NORWICH – Local companies may benefit from new legislation passed into law last week. A bill – initially proposed by New York Assemblyman Clifford W. Crouch (R-Bainbridge) – has been signed into law by Governor Cuomo, giving Chenango County’s pharmaceutical companies and others the authority to apply to the federal government for the institution of a foreign trade zone.
A foreign trade zone is a federal program that gives companies the opportunity to delay or elude tariffs on imported and exported goods and raw materials used for the manufacturing process. Without such an agreement, many companies would be at a disadvantage in a market that is highly competitive.
“The way it is now, when a company brings ingredients or raw materials for its manufacturing process into the U.S. from another country, those materials may be subject to import duties,” said Commerce Chenango President Steve Craig. Companies within a foreign trade zone can delay paying taxes on raw materials until a finished product leaves the specified zone. “If the finished product were to be re-exported, then the charges would not apply,” he said.
According to Craig, the implication of a foreign trade zone in Chenango County is welcome news to larger companies such as North Norwich’s Norwich Pharmaceuticals, Inc. which will benefit from the new law in place because it allows the manufacturer to receive imported products and get them to market quickly.
The application for a foreign trade zone has not been legally accessible to companies within the county prior to the signing of this legislation. According to a press release, this new law will benefit local companies by allowing them a greater range of commerce in the global market.
“Several counties in the state already have these trade zones – establishing one in Chenango County will have a positive economic impact on our area,” said Assemblyman Crouch.
Counties that currently have foreign trade zones in place include Onondaga, where industries in the Syracuse area adhere to the arrangements of legislation that Crouch says give a competitive advantage. Craig said Chenango County can expect to see the impacts of this statute in the future, but the advantages may be delayed due to the lengthy application process through the federal government.
“We’re still exploring all of the implications of foreign trade zone status for Chenango County,” Craig said. “We should learn more over the coming weeks.”
Craig and Assemblyman Crouch agree that though it is currently uncertain how this new law will benefit other local industries, different companies will ultimately see the advantages as the foreign trade zone may attract potential outside businesses.
“This is a first step on a long road to economic recovery,” said Crouch.