The Greater Des Moines Partnership has received approval for a new type of foreign trade zone (FTZ) that development officials say will provide a more flexible tool for Central Iowa companies seeking to expand international trade.
Duty-free treatment is accorded items that are processed in FTZs and then re-exported, and duty payment is deferred on items until they are brought out of the FTZ for sale in the U.S. market. Under a new framework known as the Alternative Site Framework, the Iowa Foreign Trade Zone will encompass 29 counties in a 50-mile radius around Des Moines.
The Partnership will administer the expanded Iowa Foreign Trade Zone, which will include the counties of Adair, Adams, Audubon, Boone, Calhoun, Carroll, Cass, Clarke, Dallas, Decatur, Greene, Guthrie, Hamilton, Hardin, Jasper, Lucas, Madison, Mahaska, Marion, Marshall, Monroe, Polk, Poweshiek, Ringgold, Story, Union, Warren, Wayne, and Webster.
“The impact of the FTZ Alternative Site Framework will allow existing companies to set up ‘usage-driven’ sites in 30 days, allowing them to respond rapidly to foreign direct investment opportunities,” said David Maahs, the Partnership’s executive vice president for regional economic development, in a release. “This will enable them to better compete globally, expanding their market and growing their companies’ sales and workforce.”
In related news, the U.S. Small Business Administration announced Monday that Iowa will receive more than $109,000 through the State Trade and Export Promotion (STEP) initiative, a federal program launched last year under the Small Business Jobs Act. The funding is part of $30 million awarded to 47 states, four territories and the District of Columbia.
The new foreign trade zone framework was authorized by the U.S. Commerce Department in 2009; the Partnership applied to use it in January.
“Part of the reason we’re going to this new format is that many of the metropolitan areas we compete with have already moved to this framework,” he said.
Greater Des Moines has had a foreign trade zone since the mid-1980s, but the designated warehouse in Clive was sparsely used. However, Winnebago Corp. established two subzones, one in Forest City and another in Charles City, that it used extensively.
Maahs said the Alternative Site Framework enables the same type of subzones to be set up, but much more quickly and easily. Annual fees should range from $2,500 to $5,000 for businesses to designate a subzone; companies will also incur initial legal expenses and some maintenance costs, he said.
For more information or to apply to use the Foreign Trade Zone, contact David Maahs at the Greater Des Moines Partnership, firstname.lastname@example.org