THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Monday, April 1, 1996 TAG: 9603290015
SECTION: FRONT PAGE: A6 EDITION: FINAL
TYPE: Editorial
LENGTH: Medium: 53 lines
With every power at its command, the commonwealth should back the Virginia Port Authority's attempt to expand its foreign-trade zone from 22.5 to more than 3,000 acres.
Such a move would encourage foreign manufacturers to assemble products here and would increase port traffic. It would be a significant step in Hampton Roads' ongoing transition from a defense-based economy to a commercial one. It would bring more jobs.
Expansion of the foreign-trade zone was one of Gov. George F. Allen's campaign pledges, and he's working to keep it. The region's congressional delegation is sending letters in support of the expansion to the Foreign-Trades Zones Board, the panel whose approval is required. That panel is associated with the U.S. Department of Commerce. Staff writer Christopher Dinsmore reported last Wednesday that the approval process could take 10 months.
According to the application to expand the trade zone, the existing space is ``wholly inadequate to handle the manufacturing, technology and research firms that are needed to convert Hampton Roads from a defense-based economy to an internationally competitive center for high value-added industry.''
Foreign-trade zones, though on U.S. property, are legally outside U.S. Customs territory. Foreign firms can export goods to the zones without paying import duties. Within the zones, the imported goods can be stored, repackaged, mixed or used to make another product. Import duties are paid only when the goods leave the zones for domestic consumption.
Foreign companies save money by delaying payment of duties or by assembling goods that have a lower duty payment than the sum of their parts. Thus, the companies are encouraged to do more business here. Some car manufacturers, for example, assemble their vehicles in foreign-trade zones because the import duty on a vehicle is less than the sum of the duties on the parts would be.
Local taxes still are paid, not to mention local wages, so local governments benefit.
Besides the port's three cargo terminals in Norfolk, Portsmouth and Newport News, expansion would include sites in Suffolk, Chesapeake, Portsmouth and the Virginia Inland Port in Front Royal in the Shenandoah Valley.
Obviously a region should milk its geographical advantages for all they're worth. Virginia has in Hampton Roads fantastic natural ports, ably managed by the Virginia Port Authority. Expanding the foreign-trade zone would make the ports all the more valuable and bring jobs and tax revenue to the area.
Every effort should be made to gain approval for the zone expansion. by CNB