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Upton Helps Deliver Foreign Trade Zone Designation for Pfizer-Will Provide an Economic Boost to the Region

TZ designation fortifies Pfizer's ability to compete across the globe, strengthens local economy; could increase competitiveness locally by at least a million dollars annually

PORTAGE, MI -Congressman Fred Upton (R-St. Joseph) today joined U.S. Department of Commerce Assistant Secretary David Spooner at Pfizer's Building 41 in Portage to present Pfizer officials with a foreign-trade zone (FTZ) subzone approval.  FTZs are locally sponsored sites, approved by the U.S. FTZ Board, where special Customs procedures can be used.  By helping to keep and grow Pfizer's U.S.-based manufacturing, approval of FTZ status supports jobs both at the Kalamazoo-area facility and at the U.S. companies that supply Pfizer.  Upton had worked with Pfizer in urging the Department of Commerce to grant the foreign-trade zone status, writing to the Commerce Department in support of the application in February of 2006.

"The foreign-trade zone designation for Pfizer is another piece of positive economic news for our region - this approval will allow for further job creation for Pfizer and its suppliers.  It's my understanding that Pfizer will now be able to trim costs and be more competitive by at least a million dollars per year, right here in Kalamazoo," said Upton.  "The FTZ designation will help keep Pfizer's facility in Southwest Michigan competitive with other production facilities across the globe.  Pfizer's operations are critical to the overall economic vitality of the region and the country as a whole."

Foreign-trade zone based manufacturing can allow U.S. producers to better compete with manufacturing plants overseas.  The FTZ approval for Pfizer will help the company compete with foreign factories that produce similar pharmaceutical products.  With more than 3,000 employees at the Portage plant, the FTZ approval will encourage retention of domestic manufacturing activity and encourage exports. Exports, which currently represent 35 percent of plant production, are valued at $630 million annually.  FTZ procedures will contribute to additional employment opportunities at both Pfizer and its suppliers. 

Local entities, such as a city or county government, economic development organization, or port authority can apply to establish FTZs in their communities to enhance local trade-related opportunities.  Once granted approval to establish a local zone by the U.S. FTZ Board those entities can sponsor applications on behalf of specific manufacturing firms to use FTZ procedures.  Thus, the new FTZ subzone, or single-purpose site, at Pfizer's plant is sponsored by the existing Battle Creek FTZ.

In general, foreign goods can be warehoused at a FTZ and U.S. import duties will not be paid until the goods leave the FTZ for the U.S. market.  If the goods are re-exported, U.S. import duties do not have to be paid. For many U.S. manufacturers, FTZ authorization is an essential tool for competing with factories overseas.  The duty-equalized treatment available through the FTZ program can help lower the cost of producing goods in the United States compared to foreign competition.  All FTZ manufacturing applications are evaluated by the U.S. FTZ Board to ensure a positive affect on the U.S. economy

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