How have various trade agreements affected the need for the foreign-trade zone program?
A. Trade agreements, including the Uruguay Round and NAFTA, have resulted in the reduction of many U.S. tariffs. As a result, certain companies that have benefited from the foreign-trade zones program in the past may find that they no longer need FTZs to place them on an even playing field with their competitors abroad. This occurs by design and is a positive reflection on the FTZ program as a temporary solution to irrational tariff relationships. It is for this reason that companies must continually evaluate the impact of the evolving trade environment on their business. While some companies find that FTZ use is no longer required to rationalize irrational tariff relationships, others discover that the program offers needed relief from the unintended effects of trade agreements and changing tariff schedules that place U.S.-based manufacturers at a disadvantage. For example, when industries that were previously subject to quotas make the transition to tariffs, they may benefit from the
