shipments received in FTZs ($545.5 billion) involved domestic status merchandise, indicating that FTZ activity tends to involve domestic operations that combine foreign inputs with significant domestic inputs. This figure is up from 58 percent in 2012 but is still lower than the high of about 80 percent in the mid-1990s.

- The largest industries accounting for zone production activity included oil refining, automotive, electronics, pharmaceutical, and machinery and equipment.

- The main foreign-origin products received in FTZs for warehousing and distribution operations included vehicles ($24.1 billion, up from $16.2 billion), oil and petroleum ($19.1 billion, down from $29.7 billion), other electronics ($9.0 billion, up from $2.9 billion), textiles and footwear ($8.0 billion, up from $3.8 billion), and consumer electronics ($5.8 billion, down from $9.8 billion).

- The main foreign-origin products received in FTZs for production operations included oil and petroleum ($163.6 billion, down from $187.9 billion), vehicle parts ($9.3 billion, down from $9.5 billion), machinery and equipment ($5.6 billion, up from $4.6 billion), consumer electronics ($5.2 billion, down from $6.7 billion), and pharmaceuticals ($3.5 billion, down from $5.1 billion).

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