County Executive Falk Announces Support to Move Ahead on Next Step in Seeking Foreign Trade Zone Status at Dane County Regional Airport
May 30, 2003
Sharyn Wisniewski, 267-8823
Dane County Executive Kathleen Falk today announced that support in the business community and the potential for creating more jobs in Dane County means the Dane County Regional Airport will move ahead with plans to establish a Foreign Trade Zone at the Airport.
“Creating jobs for our hard-working Dane County citizens, and further boosting our position in the global economy is why we are here today,” Falk said at an afternoon press conference at the airport. “We need to be forward thinking, and forward moving to compete in today’s competitive global economy.
A Foreign Trade Zone is a secure area located in or near a U.S. customs ports of entry—such as an airport or seaport. Businesses affiliated with a Foreign Trade Zone receive certain benefits relating to import duties and customs fees.
“I am pleased to have with us today, representatives of Fiskars, Trek Bicycle, Famous Footwear, Swiss Colony, Capitol Warehousing, Pacific Cycle and Datex Ohmeda. Their interest in this initiative and commitment to our regional economy is very much appreciated,” said Falk
Last year Falk announced that the Dane County Regional Airport was taking the first steps to determine if there was business interest in further pursuing Foreign Trade Zone status at the airport.
The results of that first step were announced today in a Feasibility Study, conducted by Bright Consulting, Inc., For the study, thousands of companies were contacted, hundreds of companies expressed interest, and based on preliminary discussion, dozens could benefit from a local Foreign Trade Zone.
Support has also been forthcoming from statewide organizations such as Wisconsin Manufacturers and Commerce, the Wisconsin Economic Development Association, the Wisconsin Technology Council and locally, the Greater Madison Chamber of Commerce.
A 42-member E-Advisory Council representing labor, business, economic development and government provided advice and a sounding board in development of the Feasibility Study.
“The study told us that the region has a number of businesses that potentially would benefit from staying here, or expanding all, or part of their operations here, bringing dollars and jobs into our county,” said Falk.
“Today I am announcing our plan to move ahead with the next step to conduct the required economic analysis, and develop a federal application for a new trade zone. Our airport is both a transportation and an economic hub, and I am pleased with the airport’s leadership on this global frontier,” said Falk.
According to the feasibility study, the entire State of Wisconsin is underserved by the Foreign Trade Zone program. Wisconsin’s use of FTZs ranks near the bottom nationally and regionally, according to the Wisconsin Department of Commerce. There are currently two FTZs in Wisconsin, located in Green Bay and Milwaukee.
The Dane County Regional Airport’s FTZ would encompass an eight county region for prospective trade zone users. The South Central Wisconsin region is home to 43,000 companies and 900,000 people in Dane, Jefferson, Columbia, Dodge,Sauk, Rock, Green, and Iowa counties. Preliminary estimates suggest 12 to 36 companies in the region may benefit from a South Central Wisconsin trade zone. Typically, companies conduct a confidential financial analysis to determine the cost basis for participating in a zone.
Here is an example of how a company may benefit by being in a FTZ: A company produces a medical device here in Wisconsin that has some parts imported from Japan. If we have a Foreign Trade Zone, the manufacturer can bring material into a Foreign Trade Zone port in Seattle, and transport it to our Trade Zone in South Central Wisconsin for manufacturing. But the material does not technically "enter" the US. for purposes of customs, until it leaves our Foreign Trade Zone.
One benefit is that the company pays no tariffs until the product actually enters the U.S. by leaving the Wisconsin Foreign Trade Zone. In some cases, tariffs are even reduced or eliminated. Second, the company could shave supply chain time by days because of efficiencies inherent in zone to zone transfers. The impact of cutting two days from a supply chain, and delaying the impact of tariffs for days, weeks or even months can be substantial
Smaller companies might simply use warehouse space in the zone—importing material from around the world but storing it until needed for sale or use in making a product.
The proposed new FTZ is also receiving support from Senator Russ Feingold, Senator Herb Kohl, Representative Tammy Baldwin, Mayor Dave Cieslewicz, and the Wisconsin Counties Association. In addition, a number of local communities have passed resolutions in support, such as, Fitchburg, Middleton, Deforest and the Town of Windsor.
The Dane County Regional Airport is the official entity seeking status to operate a Foreign Trade Zone. The cost of the feasibility study and application is being paid with airport funds, generated through airport operations, and involves no tax levy
President Franklin Delano Roosevelt started the program about 70 years ago with the intention of keeping jobs in America in an ever fluid trade environment. The program is still relevant today. Most major ports of entry have trade zones. There are hundreds of zones throughout the United States and currently two in Wisconsin.
This assessment is the first of several steps toward consideration of a zone in this region. The next step is to conduct an economic impact analysis, and then make formal application to the Department of Commerce in Washington, DC. Zone structure, financing, governance and operations are also to be further considered.
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