[Note: this text-only version of this publication does not include charts, illustrations, photographs, or tabular matter.] 64th Annual Report of the Foreign-Trade Zones Board to the Congress of the United States for the fiscal year ended September 30, 2002 REPORT OF THE EXECUTIVE SECRETARY During the 2002 fiscal year, the Foreign-Trade Zones (FTZ) Board issued 54 formal orders. The decisions included approvals for three new general-purpose zones and 18 new subzones. Authority was also granted for the expansion of 15 existing general-purpose zones and 11 subzones. Other actions involved the granting of authority for revisions to zone plans, as well as approvals for new or increased manufacturing activity. 1 There were 150 FTZ projects fully active during the year, with subzones in operation in more than 100 of them. The number of facilities using subzone status increased to 237, with 22 new ones initiating the use of FTZ procedures and five discontinuing. The combined value of shipments into general-purpose zones and subzones totaled $204.1 billion, compared with $225.2 billion last year( Figure 1 and Appendix D). It appears that a major portion of the decrease in the value of zone shipments was related to lower crude oil prices during the period, which affected the value of inputs to a substantial number of zone operations in the oil refining industry. General-purpose sites received $32 billion in merchandise. Total shipments received at subzone sites amounted to $172.1 billion. Some 84 percent of zone activity took place at subzone facilities, which is consistent with the pattern of the past 15 years.2 ____________________________________________________ Merchandise Received FY 2002 ($ bil)3 FY 2001 ($ bil)3 General-purpose zones 32.0 29.5 Subzones 172.1 195.7 _____ _____ _____ Total 204.1 225.2 ____________________________________________________ Exports (shipments to foreign countries) from facilities operating under FTZ procedures amounted to $15.6 billion (Figure 2). The export figures do not include indirect exports involving FTZ merchandise that undergoes further processing in the United States at non-FTZ sites prior to export. Some 319,000 persons were employed at the 2,285 firms that operated under FTZ status during the year. The main foreign-origin products received at zones are listed in Appendix E. Industries that continued to account for most zone manufacturing activity included the oil refining, automotive, electronic, and pharmaceutical product sectors. An estimated 65 percent of the shipments received at zones for use in manufacturing activity involved domestic status merchandise. The level of domestic status inputs used by FTZ operations indicates that FTZ activity tends to involve domestic operations that combine foreign inputs with significant domestic inputs. The Board received and filed 46 formal applications during the fiscal year. These proposals requested authority for one new general-purpose zone and 18 subzones, as well as authorization for expansion and new manufacturing at existing zone projects (Appendix F). In addition, over 75 cases were processed under the Board's less formal administrative procedures (Appendix G). The latter cases involved routine, non-controversial changes to zone projects, such as boundary modifications and scope decisions. (1) Appendix A contains a summary of each Board Order. Zone authority for manufacturing/processing activity was granted on a restricted basis in nine cases, and activation limits were adopted in another nine. The main products covered by restrictions included crude oil, steel, textiles and robotics. (back) (2) Appendices B and C contain figures on shipments into and out of general-purpose zones and subzones. Appendix D contains comparative statistics for the past five years. The figures represent the latest statistical data available from grantees. Some are still under review. Adjustments normally amount to less than 1 percent of aggregate shipments and would be reflected in next year's report. (back) (3) The dollar values in this report and appendices are rounded numbers. Calculations were performed before rounding. (back) Appendix D U.S. FOREIGN-TRADE ZONES SUMMARY STATISTICS (in $ billions; fiscal year) 1998 1999 2000 2001 2002 Merchandise Received GP Zones 20.6 24.6 28.2 29.5 32.0 Subzones 136.5 149.0 209.9 195.6 172.1 Total 157.1 173.6 238.0 225.2 204.1 % Subzones 87% 86% 88% 87% 84% Domestic Status Inputs1 GP Zones 8.5 11.1 15.0 15.6 16.5 Subzones 96.3 104.5 136.8 123.1 117.0 Total 104.8 115.7 151.8 138.6 133.6 Domestic Status Inputs Ratio GP Zones .............. 41% 45% 53% 53% 52% Subzones 71% 70% 65% 63% 68% Average 67% 67% 64% 62% 65% Foreign Status Inputs GP Zones 12.1 13.5 13.2 14.0 15.5 Subzones 40.2 44.5 73.1 72.6 55.0 Total 52.3 57.9 86.3 86.5 70.5 Exports2 GP Zones ................. 6.6 6.5 3.7 3.8 3.5 Subzones 10.3 10.3 11.0 11.6 12.2 Total 17.0 16.8 14.7 15.4 15.6 Exports/Foreign Status Inputs Ratio (%) GP Zones .................. 55% 48% 28% 27% 22% Subzones 26% 23% 15% 16% 22% Average 32% 29% 17% 18% 22% Approved FTZ Projects 226 232 231 238 241 Active FTZ Projects3 145 142 145 146 149 GP Zones 123 121 117 113 116 Subzones 204 210 216 220 237 1 Domestic status merchandise is mainly merchandise of domestic origin but includes some foreign-origin goods on which Customs entry and duty payments have been made prior to their entering FTZs. 2 Export figures are based on material inputs and do not include value added. 3 Active projects have at least one site (including subzones) in operation. Return to Top Appendix E SUMMARY OF MAIN FOREIGN STATUS PRODUCTS RECEIVED IN U.S. FTZs (In $ Millions)1 GENERAL-PURPOSE ZONES Autos/Other Motor Vehicles $6,603 Crude & Petroleum Oils & Related Products 2,683 Electronic Products & Parts 1,510 Machinery/Equipment & Supplies 909 Audio/Video Equipment & Supplies 540 Metal & Mineral Products 537 Auto/Other Motor Vehicle Parts 403 Wearing Apparel/Textiles & Rel. Prod. 351 Home Appliances/Furnishings & Decorations 209 Electrical Equipment & Related Parts 160 Computers/Office Equip. & Rel. Parts 139 Steel 138 Jewelry/Watches 134 Liquor 105 Toiletries/Cosmetics & Related Products 99 Ship Parts & Related Equipment 96 Tobacco Products 94 Juice Concentrate 91 Vacuum Fluorescent Displays 88 Bearings 78 Pharmaceuticals & Related Products 71 Chemicals & Related Products 70 Sporting Goods/Rec. Equip. 40 Other Food Products 18 Medical Equipment & Supplies 13 Sugar 11 Plastic/Rubber Products 10 Luggage/Handbags & Related Products 7 Miscellaneous 4 Wood Products 3 Photo/Optical Equip. & Supplies 3 SUBZONES Crude & Petroleum Oils $44,692 Auto Parts 3,195 Autos 1,386 Electronic Products & Parts 1,139 Pharmaceuticals & Supplies 677 Chemicals 467 Other Motor Vehicles & Parts 466 Ship Parts & Shipboard Equipment 369 Machinery/Equipment & Supplies 198 Home Appliances/Furnishings & Related Parts 178 Photo Optical Equipment & Supplies 167 Watches/Jewelry 152 Other Audio Video Equipment & Supplies 120 Toiletries/Cosmetics & Related Products 91 Other Metal & Mineral Products 84 Wearing Apparel/Textiles & Related Products 73 Computers/Office Equip. & Rel. Parts 63 Steel 10 Juice Concentrates 9 Miscellaneous 6 Electrical Equipment & Related Parts 5 Plastic 4 Milk Products/Infant Formula 2 1 The above figures represent estimates of the value of foreign-status merchandise received based on reports from grantees regarding the top products received at their zones.