Business Groups Appeal for Reversal of Foreign Trade Zone Changes

New York, N.Y., October 17, 2011 – Looming changes to the way goods are treated in U.S. Foreign Trade Zones have drawn an appeal from a range of pro-trade business groups, which say the changes will undercut the Obama administration’s National Export Initiative and cost American jobs.

The United States Council for International Business (USCIB), which represents top U.S. multinational companies and exporters, and other industry groups have appealed to Acting Commerce Secretary Rebecca Blank and Treasury Secretary Timothy Geithner to halt a planned rule change by the U.S. Foreign Trade Zone Board (FTZB), an interagency body chaired by the Commerce Department, that would automatically apply U.S. anti-dumping and countervailing duties on imports processed through foreign trade zones.

“Given the administration’s high priority for export growth, the FTZB rules should strongly promote, rather than inhibit, U.S. exports,” the business groups wrote in their letter.  “Unfortunately, the proposed FTZB regulations would harm President Obama’s National Export Initiative and result in a loss of manufacturing jobs in U.S. Foreign Trade Zones.”

For the past 20 years, such duties have been waived on imports provided the finished products were not ultimately imported into the customs territory of the United States.  The new rule would make such a waiver dependent on a finding that it was in the public interest, effectively nullifying the benefit to businesses of utilizing U.S. foreign trade zones.

“Foreign Trade Zones are one of the critical avenues for promoting exports and manufacturing jobs in the United States,” stated Jerry Cook, vice president, international with HanesBrands, Inc. and chair of USCIB’s Customs and Trade Facilitation Committee.  “We must do all that we can to foster these vital functions, rather than inhibit them.”

In their letter, USCIB and the other business groups noted that foreign trade zones accounted for $28 billion in exports in the most recent year available and employ 330,000 American workers.  They said the rule change would “drive U.S. manufacturing to other countries, where the same activity could take place without undue delay, risk or expense.”  U.S. manufacturers would suffer in competition with foreign factories, which will lead to the further loss of U.S. manufacturing jobs, they wrote.

Other signatories to the letter included American Apparel & Footwear Association, American Association of Exporters and Importers, American Institute for International Steel, Consuming Industries Trade Action Coalition, Emergency Committee for American Trade, National Association of Foreign Trade Zones, TechAmerica, and the U.S. Chamber of Commerce.

About USCIB

USCIB promotes open markets, competitiveness and innovation, sustainable development and corporate responsibility, supported by international engagement and prudent regulation.  Its members include top U.S.-based global companies and professional services firms from every sector of our economy, with operations in every region of the world.  With a unique global network encompassing leading international business organizations, USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade and investment.  More information is available at www.uscib.org.

Business letter to Secretaries Blank and Geithner

More on USCIB’s Customs and Trade Facilitation Committee

More on USCIB’s Trade and Investment Committee

Staff Contact:   Jonathan Huneke

VP, Communications and Public Affairs
Tel: 212.703.5043

Jonathan Huneke is responsible for USCIB’s strategic communications, including media relations, publications, online content and high-level public events. He also manages the work of USCIB’s Marketing and Advertising Committee.
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