The Industrial Development Board announced plans Tuesday (Feb. 5) to pursue a Foreign Trade Zone program for Cannon County.
"If you are in a Foreign Trade Zone, it really helps give local companies a good, competitive advantage," said IDB vice-chairman Doug Bodary.
"What I am suggesting is that we could be listed as a sub-section of Davidson County," Bodary told IDB members. For example, Nissan Motor Manufact-uring in Smyrna is a sub-section.
Nashville's area Foreign Trade Zone was established in 1983. FTZ's are areas designated by the U.S. Department of Commerce as being outside of U.S. Customs territory. FTZ's assist companies in delaying, reducing or eliminating custom duties.
"If we were a duty free zone, it would be very beneficial for Global," said David Vance, of Global Industrial Components, located on South College Street.
A chief benefit of the FTZ is that businesses within the zone would not have to pay custom duties on materials that are received at the plant until after they are assembled into a usable product and shipped out of the zone.
A FTZ can be used in several different ways. For example, there's no bond or duty payment while goods are in the zone. Foreign goods can be stored in definitely. If zone goods are exported, no duty is paid, a handout from the Nashville FTZ said.
It also allows foreign and domestic goods to be mixed together to produce a finished project.
Foreign merchandize in a zone can be assembled, cleaned, destroyed, displayed, graded, inspected, labeled, manipulated, packed, relabeled., repacked, repaired, sold (wholesale) sorted and tested.
This process gives the companies in a FTZ several cost benefits, the handout said.
No bond is required on zone goods. Insurance costs are reduced. Unacceptable goods can be repaired or discarded before a duty is charged. Zone goods may be exported without payment of a duty.
It would be a costly and lengthy procedure for Cannon County to get its own FTZ approved, Bodary said, suggesting that the county join the Nashville FTZ instead.
"We can do this for nothing … or at very little cost," Bodary said.
IDB secretary Corey Davenport moved that Bodary proceed with plans to join Nashville's Free Trade Zone. The motion passed.
IDB members also discussed recent meetings with the Rutherford County IDB, the Upper Cumberland Regional IDB and with the Wilson County industrial recruiter.
"It's important to go to these meetings," IDB Chairman Randall Reid said.
"It helps keep us on the radar," Bodary said, referring to industrial recruiting efforts.
At the Upper Cumberland meeting, the Cannon County officials learned that Gov. Bill Haslam is focusing the state's efforts to expand existing businesses rather than recruiting new industries from overseas, Reid said.
Cannon County's IDB is also planning to meet with Rebecca Smith, regional director, Tennessee Department of Economic and Community Development, later this month.
All the IDB members were present for Tuesday's session. The board includes: banker Mindy Gunter, David Vance, GIC official; Neal Appelbaum, Chamber of Commerce president; Randall Reid; retired executive Dean More; Doug Bodary and Corey Davenport, Cannon County GOP chairman.