Foreign Trade Zone Growth Primarily Benefits Users Who Import for Domestic Commerce

Pursuant to a congressional request, GAO assessed foreign trade zone operations authorized under the Foreign Trade Zone Act.

This act authorizes the duty-free entry of imports into a designated U.S. geographic area, called a foreign trade zone. Such goods, which may be further processed in the zones, may then be exported without incurring customs duties, or may be entered into the customs territory of the United States upon payment of applicable duties. GAO found that: (1) the growth in the number of zones and the resulting dollar value of business activity has been substantial and continuous over the past 10 years; (2) while the zones were initially expected primarily to benefit the reexport and transshipment trade, more than 80 percent of the zone products have entered into domestic commerce; and (3) the zones' impact on U.S. employment is not conclusive.