In an increasingly globalized world with increasing trade and human travel, the where are foreign trade zones normally located by the central axis between nations and cities has also increased at exponential level. This has meant where are foreign trade zones normally located by the central axis nations and cities are involved either openly or clandestinely in a vicious trade war or competition.
It has also made nations or cities to grant incentives or subtle encouragement to potential investors and established businesses within their territories. These incentives could range from tax wavers, tax reliefs, ease in acquiring properties to the establishment of free trade zones. A Free Trade Zone FTZ is an area in a country where goods may be traded without any barriers imposed by customs authorities.
It could also refer to a specially designated area within a country where normal trade barriers like quotas and tariffs are removed and the bureaucratic bottlenecks are narrowed in order to attract new businesses and foreign investments.
In the same vein, a Free Trade Zone can be defined as a labour-intensive manufacturing hub, which involves the import of components and raw materials and the produced goods are exported to different countries. Similarly, Free Trade Zones have been defined as a geographic area where goods may be landed, handled, manufactured or reconfigured and re-exported without the intervention of the customs authorities.
In this regard, 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. Free Trade Zones are usually developed in places that are geographically advantageous for trade.
Places near international airports, seaports and the like are preferred for developing Free Trade Zones. Generally, Free Trade Zones around the world often provide special exemptions from normal immigration procedures and foreign investment restrictions as well as other features.
Free Trade Zones can also be established where a group of countries agree to reduce or eliminate trade barriers. In this case, it would be an intensive manufacturing center involving the import and export of raw materials or products. Free Trade Zones range from specific-purpose manufacturing facilities to areas where legal systems and economic regulations vary from the normal provisions of the country concerned.
Free zones may reduce taxes, customs duties and regulatory requirements for registration of businesses. One of the main purposes of the Where are foreign trade zones normally located by the central axis Trade Zone is to develop the economy of that location by providing more job opportunities, business options, manufacturing options, etc.
These zones are mostly used by transnational corporations for establishing factories for the manufacturing of several goods. The goods depend on the availability of the raw materials, skilled labour and well-equipped technical staff. The main idea behind the creation of Free Trade Zones is to facilitate cross-border trade by removing obstacles imposed by customs regulations. Free Trade Zones ensure faster turnaround of planes and ships by lowering custom related formalities.
Free Trade Zones prove to be beneficial both for the importers where are foreign trade zones normally located by the central axis exporters, as these zones are designed to reduce labour cost and tax related expenditures. Free Trade Zones help the traders to utilize the available business opportunities in the where are foreign trade zones normally located by the central axis possible way.
They promote export-oriented industries. These zones also help to increase foreign exchange earnings. International Free Trade Zones are placed mostly in developing countries.
Employment opportunities created by these zones help to reduce unemployment in less developed economies. It is therefore easy to understand why many developing countries have actively promoted the creation of such zones. Aside from simply providing much-needed employment, these designated areas also help generate more foreign currency, thus improving the position of the country concerned in terms of foreign exchange.
The setting up of Free Trade Zones have been criticized for encouraging an unfair advantage to multinational corporations with more economic liberty because they are able to manufacture in a low-cost base and export around the world, rather than indigenous firms.
A number of developing countries have allowed the local industrialists to set up units located within the Free Trade Zones in order to exploit the export-based incentives. Critics also view such zones as harmful to local businesses. They say that since these zones are friendly to foreign corporations, the inequality in the treatment of foreign businesses in comparison with local businesses has the tendency to hurt local industries.
Many countries have addressed this issue by creating programmes that may allow local businesses to operate in such areas or that may give them economic benefits to stimulate productivity and the creation of profits. Free Trade Zones are tools that companies use to increase their global competitiveness and play an important role in providing a level playing field when investment and production decisions are made.
They have been proven to be a successful trade programme by consistently creating and retaining jobs and capital investments. The following are some benefits that account for most of the companies that use the Free Trade Zone programme:. Over time, many Free Trade Zones have had disappointing outcomes. The one that comes to mind here is the Tinapa Free Trade Zone in Calabar, Nigeria which was poorly conceived and managed. Free Trade Zones that have failed around the world have been criticized for their macro and micro level constraints on businesses, bad labour practices and poor environmental records.
It has also been alleged that they have fallen prey to money launderers and drug traffickers, where are foreign trade zones normally located by the central axis to increase exports and provided little in the way of benefit to the host countries. However, some FTZs have been spectacularly successful, creating huge wealth, significant numbers of jobs and becoming starting points for industrialization, especially in developing countries.
For instance, Shenzhen which over the last 30 years has grown from a sleepy coastal hamlet into a Chinese city of 10 million inhabitants. The importance of Free Trade Zones cannot be over emphasized. The need to update legislation regulating Free Trade Zones especially in developing countries like Nigeria is extremely important.
Thank you for your time. Please remember to like and share this article for the benefit of others. Cedarwood Estate, Phase 3: Lekki Free Trade Zone axis. Paradise Gardens, Phase 1: Cedarwood Boulevard Estate, Ajah. The following are some benefits that account for most of the companies that use the Free Trade Zone programme: Relief from inverted tariffs Duty exemption on re-exports Duty elimination on waste, scrap and yield loss Weekly entry savings Duty deferral Over time, many Free Trade Zones have had disappointing outcomes.
The Lawyers Chronicle Thank you for your time.
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