Q&A on the Rise of FTZs

Following the "Real Estate Summit: Scaling the World Trade Center Model through Free Trade Zones" panel discussion at the April WTCA Global Business Forum, hosted by WTC Greater Philadelphia (WTCGP), the WTCA Editorial Team asked two of the panelists and an attending B2B delegate their thoughts on the rise of Foreign/Free Trade Zones (FTZs):

What is your biggest advice for WTC businesses looking to integrate into or collaborate with a Free Trade Zone within their local community?

Leigh Ryan (WTC Savannah): The U.S. FTZ program supports U.S. based importers and exporters. The program optimizes supply chains and minimizes a product’s landed cost therefore improving U.S. based companies cost competitiveness and compliance. The program also benefits communities by attracting new business, increasing local employment, expanding the tax base and enhancing infrastructure. As a WTC business engaging in international trade, it would be beneficial to connect with the local or regional U.S. FTZ Grantee (representative), understand the value of the program and the companies who participate.

Ryan Moore (Golden Isles Development Authority): Seek advice and stay the course. 

Andrés Ibarra (Araújo Ibarra): Begin by recognizing that WTC businesses and FTZs are more similar than they appear. Both promote trade and investment, just through different mechanisms. In that sense, they are natural allies, which is precisely the idea behind the "Free Zones Go Global" initiative. The real opportunity lies in figuring out how to make them work together. This means bringing the benefits of a free zone regime into a WTC environment to give it real superpowers. At the same time, it means putting the global WTCA network, one of the most powerful international webs of contacts and relationships in the world, at the service of a free zone. Operating on its own, a free zone could never build that kind of reach.

What are the biggest benefits for a WTC business in doing so?

Leigh Ryan (WTC Savannah): World Trade Center Savannah (WTCSav) was awarded the Grant of Authority for the U.S. FTZ program in 2012, giving us the opportunity to promote the program throughout our region, offering yet another way to bring value to companies of every size. WTCSav works to promote the FTZ program through the various economic development organizations supporting both existing companies as well as providing an additional tool for recruitment of new industry — either manufacturing or warehouse and distribution.

Andrés Ibarra (Araújo Ibarra): Think of it as two types of power coming together. The WTC brand offers name recognition and broad commercial reach across markets. FTZs offer complementary benefits, including fiscal incentives, streamlined international trade, and access to free trade agreements. Neither one has what the other has, and that is exactly what "Free Zones Go Global" is designed to leverage — whether for new projects or for existing FTZs that want to add the weight of the WTC brand to the incentives they already offer. For WTC businesses specifically, the opportunity is more concrete than most realize. In several countries, including Uruguay, Costa Rica, and Colombia, free zone regimes allow qualification by floor or by building. This means that an existing WTC property with vacant floors can apply to operate under a free zone regime — either fully or partially. The same applies to expansions: a planned addition to an existing building can be designated as a free zone from the ground up. If your business has international operations and your spaces are underutilized, you may already have the means to access fiscal and trade benefits inside your own building.

What tools/resources are needed to get started?

Leigh Ryan (WTC Savannah): If a company is interested in the U.S. FTZ program, a great place to start is with the Grantee organization within their state or region. These professionals can assist the company through the process from exploratory analysis through final activation with Customs and Border Protection (CBP). The National Association of Foreign Trade Zones (NAFTZ) is the only trade association supporting the U.S. FTZ program and its membership consists of FTZ consultants, service providers, Grantees, company operators and users from throughout the U.S. The NAFTZ offers webinars, in person conferences and training, advocacy and connectivity through all aspects of the U.S. program. A general understanding of the program, its benefits and the organizations/agencies involved is a good first step in determining if this program would be of value to a company.

Ryan Moore (Golden Isles Development Authority): A good consultant.

Andrés Ibarra (Araújo Ibarra): The first step is taking an honest look at what you already have. For an existing WTC business, this means determining if there is a planned expansion. For a new business planning international expansion, it means checking whether that growth could qualify under a free zone regime. The possibilities are broader than most people expect — entire floors for business process outsourcing (BPO) or shared services, international legal services, data centers, convention centers, trade fairs, and hotels under tourism free zone frameworks, along with industrial or logistics developments that complement existing office operations. Each of these has a path and in many cases, that path runs through the building you are already in. From there, it is largely a matter of having the right guidance. The WTCA network and "Free Zones Go Global" provide businesses with the knowledge, connections, and frameworks they need to navigate this process, so nobody has to figure it out alone. Our team can help you identify which opportunities apply to your situation and guide you through the necessary steps. The barrier to entry is lower than it seems. The momentum is there.

What role do you think will FTZs play in businesses of the future?

Leigh Ryan (WTC Savannah): The U.S. FTZ program, supported by the Foreign Trade Zones Act of 1934, has provided valuable benefits to U.S. based companies for over 90 years, ever evolving with the changes in international trade. Today the program supports 543,000 U.S. jobs with US $964 billion in domestic and foreign shipments entering U.S zones in 2024 and exporting over US $133 billion to foreign countries, and we expect these numbers to continue to grow.

Ryan Moore (Golden Isles Development Authority): Hopefully AI makes the reporting burden lighter and allows smaller operators to take advantage. 

Andrés Ibarra (Araújo Ibarra): The businesses that will lead the next decade are going to need environments that can move as fast as they do. FTZs offer that, since they are a platform for scale, and more industries are recognizing that every year. The question of whether FTZs are relevant to the future of business is settled. Now the question is which businesses, and which countries move early enough to shape what that future looks like. The World Free Zones Organization has already done the work — it mapped out the ten businesses of the future, and once those were identified, it started building alliances with them, so free zones become the mechanism that accelerates their growth. Lower capex, lower installation and operating costs, and instant international competitiveness make free zones the perfect instrument to accelerate these new businesses in new cities and territories.

Our interviewees:

• Leigh Ryan, Vice President, WTC Savannah (WTCSav); and Board Treasurer, National Association of Foreign-Trade Zones (NAFTZ)
• Ryan Moore, President and CEO, Golden Isles Development Authority (B2B Delegate - WTCSav)
• Andrés Ibarra, COO, Araújo Ibarra International Business Consultants (WTCA Consultant)