THE PROGRAM THAT HAS INFLUENCED MEXICO'S ECONOMIC DEVELOPMENT
From the resounding seaports, and land and air borders to the silent companies in the cities, free trade zones have come to facilitate the tasks of all the actors in the logistics chain of those foreign trade activities.
In an increasingly interconnected world, generating strategic alliances that facilitate trade between countries has been a key factor in the economic development of the country and in the attraction of foreign capital, as well as in the arrival of new foreign companies.
Mexico's free zone system has been in place for more than six decades. Few commercial alliances stand out as much as the one that unites Mexico and the United States, for 79 years these countries have strengthened commercial ties that range from manufacturing production to the exchange of natural resources, where free trade zones have been a key element in the growth of this commercial exchange.
Free trade zones are programs that allow the use of customs processes different from the usual ones, i.e., they do not go through the formal customs process. They benefit trade in terms of clearance times and costs, eliminating or reducing tariff and non-tariff barriers to trade between participating countries, mainly with the aim of promoting trade between regions, attracting foreign direct investment and economic development.
The main attraction of the FTZ (Free trade Zone) is the importation of products without having to comply with certain customs requirements and without having to pay tariffs, as this allows interested parties to save time and money, two key factors in the logistics chain of any company.
FTZs can be a building, an industrial park, a warehouse, a foreign trade company's yard, or a region. The goods that enter these authorized spaces, activated as free zones, are exempt from formal customs entry and the payment of taxes, and can be used for storage, assembly, processing of goods, or for goods that will later be exported to another country. Once the formal transfer is made for the goods to enter the foreign market, the corresponding taxes will be paid.
Another of the benefits of a free zone is the Federal Inspection Station, where two agencies: the Mexican National Customs Agency (ANAM) and the Customs and Border Protection (CBP) for air cargo products carry out a joint review of the merchandise, which reduces the time required for the customs processing of the merchandise.
Where is the Federal Inspection Station located? Currently this benefit is only located in 8 airports in the country: Guadalajara, Toluca, Queretaro, Silao, Ramos Arizpe, Chihuahua, Hermosillo and San Luis Potosi, however, the long-term objective is to expand the benefits to all airports in the country, considering that this depends on the negotiations that are achieved between the governments of both countries.
Although it is true that for an FTZ to contribute to the economic growth of a region, it must meet certain requirements so that the countries are not affected in their local markets and its opening is attractive to both governments. These requirements include:
- Compliance with the country's rules and regulations, which ensure that labor and environmental laws will be respected.
- Justification and demonstration of the viability of the project, i.e., that the activation of the FTZ will promote the economic development of the countries and investment.
- Demonstrate that there are companies or projects in place, both international and national, with the interest to trade in the zone and have the benefits of a free trade zone.
- Land how the success of this zone will benefit regional development, i.e., job creation in the region and improved infrastructure.
Continuing to generate trade relations with other countries has been a strategy that has allowed Mexico to benefit from nearshoring and FDI, especially the trade alliance it has generated with the United States; therefore, it is expected to have more free trade zones in the coming years. And you, did you already know about FTZs?