NORWICH – Nearly two years after the initial groundwork was laid to make Chenango County one of only nine other counties in New York State a Foreign-Trade Zone, Development Chenango is now touting the two-year endeavor a success.
Development Chenango, the economic development arm of Commerce Chenango, announced its newfound status during a press conference held Thursday. Development Chenango Executive Director Steve Craig called this a prime opportunity for local businesses to take advantage of other opportunities that allow them to better compete in a global market.
“This is a great opportunity for Chenango County. It is great for the businesses that are here, and for the ones that we hope will come here,” said Craig, noting that Chenango is only the tenth county in the state to achieve Foreign-Trade Zone standing. “This designation really makes us a member of a rather exclusive club,” he added. “It’s one more tool we can use at Chenango Economic Development to recruit new businesses.”
A foreign-trade zone is a designated site for the import and export of goods used in manufacturing. Although the site is located in the United States (within 60 miles and/or a 90 minute drive time from a port of entry, such as an airport), goods stored or produced there are considered “outside the commerce of the U.S,” which allows businesses to import and export those goods in the U.S. with the same benefits as being outside the U.S. and therefore, can avoid the costly Customs duties and tariffs usually tied to them.
Development Chenango’s application for a foreign-trade zone - submitted for review in July, 2012 - was processed faster than many local officials expected, which is good news for businesses like Norwich Pharmaceuticals and Norwich-based CWS that plan to utilize the benefits of the Foreign-Trade Zone in the near future.
According Rebecca Sands, Commerce Chenango’s economic development specialist, products used by such manufacturers to create a final product all have different tariff codes and duty fees.
“The final product also has a separate tariff code and duty fee,” she explained. However, the tariff on the final product is often less than tariffs on materials used to create the product, she said, meaning businesses within the Foreign-Trade Zone that sell their products in the U.S. will pay a lower duty fee and those that export their items will not pay any duty fees.
“This is something that we’re certainly excited about,” added Jason Lasicki, sales manager for CWS contract packaging services. “What this is going to do is allow us to overcome some of the geographical challenges of being in upstate [New York].”
Lasicki added that a foreign-trade zone status translates to more savings for CWS customers, who no longer have to pay high tariffs and other fees. It also expedites the production process because materials used for production move through customs at a quicker rate.