In 1934, the U.S. Congress passed the Foreign Trade Zones Act to expedite and encourage foreign commerce. The Act, as amended in 1950 to include manufacturing in zones, was designed to stimulate international trade and create jobs and investment in the United States.

A foreign-trade zone is a designated geographical area located within the United States, in or near a Customs port of entry, but considered to be outside U.S. Customs territory. Foreign and domestic merchandise within a foreign-trade zone is generally considered to be in international commerce.

Merchandise within a zone may be stored, sampled, repackaged, repaired, mixed, cleaned, manufactured, tested, relabeled, displayed, manipulated, processed, assembled, salvaged or destroyed.

A general-purpose zone is established for multiple activities by multiple users. It must be operated as a public utility and must be located within 60 statute miles or 90 minutes driving time from the outer limits of a U.S. Customs port of entry. A subzone is granted when a firm wants foreign-trade zone status for its own plant or facility, and when the existing general purpose zone cannot accommodate the firm’s proposed activity. Typically, subzones are designated for an individual company’s manufacturing operations.

• There are 2,500 firms actively engaged in zone activities.
• Over 340,000 people are employed at facilities operating under FTZ status.
• Approx. 62% of merchandise received in FTZs is domestic. Domestic status merchandise is of domestic origin but includes some foreign-origin goods on which Customs entry and duty payments have been made prior to zone admission.
• Total value of merchandise moving through FTZs is more than $410 billion annually.
• Exports from FTZs approximate $23 billion annually and are growing fast.
• All 50 states plus Puerto Rico have established FTZs. There are 272 General Purpose Zones and over 502 subzones in the U.S.