FTZ Economic Impact Study
Conducted by the Trade Partnership, the 2019 FTZ Economic Impact Study (“The U.S. Foreign-Trade Zones Program: Economic Benefits to U.S. Communities”) provides quantitative and qualitative data on the impact of FTZs on economic activity and jobs in localities with operational zones as well as the economic effects of FTZs on the communities in which the zones operate, which are referred to as Zone Economic Communities (ZECs).
Key findings supported by the data collected for 251 ZECS include:
- Employment, wages, and value-added increased in the broader zone community following the establishment of an FTZ. Those gains are the greatest in the early years for employment and wages, and throughout the period for value added. This increased economic activity is also evident once a decision is made to form an FTZ.
- The establishment of an FTZ causes a positive increase in employment growth in the surrounding ZEC (up 0.2 percentage points), wage growth (up 0.4 percentage points), and value-added growth (up 0.3 percentage points), typically eight years and later, after establishment of the FTZ. The impacts begin sooner, in years six and later, for wages and value added in small- and medium sized ZECs.
- Company access to FTZ benefits has a substantial ripple effects through the companies’ supply chains, which are typically located nearby. The study cites BMW Manufacturing in South Carolina, ExxonMobil Corporation in Louisiana, and Yamaha Motor Manufacturing Corporation in Georgia as important examples of this effect.