NORTH BAY – The U.S. Department of Commerce gave final approval to an application submitted by the Port of San Francisco last October to expand its Foreign Trade Zone (FTZ) No. 3 service area to include portions of Sonoma and Napa Counties, in addition to Contra Costa, Marin and Solano counties.
The former service area was limited to San Francisco and San Mateo counties.
“This is an excellent opportunity for North Bay businesses to enhance their competitiveness in the local economy,” said Ben Stone, Executive Director of the Sonoma County Economic Development Board.
“Three leading manufacturers, including local medical and technology firms, have expressed strong interest in becoming part of this zone. We are also conducting FTZ seminars and an Export University for local businesses to acquaint them with the new Foreign Trade Zone program.”
Over the years, the nationwide FTZ program has allowed American companies to obtain a more competitive position vis-a-vis their overseas counterparts, and to also help subsidize job growth. It does this by deferring, reducing or eliminating customs duties paid on imported goods by importers, distributors, manufacturers and processors.
“Foreign Trade Zones are one tool to reduce logistics costs, which translates into savings for a company’s bottom line and enhances their competitiveness in the global economy,” said Jim Maloney, Maritime Marketing Manager at the Port of San Francisco, grantee of FTZ No. 3.
All firms within the newly approved zone who wish to participate can secure FTZ site status under the Alternative Site Framework (ASF) program within 30 to 45 days from the receipt of their application. Without this accelerated program the process has taken up to 8-12 months in the past.
Concern has arisen in the business community as to how the geographical boundary was established for the FTZ, specifically, why towns such as Cloverdale and Calistoga – for examples -- were excluded.
According to Mr. Maloney, the U.S. Customs Service typically limits the range of an FTZ to locations 60 road miles or within a 90-minute commute from the port city.
“Should firms in Cloverdale, Calistoga or other communities outside of the Alternative Site Framework wish to participate in the new FTZ they can apply as a sub-zone and pay annual dues to the port. Approval of sub-zone status usually takes about 10 months.”