Editorial: Trade zone status would benefit Caldwell's economy
News that Caldwell County is applying to join the Charlotte area’s foreign trade zone is good news for the county as well as for any manufacturer in the county that has customers overseas.
Approval by the U.S. Foreign Trade Zone Board would extend a number of tax advantages to manufacturers here. One of the main advantages is that they could bring raw materials into the U.S. without paying taxes on them, and then export their products back overseas without having paid that tax, which would make the products more competitive. Products made in a foreign trade zone are considered to be outside the commerce of the U.S. unless they are to be sold in the U.S., at which point they are taxed.
While there would be some level of initial tax revenue loss from that, it lowers the price of U.S.-produced goods sold overseas, making them more competitive. When competing products are closer on price, quality becomes a greater determining factor in which company wins business, so a company then rises or falls based on how well it is doing its job.
Caldwell County already is home to a number of manufacturers that could benefit from this trade zone, which in turn could mean more business for them, and possibly more jobs later.
The zone also would become another element of the pitch that local officials make when trying to lure manufacturers. Caldwell would not be alone in having zone status — the Charlotte trade zone currently covers four counties, and the Charlotte Regional Partnership is seeking a status extending to a total of 17 counties, including Caldwell — but being one of a kind is not necessary. It would add a good extra to the total package that already has been enticing enough to bring a growing diversity to the local economy.
If there are downsides to inclusion in a foreign trade zone, they elude us. The cost to Caldwell is minimal — a $2,500 fee upon application, and an annual $1,000 fee that covers marketing and operations of the zone.
Here’s hoping for swift approval.