Free-trade zone


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These continued through at least the first millennium CE. In the 12th century the Hanseatic League began operating in Northern Europe, and established trading colonies throughout Europe. The Steelyard, like other Hansa stations, was a separate walled community with its own warehouses on the river, its own weighing house, chapel, counting houses and residential quarters.

In remains of the former Hanseatic trading house, once the largest medieval trading complex in Britain, were uncovered by archaeologists during maintenance work on Cannon Street Station. Shannon , Ireland Shannon Free Zone [9] established in has claimed to be the first "modern" free trade zone. The Shannon Zone was started to help the city airport adjust to a radical change in aircraft technology that permitted longer range aircraft to skip a required refueling stops at Shannon.

It was an attempt by the Irish Government to maintain employment around the airport and for the airport to continue generating revenue for the Irish economy. It was hugely successful, and is still in operation today. The number of worldwide free-trade zones proliferated in the late 20th century. Corporations setting up in a zone may be given a number of regulatory and fiscal incentives such as the right to establish a business, the right to import parts and equipment without duty, the right to keep and use foreign exchange earnings, and sometimes income or property tax breaks as an incentive.

There may also be other incentives relating the methods of customs control and filing requirements. The rationale is that the zones will attract investment and create employment and thus reduce poverty and unemployment, stimulating the area's economy.

These zones are often used by multinational corporations to set up factories to produce goods such as clothing, shoes, and electronics. Free-trade zones should be distinguished from free trade areas. In Free trade areas tariffs are only lowered between member countries. They should also be distinguished from customs unions, like the former European Economic Community where several countries agree to unify customs regulations and eliminate customs between the union members.

Free-trade zones have more recently been also called special economic zones in some countries. Special economic zones SEZs have been established in many countries as testing grounds for the implementation of liberal market economy principles. SEZs are viewed as instruments to enhance the acceptability and the credibility of the transformation policies and to attract domestic and foreign investment. The change in terminology has been driven by the formation of the World Trade Organization WTO which prohibits members from offering certain types of fiscal incentives to promote the exports of goods, thus the term Export Processing Zone EPZ is no longer used with newer zones.

In , there were 43 million people working in about FTZs spanning countries producing clothes , shoes , sneakers , electronics , and toys. The basic objectives of economic zones are to enhance foreign exchange earnings, develop export-oriented industries and to generate employment opportunities. The ASF provides Foreign-Trade Zone Grantees with greater flexibility to meet specific requests for zone status by utilizing the minor boundary modification process.

The theory of the ASF is that by more closely linking the amount of FTZ designated space to the amount of space activated with Customs and Border Protection, Zone users would have better and quicker access to benefits. When a FTZ Grantee evaluates whether or not to expand its FTZ project in order to improve the ease in which the Zone may be utilized by existing companies, as well as how it attracts new prospective companies, the Alternative Site Framework ASF should be considered.

The ASF may be an appropriate option for certain Foreign-Trade Zone projects, but the decision of whether to adopt the new framework and what the configuration of the sites should be will require careful analysis and planning. Regardless of the choice to expand the FTZ project, the sites should be selected and the application should be drafted in such a manner as to receive swift approval, while maximizing benefit to those that locate in the Zone.

Successful zone projects are generally the result of a plan developed and implemented by individuals that understand all aspects of the FTZ program. Sometimes the domestic government pays part of the initial cost of factory setup, loosens environmental protections and rules regarding negligence and the treatment of workers , and promises not to ask payment of taxes for the next few years.

When the taxation-free years are over, the corporation that set up the factory without fully assuming its costs is often able to set up operations elsewhere for less expense than the taxes to be paid, giving it leverage to take the host government to the bargaining table with more demands, but parent companies in the United States are rarely held accountable.

Political writer Naomi Klein has also criticized the transient nature of FTZs, noting the factory closures connected to the Asian financial crisis. She criticized the low wages and long hours, citing work days of twelve or more hours in Indonesia, Philippines, Southern China and Sri Lanka circa From Wikipedia, the free encyclopedia.

Redirected from Foreign trade zone. This article is about the special economic zones within countries. For other uses, see Free Zone. For other uses, see FTZ disambiguation. This article has multiple issues. Please help improve it or discuss these issues on the talk page.

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