For the benefit of both exporters and importers, the value of Free Trade Zones cannot be ignored. Free Trade Zones have existed for thousands of years, and began operations in the ancient world. The first free trade zones were considered to be trade initiated approximately 1900 years BCE, or about 3,900 years ago, when an Assyrian merchant colony at Kadesh in Cappadocia established international prominence in spice production and distribution, and about the same time as Arabian Nomads established a continuing trade in spices and silks, between the Orient and the Islamic world by domesticating the dromedary camel to effect their transportation. Later, the silk road Camel Trade was dramatically expanded when Han Dynsasty Chinese envoy, Zhang Ian, traveled extensively expanding beyond Central Asia, helping Chinese goods make inroads into distribution through India, Persia and the Roman Empire, and bring return goods from those regions to the Orient.
Modern Free-trade zones, also called foreign-trade zones, were formerly known as free ports, and are recognized as an area within which goods may be landed, handled, manufactured or reconfigured, and re-exported without the intervention of the customs authorities. Stored goods are in a limbo regarding customs duty, and only when the goods are moved to consumers within the country in which the zone is located do they become subject to the prevailing customs duties. Often, the duties are reduced within the zones. Free-trade zones are principally organized around major seaports, international airports, and national frontiers—areas with many geographic advantages for trade. Examples are numerous, and in virtually every country today, and improved devices such as the bonded warehouse and associated systems have allowed the expansion of Free Trade Zone benefits even so far as to include individual factories and their storage facilities. Ports, Truck Depots, Airports, Warehouses, even Train, Bus, and Barge Transportation depots can be appended into Free Trade Zone usage, and the benefits for the local economy, and the ability of the government to more fully support their citizens, can be quite vast. In Argentina, for example, Synergence has established a national program that brings food from the growers nationally or internationally, directly to the people, with the benefit that it helps to minimize the inflation that has been horrifically affecting the poorer families in the country, by providing an independent food network that provides food supplies at approximately 50% of the normal cost to consumers.
The primary purpose of a free-trade zone is to remove from a seaport, airport, or border those hindrances to trade caused by high tariffs and complex customs regulations. Among the advantages of the system are the quicker turnaround of ships and planes, through the reduction in waiting for the formalities of customs examination, and also the ability to fabricate, refinish, and store goods freely. It allows companies to determine at which stage of production they wish to submit to customs examination and duty, making the zones essential to many global organizations. Oil, Automobiles, and large multinational organizations all use the Free Trade Zone optimization and cost reduction to fulfill their goals, and in the modern era, these tools are available to virtually all companies who investigate the benefits and find them of value.
The number of worldwide free-trade zones has proliferated in the late 20th century. In the United States, free-trade zones were first authorized in 1934, and to date, there are 183 Foreign Trade Zones established and operating, and over 257 that have been established. Synergence Ventures Corporation has extensive experience with Free Trade Zones controlling 4 Trade Zones in Argentina, and establishing reciprocal agreements with the other 19 Free Trade Zones in the country. We also have access to all FTZ internationally through NGO status, and can work seamlessly for our customers globally.
Free Trade Zones are not simply formed to benefit their members regarding tax reduction, but can completely change the face of the Commerce Interior and Commerce Exterior of any country. Commerce Interior is concerned with maintaining the proper mix of food that must be kept within a country to feed it’s people, and Commerce Exterior is concerned with insuring that all food unneeded in the local environment is efficiently exported to neighboring or distant countries who need. Import/Export in other words, and virtually all countries have a Minister level position for each within the Government who is responsible for balancing this requirement for the people.
The first video below is the latest of over 20 years worth of monthly updates on the Canarios de Campo y Mar, the Free Trade Zone of the Canary Islands. Should you or your company have an interest in how the Free Trade Zone can benefit your company, cooperatives, and Country, we can be reached for discussion by clicking here.