These answers are all correct. So maybe the best definition is one with the most meaning to businesses: a foreign trade zone is the means by which companies can lower costs and boost profits.

To achieve those benefits, you need to understand the fundamentals of foreign trade zones or FTZ’s. It's also important to recognize that the level of real benefits available from an FTZ depend on where it's located.

Foreign Trade Zone Basics

Legally, a foreign trade zone is an area within the United States that the government pretends is outside the country, or at least, outside of U.S. Customs territory. So you can import certain types of merchandise into one without going through formal customs entry procedures or paying import duties.

Once merchandise has moved into an FTZ, you can do just about anything with it. You can display or re-package goods, repair or destroy damaged ones. You can assemble component parts into finished products and re-export either the parts or finished products.

Some of the benefits in being able to do all this inside an FTZ may be obvious. At the very least an FTZ can help you defer paying duties. More often, the company pays lower costs, not just to the Customs office, but to its bank, insurance company, and other vendors.

For practical purposes, there are two types of FTZ’s--general purpose zones and special purpose subzones. Some companies can benefit by moving their operation into an existing general purpose zone. Others, typically large manufacturers, need to apply for subzone status to gain similar benefits.

FTZ in Moses Lake

The opportunities available from FTZ’s are nothing new. Foreign trade zones have been around since the days of Franklin Roosevelt and the New Deal. But for the first four decades or so, only nine foreign trade zones were created and all of them were located near coasts or borders.

In the early 1970s, however, a group of businessmen in Kansas City formed a not-for-profit entity that eventually was granted the right to manage FTZ’s in that area. This was the first inland area to be granted the right to operate an FTZ. Since then there has been a boom in the growth of foreign trade zones. In fact by the early 1990s more than 2,100 compares were operating in foreign trade zones throughout the United States.

The Port of Moses Lake received authority in October 1994 to establish an FTZ at the Grant County Airport, designated as Foreign Trade Zone No. 203.

But what exactly are the benefits of operating in an FTZ? Are there advantages to locating an FTZ in one part of the country over another? How can your company avoid difficulties, delays and unnecessary costs if you seek to become an FTZ?

This web site is aimed at answering those and many other questions. It not only looks at FTZ’s and their benefits, but at the application process and other factors. One goal is to help you decide whether an FTZ is right for your company. The other is to help you discover the benefits your company can gain from a foreign trade zone located in or around Moses Lake.

The fact is, the area outside a foreign trade zone--its transportation capabilities, the quality of the work force, overhead costs and many other factors--invariably play a vital role in determining how successful a company operates inside one.