Aerotropolis Americas Live: Facilitating Growth through Trade Alliances and Foreign Trade Zones

The development of mutually beneficial international partnerships can be challenging. These cross border ties serve as the key drivers of both regional and international economic development and a gateway for increased trade opportunities.

• Advantages and impact of the free trade zone.
• Issues and challenges when introducing team into the country.
• Legislation issues & how to overcome these.

Moderator: Karl Zavitjovsky, Director of Economic Development, City of Dallas.

• Bill Methenitis, Global Director of Customs and International Trade, Ernst & Young.
• Samuel Lin, CEO, Taoyuan International Airport Corporation Ltd. (TAC)
• Daniel Swart, Office Director, The North Texas US Export US Commerce Department.
• Vincent Gollain, Director and Chief Economic Development Officer, Paris Region Economic Development Agency.
• Steve Boecking, Vice President, Hillwood Properties.

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Moderator: Karl Zavitkovsky (KV)
Speakers: Bill Methenitis (BM), Samuel Lin (SL), Daniel Swart (DS), Vincent Gollain (VG), Steve Boecking (SB)

What is a US Foreign trade zone?

SB - It's a specially designated area by the government that allows specific economic privileges such as duty benefits, delayed payment of duty, eliminating or reducing duty.
- you can reduce fees to customs as you import
- it can cut time in your supply chain which can be worth millions of dollars

How do you set one up?

SB - A non-profit organisation first has to apply for an FTZ to be set up.
- once that is done then you can attract companies into that area.
- a new process called an 'alternative site framework' allows for any building in the metroplex to apply for FTZ status in their current building to avoid relocation.
- applications are now processed within 30 days in the new system

How does a non-US FTZ differ?

BM - all of the benefits are applicable in most FTZs around the world
- but there's also Value Added Tax benefits
- some places have very liberal currency exchange rules - such as Shanghai which has just introduced a new package of benefits which has boosted the value of property in the areas significantly.

What are some of the features of the Paris Charles de Gaulle FTZs?

VG - The airport area is very dynamic
- Aeroville has just opened at the airport, it's a mall with 16 restaurants and 200 shops
- we also have a number of commercial developments throughout the grounds
- 100,000 jobs have been created throughout the airport grounds in the last 12 years.
- Hubstart Paris Region is a nonprofit alliance to market the PCdG airport - we work together to market this area.

How do you attract investment in the area?

VG - Between 2008 and 2012 50 new companies have moved to the area creating 2,000 new jobs
- to welcome investors we have a base in the airport city, we can provide free services for them, and provide information.
- we want to increase international trade so have decided to develop a limited number of airports
- we have created a network of experts to work on the development

What is your MOU?

VG - to Promote and lobby together, to share knowledge and to evaluate our experiences

What is the FTZ policy in Taoyuan?

SL - Created an economic cooperation framework agreement in 2010 and developed the free economic pilot zones in 2013, currently executing by talent developed through education.
- 102 international and 45 mainland China cities
- Airport Park will be 2,000 hectares, the aerotropolis will provide 6,500 hectares in total connected by high speed rail, airport MRT and aerotropolis MRT commuter links
- FTZs encourage challenge and competition
- we plan to provide tax incentives and encourage free movement of people goods and money
- we want to remove the barriers to investment and trade

https://www.youtube.com/watch?v=z7k7gTJgl3Y

What areas are you targeting?

SL:

• Logistics
• Medical services
• Agriculture
• And more

How do you help companies navigate the FTZ system?

DS - we have a website with full information, and over 100 offices worldwide to help people understand the requirements. - our one remit is to help US companies overseas to prevent them getting into trouble when navigating the trade systems

What are some of the biggest mistakes of exporters?

DS - In my 20 years in this business I've seen small companies make a couple of sales, then they don't get paid and they give up and 'say I'm not going to do business abroad'. It's important to know who you're doing business with. Call us and we'll tell you if that person is a good guy or a bad guy.
- you can insure your receivables for about 60 cents on your dollar.
- bigger companies tend to have big egos and don't necessarily want to take the help that's on offer - take it, it will get you out of trouble.

Questions from the audience

How do you apply for FTZs?

• the process in the US is a bit more complicated than elsewhere.
• the US govt passes authority to a grantee , find out who the grantee is for your area and they'll see you through the process.

What can attract businesses other than customs and duties relaxations?

• these are the biggest benefits
• in Texas all of your business tax is eliminated on goods imported
• customs tax can be dramatically reduced
• alot of supply chain advantages, by speeding it up by around a day at a time. That can save $1m dollars if that's what it costs you to process in a day
• some people are afraid to let customs in, but if they are let in they can help

BM - "If you ever had a teenager and you've thought 'if you just let me in I could help you'...that's what it's like for customs"