2011

73rd ANNUAL REPORT of the

ForeignTrade Zones Board to the

Congress OF THE UNITED STATES

Foreign-trade zones (FTZs) – the U.S. variation on the general “free trade zone” concept – are secure areas under the supervision of U.S. Customs and Border Protection (CBP) that are considered outside the customs territory of the United States for the purposes of duty payment. Authority for establishing these facilities is granted by the Foreign-Trade Zones Board under the Foreign-Trade Zones Act of 1934, as amended (19 U.S.C. 81a-81u), and the Board’s regulations (15 C.F.R. Part 400). The Executive Secretariat of the Board is part of the Import Administration within the International Trade Administration of the U.S. Department of Commerce. Foreign and domestic merchandise may, subject to FTZ Board and CBP regulations, be moved into zones for operations not otherwise prohibited by law, including storage, exhibition, manipulation, and manufacturing. The Board’s regulations require a case-by-case review for all manufacturing activity to be conducted in FTZs. Under zone procedures, the formal customs entry procedure and payment of duties are not required on the foreign merchandise unless and until customs entry is made for domestic consumption. For foreign merchandise that undergoes further processing in a zone before customs entry, the importer ordinarily has a choice of paying duties either on the original foreign materials or on the resulting finished product. Domestic goods moved into a zone for export can be considered exported upon entering the zone for purposes of excise tax rebates and drawback. All FTZ sites and activities remain within the jurisdiction of federal, state and local governments and agencies. Each zone is managed locally by the “grantee” organization – generally a public or non-profit organization focused on trade and/or economic development. The FTZ Act requires each grantee to operate its zone as a public utility and to treat companies using the zone uniformly under like conditions. Traditionally, many zones have included sites at seaports or airports as well as some industrial parks, with the intent of attracting companies to the zone. Increasing numbers of zones are now opting to use the “Alternative Site Framework” made available by the Board beginning in December 2008, which enables a much quicker, simpler on-demand process to designate “subzones” or “usage-driven sites” at specific companies’ facilities. The regulations of the Foreign-Trade Zones Board are published in the Code of Federal Regulations at Title 15, Part 400 (15 C.F.R. Part 400), and the regulations of U.S. Customs and Border Protection concerning zones at Title 19, Part 146 (19 C.F.R. Part 146). Information on foreign-trade zones is available on the FTZ Board’s website via: http://www.trade.gov/ftz.

73rd ANNUAL REPORT of the

Foreign-Trade Zones Board to the

Congress

OF THE UNITED STATES

Published December 2012 ISSN 1544-2322

Printed on recycled paper. Federal Recycling Program

The full text of this document is available on the Foreign-Trade Zone Board’s Internet site at www.trade.gov/ftz. It is also available for purchase as a paper or microfiche reprint, or an electronic download, from the National Technical Information Service, 5285 Port Royal Road, Springfield, VA 22161; www.ntis.gov.

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FOREIGN-TRADE ZONES BOARD 2011 JOHN E. BRYSON Secretary of Commerce TIMOTHY F. GEITHNER Secretary of the Treasury

________ ALTERNATES

Paul Piquado Assistant Secretary for Import Administration U.S. Department of Commerce Timothy E. Skud Deputy Assistant Secretary of the Treasury (Tax, Trade, and Tariff Policy) U.S. Department of the Treasury

________ Andrew McGilvray Executive Secretary

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CONTENTS Page Introduction ......................................................................................................................

1

Appendices A - Summary Statistics, 2007 – 2011.................................................................................

4

B - Main Foreign-Status Products Received in U.S. FTZs .................................................

6

C - Merchandise Received And Exports – Top 25 .............................................................

8

D - FTZ Activity by State.................................................................................................. 13 E - Reference .................................................................................................................... 119

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INTRODUCTION During the 2011 calendar year 1, the Foreign-Trade Zones (FTZ) Board received and filed 84 formal applications, and issued 79 formal orders. The Board’s decisions included approving three new foreigntrade zones, the reorganization of 38 zones under the FTZ Board’s alternative site framework (ASF) and nine applications for new or expanded manufacturing authority. In addition, the FTZ Board Staff processed more than 125 requests administratively, including minor boundary modifications and scope determinations. There were 171 FTZs active during the year, with a total of 269 active manufacturing/production operations. Approximately 340,000 persons were employed at some 2,800 firms that used FTZs during the year. The value of shipments into zones totaled over $640 billion, compared with $534 billion the previous year (Appendix A). About 57 percent of the shipments received at zones involved domestic status merchandise. The level of domestic status inputs used by FTZ operations indicates that FTZ activity tends to involve domestic operations that combine foreign inputs with significant domestic inputs. Warehouse/distribution operations received nearly $106 billion in merchandise while manufacturing/production operations received $535 billion (83 percent of zone activity). The largest industries accounting for zone manufacturing/production activity include the oil refining, automotive, electronics, pharmaceutical, and machinery/equipment sectors. The main foreign-origin products received at zones are listed in Appendix B. Exports (shipments to foreign countries) from facilities operating under FTZ procedures amounted to over $54.3 billion (Appendix A). The export figures do not include certain indirect exports involving FTZ merchandise that undergoes further processing in the United States at non-FTZ sites prior to export. The FTZ Board’s notices on applications as well as information on specific zone sites can be found on the FTZ Board’s website (www.trade.gov/ftz) under “Online FTZ Information System (OFIS).” In addition, the website contains contact information for each zone, a summary of all Board Orders, lists of administrative cases and other reference materials.

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Past reports were based on the federal fiscal year instead of the calendar year. The 2011 report also marks a shift in the format of information reported for each zone (Appendix C). Information is now provided separately for each manufacturing/production operation while the warehouse/distribution activity within each zone is aggregated. The data by state and by zone in Appendix C is reported in ranges because it incorporates business-proprietary information. 1

Annual Report of the Foreign-Trade Zones Board – 2011

Figure 1: Foreign-Trade Zones: Merchandise Received 1991-2011

800

700

600

Billion $

500

400

300

200

100

0

1991

1993

1995

1997

1999

2001

Foreign Status

2003

2005

Domestic Status*

2007

2009

2011

Total

* “Domestic status merchandise” includes both domestic-origin items and foreign-origin items that have been entered for consumption (duty-paid) prior to FTZ admission.

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Figure 2: Foreign-Trade Zones: Exports (1991-2011)

60

50

40

Billion $

30

20

10

0

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

Figure 3: Foreign-Trade Zones: Domestic Status* Merchandise Ratio (As percent of Total Merchandise Received) (1991-2011)

90 80 70 60 Percent

50 40 30 20

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

* “Domestic status merchandise” includes both domestic-origin items and foreign-origin items that have been entered for consumption (duty-paid) prior to FTZ admission. 3


Appendix A

APPENDIX A: SUMMARY STATISTICS 2007 – 2011

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Appendix A

SUMMARY STATISTICS, 2007 – 2011 ($ billion)

Merchandise Received Warehouse/Distribution Production

2007

2008

2009

2010

2011

501.9

692.6

430.6

534.3

640.9 105.9 535.0

% Production

83%

Foreign Status Inputs Warehouse/Distribution Production

201.5

296.3

182.0

223.1

277.0 52.0 225.0

Domestic Status Inputs1 Warehouse/Distribution Production

300.3

396.2

248.6

311.2

363.8 53.8 310.0

Domestic Status Inputs Ratio Warehouse/Distribution Production

60%

57%

58%

58%

57% 51% 58%

31.6

40.5

28.2

34.8

54.3 12.5 41.8

Number of Approved FTZ3

254

253

253

254

257

Active FTZ4

161

164

168

168

171

Exports2 Warehouse/Distribution Production

1

Domestic status merchandise includes both domestic-origin items and foreign-origin items that have been entered for consumption (duty-paid) prior to FTZ admission. 2

Export figures are based on material inputs and do not include value added.

3

The number of approved FTZs is the sum of all zones approved by the FTZ Board, minus those that have lapsed or been terminated. 4

Active FTZs have at least one site or subzone in operation.

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Appendix B

APPENDIX B: MAIN FOREIGN-STATUS PRODUCTS RECEIVED IN U.S. FTZs

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Appendix B

MAIN FOREIGN-STATUS PRODUCTS RECEIVED IN U.S. FTZs ($ million)

WAREHOUSE/DISTRIBUTION OPERATORS Oil/Petroleum Vehicles Machinery/Equipment Vehicle Parts Textiles/Footwear Consumer Products Other Electronics Consumer Electronics Pharmaceuticals Other Metals/Minerals Electrical Machinery Plastic/Rubber Beverages/Spirits Iron/Steel Optical, Photographic and Medical Instruments Chemicals Petrochemicals Tobacco Food Products Stone/Plaster/Cement/Ceramics Fragrances/Cosmetics Wood/Paper Aircraft/Spacecraft Rail cars, Parts and Equipment Fats/Oils Arms/Ammunition Advanced Fiber Materials Dyes/Pigments/Paints

MANUFACTURING/PRODUCTION OPERATORS 36,844 11,532 6,666 4,721 2,868 2,848 2,629 1,241 1,213 1,109 916 427 427 402 347 219 130 120 118 94 93 64 58 22 11 2 1 0.2

Oil/Petroleum Vehicle Parts Consumer Electronics Pharmaceuticals Machinery/Equipment Petrochemicals Ships/Boats Chemicals Plastic/Rubber Other Electronics Other Metals/Minerals Electrical Machinery Consumer Products Textiles/Footwear Advanced Fiber Materials Fragrances/Cosmetics Beverages/Spirits Aircraft/Spacecraft Optical, Photographic and Medical Instruments Dyes/Pigments/Paints Food Products Iron/Steel Wood/Paper Vehicles Stone/Plaster/Cement/Ceramics

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194,946 8,749 7,984 7,133 3,317 2,864 1,559 965 818 605 488 395 390 195 173 65 65 59 55 45 28 22 15 10 2


Appendix C

APPENDIX C: MERCHANDISE RECEIVED AND EXPORTS – TOP 25

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Appendix C

MERCHANDISE RECEIVED AND EXPORTS – TOP 25 ($ million)

Top 25 States for FTZ Activity Merchandise Received 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Exports

State Texas Louisiana California Illinois Pennsylvania Kentucky New Jersey Mississippi Ohio South Carolina Alabama Florida Maryland Tennessee Washington Michigan Georgia Puerto Rico Indiana Hawaii Alaska Delaware Nebraska Massachusetts Oklahoma

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

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State Texas Louisiana South Carolina Mississippi Florida Alabama Puerto Rico Kentucky Indiana California Georgia Tennessee Hawaii Illinois Kansas New Jersey Pennsylvania Virginia Massachusetts Michigan Alaska Arizona Wisconsin Washington Ohio


Appendix C

Top 25 States by Type of FTZ Activity Warehouse/Distribution Activity Merchandise Received 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

State Louisiana Texas California Florida Maryland Georgia South Carolina New Jersey Puerto Rico Kentucky Pennsylvania Michigan Illinois Tennessee Alaska Ohio Washington Indiana Massachusetts Hawaii Colorado Arizona Minnesota Iowa Missouri

Manufacturing/Production Activity

Exports 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Merchandise Received

State Texas Florida Georgia South Carolina California Illinois Hawaii Pennsylvania Tennessee Massachusetts Alaska Michigan New Jersey Ohio New Mexico Colorado Maryland Puerto Rico New York Kentucky Washington Indiana Arizona Louisiana Missouri

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

10

State Texas Louisiana California Illinois Pennsylvania Kentucky New Jersey Mississippi Ohio Alabama South Carolina Tennessee Washington Indiana Hawaii Michigan Puerto Rico Delaware Nebraska Georgia Alaska Oklahoma Kansas Virginia New York

Exports 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

State Texas Louisiana South Carolina Mississippi Alabama Puerto Rico Kentucky Indiana Tennessee California Kansas Virginia Hawaii New Jersey Georgia Arizona Wisconsin Washington Michigan New York Nebraska Illinois Alaska Missouri Oklahoma


Appendix C

Top 25 by Zone (Warehouse/Distribution Activity) Merchandise Received 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Zone 84 68 74 168 38 25 26 49 29 144 70 202 7 50 205 160 86 35 39 64 114 21 62 79 148

Exports

Location Houston, Texas El Paso, Texas Baltimore, Maryland Dallas/Fort Worth, Texas Spartanburg County, South Carolina Broward County, Florida Atlanta, Georgia Newark/Elizabeth, New Jersey Louisville, Kentucky Brunswick, Georgia Detroit, Michigan Los Angeles, California Mayaguez, Puerto Rico Long Beach, California Port Hueneme, California Anchorage, Alaska Tacoma, Washington Philadelphia, Pennsylvania Dallas/Fort Worth, Texas Jacksonville, Florida Peoria, Illinois Dorchester County, South Carolina Brownsville, Texas Tampa, Florida Knoxville, Tennessee

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

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Zone 25 68 26 62 114 38 94 84 9 148 27 32 257 35 21 42 160 144 153 49 197 143 123 39 70

Location Broward County, Florida El Paso, Texas Atlanta, Georgia Brownsville, Texas Peoria, Illinois Spartanburg County, South Carolina Laredo, Texas Houston, Texas Honolulu, Hawaii Knoxville, Tennessee Boston, Massachusetts Miami, Florida Imperial County, California Philadelphia, Pennsylvania Dorchester County, South Carolina Orlando, Florida Anchorage, Alaska Brunswick, Georgia San Diego, California Newark/Elizabeth, New Jersey Dona Ana County, New Mexico Sacramento, California Denver, Colorado Dallas/Fort Worth, Texas Detroit, Michigan


Appendix C

Top 25 Manufacturing/Production Operations Merchandise Received 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Zone 84O 154A 124E 115B 35C 84J 122L 87B 149C 116A 92D 84Q 122I 49E 124F 84P 202B 122J 87A 3B 2I 47B 146D 124C 38A

Exports

Company Exxon Mobil Corporation ExxonMobil Oil Corporation Marathon Petroleum Company LP ExxonMobil Oil Corporation Sunoco Inc. Shell Oil Company Flint Hills Resources, LP CITGO Petroleum Corporation ConocoPhillips Company Motiva Enterprises, LLC Chevron Products Company Equistar Chemicals LP Citgo Refining ConocoPhillips Company Motiva Enterprises, LLC Houston Refining LP Chevron Products Company Valero Refining - Texas, LP Phillips 66 Company Chevron Corporation ConocoPhillips Company Marathon Petroleum Company Marathon Petroleum Company LP Motiva Enterprises LLC BMW Manufacturing Company, LLC

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

12

Zone 38A 92D 124E 116C 98A 122I 7K 84J 87B 177A 199C 124A 2I 47C 84H 29E 84O 78A 84N 84F 115B 161C 122J 20E 154A

Company BMW Manufacturing Company, LLC Chevron Products Company Marathon Petroleum Company LP Premcor Refining Group Inc. Mercedes-Benz U.S. International Citgo Refining Lilly del Caribe, Inc. Shell Oil Company CITGO Petroleum Corporation Bristol-Myers Squibb Company Valero Refining - Texas, LP Valero Refining-New Orleans, LLC ConocoPhillips Company GE – Aviation Varco Shaffer, Inc. Toyota Motor Manufacturing Kentucky Exxon Mobil Corporation Nissan North America, Inc. Pasadena Refining System Valero Refining - Texas, LP ExxonMobil Oil Corporation Hawker BeechCraft Corporation Valero Refining - Texas, LP STIHL Inc. ExxonMobil Oil Corporation


Appendix D

APPENDIX D: FTZ ACTIVITY BY STATE

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Appendix D

ALABAMA

TOP FOREIGN-STATUS PRODUCTS BY VALUE

STATE SUMMARY

Vehicle Parts (66%)

Merchandise Received:

Oil/Petroleum (30%) Machinery/Equipment (3%) Tobacco (1%)

$10,000-25,000 mil

Exports:

$1,000-5,000 mil

Total Shipments

$10,000-25,000 mil

Employees

12,001-13,000

Chemicals (