Certified in Logistics, Transportation and Distribution (CLTD) Practice Test

A primary goal of a Foreign Trade Zone (FTZ) is to encourage foreign investment and exports. FTZs are designated areas within a country, typically near ports of entry, where goods can be imported, handled, manufactured, or reconfigured without being subject to the usual customs duties and tariffs that would typically apply. This incentivizes businesses to invest in these zones by reducing their operating costs related to tariffs. By allowing tariff-free access to goods, an FTZ can significantly lower the cost of importing components and materials, making it economically advantageous for companies to set up operations there. Additionally, because goods that are processed in an FTZ can be exported without tariffs, this setup further promotes exports. Ultimately, the goal is to enhance the competitiveness of domestic production and support economic growth by attracting international companies and encouraging them to establish a presence within the country.