MOBILE FOREIGN-TRADE ZONE The second foreign-trade zone licensed in the United States under the foreign-trade zones law will be established at the port of Mobile. The grant of this privilege was issued to the Alabama State Docks Commission by the Foreign Trade Zones Board on September 22, 1937. Port officials and business men at Mobile expect this added facility to attract new business to the port in commodities such as wines and liquors, olives and olive oil, seeds, cement, hides and skins, refined sugar, tobacco and manufactures, chemicals, rice, chinaware, vegetable oil, and a number of others. It is expected that the variety of potential commodities will result in the zone being used for storage as well as breaking up, assembling, distributing, sorting, grading, cleaning, mixing with foreign and domestic merchandise, or otherwise manipulating goods, as provided in the law. (See fig. 10.) SLOW PROGRESS EXPECTED Because of the experimental nature of foreign-trade zones in this country, and because of a lack of familiarity on the part of the public with the purposes of such facilities, and with the details of operation, the establishment of such areas has proceeded slowly. However, it has been clearly indicated since the passage of the enabling legislation that a number of the port cities are vitally interested in the possibilities of increasing their foreign trade through the establishment and operation of foreign-trade zones. The fact that the establishment of these zones has not been rapid is not to be considered as indicative of a lack of interest on the part of business interests, but rather as representing the desire to proceed slowly with the expenditure of funds for the establishment of a new and hitherto untried facility in this country. The law provides that the establishment and operation of foreign-trade zones must be financed locally rather than by the Federal Government. A study of the establishment and operation of free ports in foreign countries discloses that, in a great many instances, from 4 to 8 years, and in some cases an even longer period of years, were required after the passage of the enabling legislation to establish a free port and place it in operation. ADVANTAGES OF FOREIGN-TRADE ZONES The following advantages, among others, of foreign-trade zones have beeen claimed by the proponents of their establishment: 1. Foreign-trade zones will overcome the inadequacy of the present system of bonded warehouses and drawbacks with regard to rehandling, reconditioning, repacking, and reexporting. 2. Foreign-trade zones will obviate, in most instances, the necessity of advancing large sums for bonds and duty payments, and will reduce expenses of customs supervision. 3. Such zones will tend to attract increased transshipment and intransit trade. 4. Such zones will tend to attract increased reexport trade. 5. Establishment of these zones will provide facilities for the maintenance and development of consignment markets for dutiable raw 33514°-38-7 materials and for semimanufactured goods, as well as for dutiable finished products. 6. Such zones will tend to better equalize outbound and inbound ocean traffic. 7. Foreign-trade zones will aid shipping by permitting prompt docking, uninterrupted discharge of cargo, quick lading, and early clearance-all as a result of simplified customs procedure. 8. Foreign-trade zones will permit importers to store goods, except where the duty is liquidated, for an indefinite period. Today such goods cannot normally be stored for a longer period than 3 years. 9. Zones will benefit commodities which are subject to import duty or excise tax, on which there is a considerable shrinkage of content during the storage period; for example, wines and liquors. 10. Zones will benefit commodities upon which the import duties are high, and which may involve a lapse of time between importation and consumption long enough to cause the element of interest on duties paid to be an important item. 11. Zones will benefit commodities which are subject to Government or private rejection as substandard in quality, or which are not packed according to specifications and which, therefore, may be more conveniently held in a foreign-trade zone until acceptable as complying with standard requirements; for example, seeds and certain food products. FOREIGN FREE PORTS Foreign free ports, which have been established for the facilitation of international commerce, came into existence with the general adoption of the national protective tariff schedules. In countries imposing high protective tariff rates on imported merchandise, the establishment of free ports became a particularly logical development. Coinciding, therefore, with the consolidation of national territories and the erection of national tariff barriers, European free ports, in the modern sense, came rapidly into being after 1876. In that year, an Italian free-port law was enacted, by virtue of which Genoa was constituted a modern free port. Before the end of the nineteenth century, the great free ports of northern Europe had been establishedat Hamburg and Bremen in 1888; at Copenhagen in 1894; and at Danzig in 1896. The conception of a sort of commercial oasis in which foreign merchandise, destined for transshipment or for processing and subsequent reexport, may find respite from the restrictions necessarily imposed as a means of protecting lawful customs revenue, has, at various times, attracted the attention of nearly all countries. At the present time, it is estimated that approximately 75 free ports in 25 foreign countries have been authorized. In most instances these have been established and are in actual operation. Of this number, nearly 50 are located in 15 European countries. ADMINISTRATION OF FREE PORTS The administration and operation of free ports in foreign countries rests fundamentally in the hands of the government by which they are created. The following are the types of administration which are in use: 1. Direct government administration, such, for example, as Danzig and Gdynia (Poland) and the free ports of Latvia. 2. Administration by cooperation between government and private interests. Examples of this type of administration are those in effect in Göteborg, Sweden, and Copenhagen, Denmark. 3. Administration by consortium. Hamburg may be cited as an example of this type. 4. Private operation. Under this type of administration the entire operation of the free port is let to a private company. Bremen, Germany, is an example of this type. 5. Operation under international agreement. Under this type of administration land-locked countries such, for example, as Czechoslovakia, have been assured free ports of their own in such ports as Hamburg, Stettin, Trieste, and Gdynia. ACTIVITIES OF FREE PORTS Following are the activities which are generally carried on in foreign free ports: (1) Storing; (2) breaking bulk; (3) repacking; (4) assembling; (5) distributing; (6) sorting; (7) grading; (8) cleaning; (9) mixing (domestic and foreign merchandise); (10) manipulating; (11) exhibiting; (12) in some instances, manufacturing. In general, it may be observed that the physical equipment and facilities available in the free ports abroad are thoroughly modern and represent a high degree of efficiency. Charges for the use of facilities in a foreign free port are generally the same as those assessed for identical services in the port outside of the free area. There are, however, certain exceptions, and occasionally special privileges are granted by free ports beyond those that are extended to foreign commerce in general. |