Added use sought for foreign trade zone ANNE ARUNDEL BUSINESS

December 03, 1992|By Liz Atwood | Liz Atwood,Staff Writer

Robert Schott is out to offer Maryland importers a legal way to avoid taxes and duties.

He wants to entice them to use the Foreign Trade Zone at Baltimore- Washington International Airport, where they can import and store goods without paying customs duties and taxes. And he wants to expand the boundaries of the zone to manufacturing sites to allow manufacturers to receive overseas parts without paying the fees.

The Foreign Trade Zone, one of three in Maryland, has existed for 11 years. But business customers use only 1,500 square feet of 37 acres in the zone.

"The concept is not well understood," says Mr. Schott, who runs the Foreign Trade Zone at BWI.

To remedy that, he is planning a series of seminars to educate importers, customs brokers and manufacturers in the state about the benefits of using free trade zones.

The effort to expand to manufacturing sites will help "take the zones out to the community," says Mr. Schott, who also operates a freight forwarding business at Dulles International Airport in Virginia.

Lee Connor of John S. Connor Inc., a Baltimore freight forwarding company, says extending the foreign trade zones to manufacturers makes sense. He says importers have little incentive to use foreign trade zones merely to store materials because they can avoid customs duties by using other mechanisms, such as bonded warehouses.

Manufacturers have more incentive to use foreign trade zones because it allows them to assemble products from duty-free imported parts. But most foreign trade zones don't have locations where the manufacturing or assembling can be done.

The concept of foreign trade zones has been slow to take off nationally since Congress first authorized them in 1934. Since then, the U.S. Department of Commerce has established 200 such zones, but only half of them are active, Mr. Schott says.

Maryland has two foreign trade zones in addition to the one at the airport. One is in Prince George's County and one on 126 acres at the Point Breeze Business Center on Broening Highway in Baltimore.

The Baltimore site, next to the Dundalk and Seagirt marine terminals, is considered one of the most successful foreign trade zones in the world, but it, too, is used mostly as a warehouse.

Stan Ward, general manager of that zone, says the success has depended upon its location adjacent to the port and upon the efforts of a sales staff to attract businesses to the zone.

But the foreign trade zone at the airport is at somewhat of a disadvantage, Mr. Schott concedes. Importers whose cargo arrives by sea are more apt to need the storage and warehouse services of a foreign trade zone than those whose cargo is rushed by air.

Mr. Schott says some businesses have shunned the foreign trade zones because they think the paperwork involved is not worth the trouble.

But he is convinced more businesses will use the zones once they learn more about them.

"There are plenty of customers in the Baltimore area that could benefit from zones," Mr. Schott says.

In addition to helping importers, a foreign trade zone also can boost the image of a city trying to attract international business, Mr. Schott says.

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