Text 2

Task 9. a) Read and translate the text.

FREE TRADE ZONES

Other common terms for Free Trade Zones or designated trade promotion areas include :

Free Economic Zone (FEZ);

Export Processing Zone (EPZ;

Free Port (FP);

Industrial Free Zone (IFZ);

Technological Free Zone (TFZ);

Special Economic Zone (SEZ;

Industrial Development Zone (IDZ).

Governments are increasingly promoting trade by creating Free Trade Zones (FTZs). FTZs attract employers, stimulate the area’s economy and promote economic growth for the host country in terms of foreign investment, employment, technology and industrialization. Governments also use these zones as a way of kick starting export-oriented economic development, as well as national economic reforms.

Generally considered to be outside the traditional Customs territory, insofar as import duties and taxes are concerned, these zones offer a number of incentives to attract business. Incentives vary between FTZs but generally include non-discriminatory access to the zone, streamlined customs procedures, import and export duty exemptions, and liberal foreign exchange policies.

Given the economic benefits, FTZs have become indispensible tools for global business. Introduced into an FTZ, the counterfeit goods may undergo various economic operations, including assembly, manufacturing, processing, warehousing, re-packaging and re-labeling. Once completed, the goods can be imported directly into the national territory of the hosting state or re-exported to another FTZ.

The success of FTZs can be seen in their dramatic growth over the last three decades. In 1975 only 79 FTZs existed worldwide, employing roughly 800,000 people. Today it is estimated that there are approximately 3,000 FTZs in 135 countries, accounting for 68 million direct jobs and over 500 billion US dollars of direct trade-related value.

Unfortunately, FTZs have also become advantageous for organized crime groups and counterfeiters. This hijacking of FTZs not only impairs their primary function – to facilitate legitimate trade – but also creates an enormous drain on the global economy. Billions in legitimate economic activity are being crowded out, facilitating “underground economies” that deprive governments of revenues and dislocates hundreds of thousands of legitimate jobs, in addition to exposing consumers to deficient or even dangerous products.

International trade conventions and agreements governing the enforcement

of IP rights have not kept pace with this rapid exploitation of FTZs. Some governments and Customs authorities have questioned whether they have jurisdiction to exercise control in FTZs. The absence of international standards on IPR enforcement in FTZs has produced a sense of perceived immunity over goods in these zones, creating exactly the type of environment that allows counterfeiters

and organized crime groups to flourish.

(WCO NEWS)

b) Make a glossary. Choose seven words to remember.

c) Discuss which of the statements are true/false? Correct the false statements.

Free zones are supposed :

• to improve the flow of passengers;

• to facilitate import-dependent export activities;

• to impose duties and taxes;

• to encourage the development of external trade;

• to work out customs regulations;

• to simplify customs procedures;

• to deliver the goods on time.