Did you know that the Port of Little Rock is designated United States Foreign Trade Zone 14? Read on to learn what this means, as well as the special benefits this distinction grants the Port and the businesses that operate here.
What is a Foreign Trade Zone?
International trade plays a vital role in the economic prosperity of the world’s nations. To facilitate and bolster this trade, the United States established foreign trade zones in the 1930s. These zones operate under special customs rules that allow businesses to reduce, defer, or even eliminate certain import duties and taxes on goods that are imported into the zone for manufacturing, processing, or storage purposes.
About Foreign Trade Zone 14
Foreign Trade Zone 14 was granted by the federal government to the Arkansas Economic Development Commission on October 4, 1972. In 2011, the Department of Commerce approved reorganization and expansion of FTZ 14. Today, it serves a total of seventeen counties in Arkansas.
Strategically located at the Port of Little Rock, FTZ 14 provides companies with manufacturing and distribution operations, as well as convenient access to the Port’s intermodal transportation systems. The FTZ has a 25-acre footprint and features a 104,000-square-foot general-purpose building that also serves an extension at the Clinton National Airport.
↪ Did You Know? The only other Foreign Trade Zone in Arkansas is in West Memphis (FTZ 273).
What Does Foreign Trade Zone 14 Offer?
FTZ 14 offers several economic and logistical benefits to its users:
Duty & Tax Exemptions
There are no duties or quota charges on re-exports, and customs duties and federal excise tax are deferred on imports. In addition, foreign and domestic goods held for export are exempt from state and local inventory taxes.
An inverted tariff refers to situations in which in-zone production results in a finished product that has a lower duty rate than the rates on the foreign inputs required to make it. In other words, if a product is manufactured or processed within FTZ 14, businesses can choose to pay either the duty rate applicable to the finished product or the duty rate of the original components—whichever is lower.
In addition to the many transportation benefits that the well-connected Port of Little Rock offers, companies using the FTZ have access to streamlined customs procedures such as weekly entry or direct delivery.
↪ Did You Know? Some of the global businesses at the Port of Little Rock include Welspun Tubular, Novus International, Georg Fischer, Fiocchi, and Synthesia.
The Future of Economic Growth
Located in the heart of Arkansas, Foreign Trade Zone 14 plays a pivotal role in promoting economic growth and job creation in Little Rock and beyond. By attracting foreign direct investment, fostering a favorable business environment, and offering manufacturing incentives, FTZ 14 is a gateway to global commerce that stimulates the economy and provides countless job opportunities to the people of the Natural State.