In March, the federal government awarded Chenango County, northeast of Binghamton, foreign trade zone status. That means county businesses can import goods without paying a tariff. They also pay a lower tariff if those goods are sold within the United States and no tariff if the final product is exported.
The new title doesn't necessarily mean companies will flock to the county. Onondaga County, with Syracuse at its center, received foreign trade zone status thirty years ago. Today, there are no companies taking advantage of it.
The federal government recently changed the way the zones work. Originally, they were in fixed locations like industrial parks. And companies were expected to move in. Now, companies within an approved region can apply to be included in the zone and don’t have to move their operations.
Onondaga County’s economic development director, Mary Beth Primo, says Onondaga’s use of the original, industrial park model may be why their zone fell dormant.
“The federal foreign trade zone board realized that if they want companies to take advantage of the benefit, if they want to help drive import activity as well as export activity that they’d have to create something that was more accommodating to businesses,” says Primo.
In the 1980s Chrysler and the typewriter company Smith Corona used Onondaga’s zone to import manufacturing components. Those companies have moved on.
In Chenango County, a packaging company called CWS that’s been in the area since 1964 has already signed up.
CWS’s sales manager Jason Lasicki says his company now plans to add onto its warehouse space and may expand its workforce from 225 to 250 employees.
“I think that the real benefit is, from an upstate perspective, is that this allows us specifically an opportunity to attract larger customers that presently aren’t doing business within the state,” says Lasicki.
Lasicki’s company assembles packaging for items manufactured elsewhere. So, for example, a toothbrush might have been made in the United States, but the packaging assembled by his company might come from Mexico. That packaging can now come to Chenango County without having an import tax added onto it.
So far, the only other company signed up is the pharmaceutical manufacturer Norwich Pharmaceuticals.
Rebecca Sands is the economic development coordinator for Chenango County. She says they sent out brochures to large manufacturers in the area but only had the two companies sign up. Any other companies that are looking to join will apply through Sands’ office.
“As a manufacturer you’re going to see that savings. Also you know you could do warehouse and packaging,” says Sands.
Sands says she hopes the lower cost of doing business in Upstate New York, compared to near larger ports nearby, will attract businesses. Chenango County’s classification brings the number of foreign trade zones in the state to 15.