In December 2011, the Cedar Rapids Airport Commission approved seeking expansion of the foreign trade zone from 2,000 acres to 28 counties by reorganizing under the federal Alternative Site Framework program. Similar expansions have been approved in other states.
Airport Director Tim Bradshaw said the Commerce Department's Foreign-Trade Zone Board reviewed the application for reorganization and objected to including Johnson County and some other Eastern Iowa counties.
"The Foreign-Trade Zone Board felt they were being served by the Quad Cities foreign trade zone," Bradshaw said. "The Quad Cities foreign trade zone also had filed to reorganize and wanted to include those counties under their new structure.
"The board said we needed to prove that what it calls the 'convenience of commerce' is not being met by the Quad Cities foreign trade zone. The same thing was true to our west where the Des Moines foreign trade zone serves them.
"Des Moines and the Quad Cities have an advantage over us because they are actually U.S. Customs ports of entry. They have officials there to check things."
Bradshaw said The Eastern Iowa Airport foreign trade zone is served by the Quad Cities and Des Moines ports of entry. He said the revised application for reorganization makes the case that the counties can be included in multiple foreign trade zones.
"We've shown them other areas of the country like Miami, Fla., where counties are served by dual foreign trade zones," Bradshaw said. "We've hired a consultant to help us overcome the 'convenience of commerce' clause and we're moving forward in our desire to expand our zone."
If reorganization ultimately is approved, it would enable any manufacturing or distribution business in the Eastern Iowa counties included in the expanded zone to reduce global supply chain costs. It would dramatically shorten the process for new companies to secure foreign trade zone status for warehousing and distribution operations, and for existing companies in the zone to expand.
The new process would take approximately 30 days from date of application. Under the existing framework, the process takes as much as a year.
Deere & Co. in Waterloo has a 1,400-acre sub-zone of The Eastern Iowa Airport foreign trade zone that saves the company as much as $2.5 million annually.In addition to delay or elimination of duty payments, Deere also realizes savings from zone-to-zone transfers and cash flow savings on customs duties while products destined for the U.S. market are in production.