GUIDELINES FOR GRANTEES/OPERATORS ON REPORTING ECONOMIC EFFECTS



The information below is provided to assist FTZ grantees in reporting on the economic effects of production activity under zone procedures in the summary/narrative questions.

  • Briefly summarize the following information with respect to the economic effects related to the use of zone procedures (provide numerical data as appropriate):
    • New or maintained U.S. production and employment
    • Production shifted to U.S. from abroad
    • Import displacement
    • Export increases
    • Domestic value added
    • Levels of domestic/foreign sourcing
    • Other

  • Explain how expectations have been realized since activation in terms of the above, using specific numerical data (ranges and approximations may be used), and note how zone procedures contributed. Your discussion should include any of the following points that apply to your situation:
    • Current international competitiveness environment with regard to the industry, noting:
      • Import penetration levels
      • Cost advantages of offshore production (including customs treatment)
      • Plants abroad with similar production capabilities, including affiliated plants

    • Effects of zone procedures on plantís competitiveness compared with foreign plants in terms of:
      • Unit production costs
      • Overall plant cost reduction efforts
      • Other

    • Resulting direct effects on plant activity because of zone savings:
      • Plant production levels (provide % change figures)
      • Plant exports (indicate change in % if production or in absolute terms)
      • Maintenance of plant activity in competition with foreign plants
      • Ability to bid for new production activity with foreign plants (provide instances where manufacture of specific products was transferred to U.S. plant)
      • Other

    • Indirect but related changes at the plant:
      • Plant expansion
      • Plant modernization
      • Investment in on-site fabrication and value added facilities
      • Adding of design, R&D activities
      • Investment in certifying additional domestic suppliers

    • Overall effect on plant employment (maintained or changed)
    • Changes in plant sourcing/value added patterns:
      • Changes in domestic sourcing (as a % of total)
      • Changes in foreign sourcing and basis for continued foreign sourcing
      • Effect of zone savings on sourcing decisions
      • Examples of components formerly sourced abroad that are currently purchased from domestic suppliers
      • Changes in overall U.S. value added levels, noting the role of on-site value added activity

  • Describe significant changes during the past year.

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