Think Tank Scholars Advise FTZs on How to Advance Goals
National Association of Foreign-Trade Zones President Erik Autor told two think tank scholars Feb. 11 that the organization's goal is to get Congress and other policymakers to see how the FTZ program can fit in the broader trade policy agenda. The trade group was disappointed that the USMCA technical fixes returned to the NAFTA rules of origin approach for FTZs, and wants to ensure that language is not repeated in any future free trade agreements, he said during his group's virtual summit. NAFTZ believes that allowing goods constructed in FTZs to receive USMCA benefits, if they meet the rules of origin, supports the new administration's Made in America ethos.
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Center for Strategic and International Studies scholar Bill Reinsch said U.S. trade representative nominee Katherine Tai knows about FTZs, which is good for the group, but he doesn't know if Commerce Department secretary nominee Gina Raimondo is as familiar. He advised that if there are any FTZs in Rhode Island, now would be a good time to speak to Raimondo, that state's governor.
CSIS scholar Scott Miller said, “You could use a little branding. It’s not obvious to the lay person what a free trade zone is, why you're good for the country. Think about what’s in it for these officials, how does it simplify their life, how does it make for better policy?”
In fact, FTZ is an abbreviation of foreign-trade zone, not free trade zone, further proving the point Miller was making about branding.
Reinsch added that “foreign-trade zones, you want to remind people, you can be part of onshoring, if you will.”
When International Trade Today asked how Democrats might change the Generalized System of Preferences benefits program, Reinsch said he's “horribly troubled” by the possibility that they will put too many conditions on it. He said there was a special program for apparel for Pakistan, “and in the end, my senator loaded so many restrictions that it never amounted to anything. There’s a real danger of that happening again. I’m depressed about it.”
Both Reinsch and Miller said they don't expect apparel to be added to the GSP benefits except for least developed countries, as an incentive for countries to accept the stricter eligibility requirements.
“Anything that still retains any level of tariff protection” quickly becomes sensitive, Miller said. “You can cause yourself more problems” in trying to expand benefits under GSP.