Prince George's County was the first in this area to get one.
Hampton Roads in Virginia now has one, too, and because of it, coffee beans and tobacco recently entered its ports for the first time.
Authorities at Baltimore/Washington International airport are working on getting theirs underway.
The city of Baltimore just got one, and Fairfax County, not to be outdone, may get one, too.
They're foreign trade zones, the latest rage across the country among communities seeking to boost local revenues and create jobs that otherwise would go to workers overseas.
Within the zones, unfinished products are stored, assembled, packaged or otherwise altered by American workers, then shipped into the United States with lower-than-usual duties imposed on them. Conversely, products can be exported duty free from the zones to other countries.
The operators of the foreign trade zones often provide leasable storage and distribution space for a variety of businesses in warehouse-type buildings near airports, seaports or other transportation networks and the operations are usually a part of an industrial park complex.
And the zones have become a flashy new international addition to communities' economic development efforts.
Foreign trade zones are cropping up in increasing numbers nationwide, including four in Maryland and Virginia within the past 16 months. Their popularity is growing as communities show greater interest in international trade and in luring foreign firms, along with domestic ones, to do business within their jurisdictions.
"In 10 years, there's been quite a growth," said John J. Da Ponte Jr., director of the Commerce Department's foreign trade zones division. In 1970, eight communities had foreign trade zones. Now there are 68 zones, and 10 applications are pending, Da Ponte said.
During the 1970s, shipments from the zones grew from $105 million to $3.5 billion, according to the Commerce Department. So far, 1,400 companies are using zones from Bangor to San Juan and Charleston to Honolulu, creating jobs for 14,000 people and additional revenues for cities, Da Ponte said. Special subzones have even been created for single firms, rather than for many firms, such as the one set up for Volkswagen Manufacturing Corp. of America near Pittsburgh.
"The core idea is to have jobs here that would otherwise go overseas," said Gary Horlick, an assistant secretary of Commerce.
Now consideration is being given to including foreign trade zones in legislation establishing enterprise zones, which give tax and other benefits to firms that locate in depressed areas.
The foreign trade zones often are operated by private firms that contract with the local government, much as utilities are supposed to be run for the benefit of communities and not for huge profits.
Prince George's County hopes its zone will attract about $500,000 in revenues over the first five years of its life, and as many as 1,700 jobs, said James Threatte, director of marketing for the county's department of economic development. The first building in the zone is expected to be finished by the first of April, and Threatte said he hopes it will house numerous small businesses.
The trade zone is being built on 77 acres near U.S. Rte. 301, south of Central Avenue near Bowie, and is part of a proposed 1,200-acre international center that will include office space, a hotel and convention center. The international center is still in the planning stages, Threatte said.
The county hopes to attract high technology firms that will hire people in the $24,000 income range or higher, Threatte said. He said he didn't imagine the zone would produce many entry-level jobs.
A joint venture between a German firm and the American subsidiary of another, Geoma/Eticam, plans to locate in the zone. Geoma manufactures heavy industrial pipe used in industrial waste recovery and Eticam produces pollution control equipment, Threatte said. The two firms plan to construct their own plant to build valves for controlling effluent and to conduct research on industrial waste facilities, Threatte said.
So far, no other companies have firm contracts to locate there, although about 200 firms are interested, Threatte said. The zone will be managed by Harkins Associates of Silver Spring, which also is building facilities there.
The zone at BWI is also close to opening. Earlier this month, airport authorities received proposals from firms to manage the trade zone. A decision is due next month, said Nelson Ormsby, manager of analysis and policy development for the airport.
The airport has already set aside 5,600 square feet of space in existing cargo facilities for the zone until new buildings can be built, Ormsby said. Zone occupants will be selected after the manager is chosen.
BWI is taking the cautious approach, Ormsby said. It is starting out small.
"The experience in the past zones is they have grandiose plans," Ormsby said. "The most successful zones activated a small amount of space initially."
After the concept is tested in the cargo facility, the airport plans to move into two more buildings. Since authorities don't know what firms will locate in the zone, Ormsby said he didn't know how many jobs would be created or how much the state will get in revenues.
Baltimore is the latest community to make a foreign trade zone part of its economic development plan. McCormick Properties Inc., a subsidiary of McCormick & Co., will build the zone, starting this month, with a 60,000-square-foot building. When completed within the next three to five years, the zone will have as many as 12 buildings with 450,000 square feet and will employ between 400 and 500 workers. The first building will be ready for occupancy in late summer.
Baltimore officials have identified about 30 international and domestic firms interested in participating in the venture. The city hopes the zone will generate about $400,000 a year in property-tax revenues when complete.
The zone will be located at Holabird Industrial Park near the city's harbor.
The Peoples Republic of China was the first to use the Virginia Port Authority's zone at Hampton Roads when it shipped 643 bags of coffee beans, followed by a second shipment of 500 bags, authority officials said. The beans were shipped through Hong Kong and will be stored in the zone, awaiting re-export because that nation already has reached its quota on imports into the United States.
The zone, approved last July, has also dealt with German printing machinery and South American tobacco products.
Fairfax County officials, who have presented the Commerce Department with a draft proposal for a zone at Dulles International Airport, are still studying the plan, a county spokesman said.
One problem that could crop up between the various area jurisdictions is competition for business.
"Competition? We'll see," Ormsby said. "I find it hard to believe there aren't enough activities in this area to withstand three trade zones."
The local zone directors say each zone will have a unique character that will be attractive to a certain type of firm. For example, the Baltimore zone, near the city's harbor, will be more interested in handling heavy goods to be transported by ship, Ormsby said. BWI hopes to get electronics firms whose goods "tend to move by air" and other lighter weight but high-value goods to be assembled or packaged there.
Prince George's County is also vying for the high technology companies, but it may be able to accommodate firms that need to avoid the kind of atmospheric vibrations that an airport might have, Threatte said.
In addition, many of the zones' users may be part-time occupants or they may hop around to different zones depending on what services they need, Da Ponte said.
For example, the zone in Toledo served 17 businesses during 1979, of which 14 occupied space there continuously, according to the Commerce Department. About 70 people worked there at one time, and 57 of those were full-time employes. The workers labeled chemicals, inspected and labeled liquor, inspected, labeled and repacked machine parts, smelted metals, inspected tools and weighed and marked zinc products.
For 1978, income from rents, storage and other costs for the Toledo zone was $277,030 while expenditures for salaries, U.S. Customs Service and promotion were $216,291. Income for 1979 rose to $312,701 and expenditures also rose to $284,105. The average occupancy rate in 1979 was 93 percent.
However, the zone in Mayaguez, Puerto Rico, operated as part of the territory's economic development program, had five business occupants employing up to 434 persons to cut and pack beef, attach buttons to clothing, pack caviar and manufacture pharmaceuticals, textiles and thread. In 1978 and 1979, expenditures were twice the income.
Foreign companies are more interested in assembling goods in the trade zones than in the past, Da Ponte said, because wages in foreign countries have increased at a faster rate than those in the United States and the duty discounts are attractive.
Within the zones, companies exporting goods into the United States can delay paying duties on them until they leave the facility, Da Ponte said. This procedure can save companies thousands of dollars by allowing them to invest that money rather than give it to U.S. Customs officials.
About 5 percent of the zones are behind schedule in starting, Da Ponte said, and one zone planned for Sault Ste. Marie, Mich., was abandoned partly because of high construction costs.