Foreign-Trade Zones: A Factor in Manufacturing Employment
Abstract
Foreign-Trade Zones are areas in which companies can manipulate
their inputs and finished goods without paying any Customs duties or
government excise taxes on the foreign parts and merchandise. This
being the case, zones help u.s.-based manufacturers maintain their cost
competitiveness in the international and domestic markets by providing a
location where the firms can obtain inputs at the lowest possible cost.
Often, these components are foreign goods that would otherwise have
quota restrictions or tariffs applied which increase their cost.
The benefits of the Foreign-Trade Zones program are not
restricted to the manufacturers and other companies that take advantage
of the opportunities afforded to them by the Zones. The economic
welfare of the entire nation is influenced by this program which, its
proponents assert, promotes the increase of capital investment and the
stabilization and the creation of employment opportunities in the United
states.
The focus of the following statistical analysis is the
employment growth rate in the manufacturing sector of the economy. Of
the eight independent variables, particular interest is directed toward
the impact of Foreign-Trade Zones on the changes in the manufacturing
employment between 1983 and 1986. Conclusions to the analysis support
the assertions of the advocates of this trade program; with this data,
Zones are a positive force in the growth rate for manufacturing jobs.
Following the paper on Foreign-Trade Zones are materials
relating to the work accomplished by the author while an intern at the
Rockford council of 100. These materials begin with a work journal
which explains the various activities, tasks and projects addressed and
CXll11pleted during the Fall of 1989. The next section provides examples
of the work undertaken such as letters written in response to requests
for information, demographics compiled on the City of Rockford and the
surrounding area, and surveys developed to maintain current listings of
available land and buildings and of industrial parks in the area.
The last section to the paper is a thoughtful discussion of how
the work experience in economic development at the Council of 100
relates to the background and goals of this student. Economic
development approaches the market and its functions from a different
viewpoint than what one focuses on when studying Economics at Kalamazoo
College; each one emphasizes different components in the system. Both
the WFSIP and the previous career Development internships at the Council
of 100 were positive and encouraging experiences. Aggressively
marketing a city to attract new businesses to that area presents
interesting and compelling challenges which could certainly be one step
in my career's evolutionary path.