63rd Annual Report of the
Foreign-Trade Zones Board
to the Congress of the United States

for the fiscal year ended
September 30, 2001

REPORT OF THE EXECUTIVE SECRETARY

  During fiscal year 2001, the Foreign-Trade Zones (FTZ) Board issued 76 formal orders. The decisions included approvals for 8 new general-purpose zones and 23 new subzones. Authority was also granted for the expansion of 27 existing general-purpose zones. Other actions involved the granting of authority for revisions to zone plans, as well as approvals for new or increased manufacturing activity.¹ One application was withdrawn by the applicant.

  There were 146 FTZ projects fully active during the year, with subzones in operation in over 94 of them. The number of facilities using subzone status increased to 220, with 22 new ones initiating the use of FTZ procedures and 17 discontinuing.

  The combined value of shipments into general-purpose zones and subzones totaled $225.2 billion compared to $238.0 billion last year (Figure 1 and Appendix D). General-purpose sites received $29.5 billion in merchandise. Total shipments received at subzone sites amounted to $195.7 billion. Some 87 percent of zone activity took place at subzone facilities, which is consistent with the pattern of the past 15 years.²

          ____________________________________________________
          Merchandise Received      FY 2001 ($ bil)     FY 2000 ($ bil)
          General-purpose zones		29.5		28.2
          Subzones		              195.7	              209.9
          _____                                          _____                     _____
          Total                      	              225.2                       238.0
          ____________________________________________________

  Exports (shipments to foreign countries) from facilities operating under FTZ procedures amounted to $15.4 (Figure 2). The export figures do not include indirect exports involving FTZ merchandise which undergoes further processing in the United States at non-FTZ sites prior to export.

  Almost 330,000 persons were employed at over 2,300 firms that operated under FTZ status during the year. The main foreign-origin products received at zones are listed in Appendix E.

  Industries that continued to account for most zone manufacturing activity included the oil refining, auto, other motor vehicle, computer/office equipment and electronic product sectors. An estimated 62 percent of the shipments received at zones for use in manufacturing activity involved domestic status merchandise. The level of domestic status inputs used by FTZ operations indicates that FTZ activity tends to involve domestic operations that combine foreign inputs with significant domestic inputs. This reflects the fact that FTZ procedures serve as a means of rationalizing Customs treatment to assist domestic plants in their efforts to be internationally competitive.

  The Board received and filed 55 formal applications during the fiscal year. These proposals requested authority for 4 new general-purpose zones and 20 subzones, as well as authorization for expansion and new manufacturing at existing zone projects (Appendix F). In addition, over 70 cases were processed under the Board's less formal administrative procedures (Appendix G). The latter cases involved routine, non-controversial changes to zone projects such as boundary modifications and scope decisions.

   
(1)   Appendix A contains a list with a summary of each Board Order. Zone authority for manufacturing/processing activity was granted on a restricted basis in 9 cases, and activation limits were adopted in another 11. The main products covered by restrictions included crude oil, steel and hand tools. (back)

(2)   Appendices B and C contain figures on shipments into and out of general-purpose zones and subzones. Appendix D contains comparative statistics for the past 5 years. The figures represent the latest statistical data available from grantees. Some are still under review. Adjustments normally amount to less than one percent of aggregate shipments and would be reflected in next year's report. (back)

	1997	1998	1999	2000	2001
Merchandise Received
GP Zones	16.9	20.6	24.6	28.2	29.5
Subzones	160.9	136.5	149.0	209.9	195.7
Total	177.8	157.1	173.6	238.0	225.2
% Subzones	90%	87%	86%	88%	87%

Domestic Status Inputs*
GP Zones	6.3	8.5	11.1	15.0	15.6
Subzones	114.8	96.3	104.5	136.8	123.1
Total	121.2	104.8	115.7	151.8	138.6

Domestic Status Inputs Ratio

GP Zones .........	37%	41%	45%	53%	53%
Subzones	71%	71%	70%	65%	63%
Average	68%	67%	67%	64%	62%

Foreign Status Inputs
GP Zones	10.6	12.1	13.5	13.2	14.0
Subzones	46.1	40.2	44.5	73.1	72.6
Total	56.7	52.3	57.9	86.3	86.6

Exports**
GP Zones ...............	4.2	6.6	6.5	3.7	3.8
Subzones	12.7	10.3	10.3	11.0	11.6
Total	16.9	17.0	16.8	14.7	15.4

Exports/Foreign Status Inputs Ratio (%)

GP Zones ...........	40%	55%	48%	28%	27%
Subzones	28%	26%	23%	15%	16%
Average	30%	32%	29%	17%	18%

    
        Approved FTZ Projects	                219           226          232           231         238

  
        Active FTZ Projects***                  141          145          142            145         146 
        GP Zones                                        118          123          121           117         113
        Subzones                                         201          204          210           216         220

** Export figures are based on material inputs and do not include value added.

** Active projects have at least one site (including subzones) in operation.

Return to Top