FTZs by the Numbers, USA vs. EU: A Tale of Two Sides of the Atlantic

FTZ News:Nearly $964 billion worth of goods went into U.S. foreign-trade zones in 2024, according to the Foreign-Trade Zones Board's 86th annual report to Congress. The same report counts $133.5 billion in exports and about 543,000 people employed at zone operations. Europe has nothing like it, and a good part of the reason is how reporting is set up.
In the U.S., the board files with Congress every year, working from annual reports that zone operators fill out themselves. The EU's customs code asks for far less. Member states just tell the Commission which free zones are operating. When the Commission had Ecorys study the zones in 2022–23, the authors noted that no commonly agreed EU method exists for weighing costs against benefits.

Counting exports

The two sides don't mean the same thing by the word. The U.S. board counts shipments to foreign countries from facilities operating under zone procedures, valued on input materials rather than value added, and it leaves out indirect exports. Eurostat's €2.58 trillion for 2024 covers everything the EU sent to non-member countries, and that headline number doesn't split out what passed through a zone.

Divide $133.5 billion by the Census Bureau's own total for 2024 goods exports, about $2.06 trillion, and zones come to roughly 6.5%. Rough is the right word. You can't run the same sum for Europe, because nobody has published how much of its exports moved through a free zone.

The U.S. numbers

Exports peaked at $161.9 billion in 2022. They fell to $148.8 billion the next year and $133.5 billion in 2024, which is 17.5% under the peak, per the board's five-year table. Receipts held up better, slipping from $1.01 trillion to $963.8 billion. Set one against the other and 16 cents of every dollar that went in came back out as exports in 2022. By 2024 it was 14 cents. That's a crude comparison, since one side is input-based exports and the other is receipts.

For the long run, the board's fiscal 2009 report had exports just over $28 billion, on the same input basis, and about 330,000 people at some 2,500 firms. Exports today are about 4.7 times that, and headcount is up roughly 65%. Fiscal versus calendar years, and changes in how firms and operations are counted, make this more a trend than a clean ratio.
Zones are mostly factories. Production sites took in $589.8 billion against $374 billion for warehouse and distribution, and they shipped $83.3 billion of the exports. The board's own employment chart puts about 82% of zone jobs in production in 2024. The four biggest exporting plants on its list are ExxonMobil, Mercedes-Benz, Merck and Lilly's Puerto Rico operation. Texas leads on both receipts and exports.

The 543,000 is headcount at zone operations. It isn't a count of jobs the zone status created. The figures also come from reports operators file themselves, and the board publishes state and zone detail only in ranges, because the underlying numbers are proprietary business information.

The EU numbers

The Commission's 2023 study is the best EU-wide evidence there is, and it's far from complete. It found 62 active zones in 18 member states, down from 78 in 2007. That's about a fifth gone. Seven members have none at all.

The regional estimates sound big: up to 19% of GDP, up to 6% of investment, over 2% of exports and up to 4% of jobs in the regions that host zones. Those are ceilings, and the authors say they don't account for displacement. In Poland and Latvia, host regions are about 7% richer than non-host regions but grow no faster. Polish research cited in the study links zones to more new firms but weaker job creation.

The evidence base is thin. The team got trade data for three zones, revenue data for nine and investment data for seven, from a single point in time and largely self-reported. In the five zones where they compared taxes collected with taxes forgone, two came out ahead. Their bottom line: the data can't say whether benefits beat costs.

For one outside check, a recent IZA paper on Madeira, whose zone introduced employment requirements, found wages up more than 10% for incumbent workers afterward, along with more part-time work and more people working for several firms at once. One zone settles nothing, but it shows a European zone's jobs data can be measured.

Taxes, and what firms do with them

U.S. savings go where the arithmetic works. Duties wait until goods enter U.S. commerce, and importers can choose the rate on the parts or on the finished product. That suits firms whose parts face higher duties than the finished goods, firms that export a lot, and firms that hold inventory a long time (my reading of the mechanics). The biggest foreign-status inputs at production sites fit the pattern: vehicle parts at $22.8 billion, crude oil at $21 billion and pharmaceuticals at $20.1 billion.

Tariffs have narrowed that. Customs and Border Protection's guidance requires steel and aluminum articles and their derivatives entering a zone to be admitted in privileged foreign status, and the extra duties on goods from Brazil carry the same requirement. The board's own notices say privileged status rules out inverted-tariff savings on the affected items. Deferral and duty-free re-export still work.

In the EU, a zone competes with other customs tools. A Danish stakeholder said ordinary customs procedures already offer most of what a zone does, and Croatian stakeholders said it's hard to stand out on tax and customs perks. Where income-tax breaks exist, they come with strings. Lithuania's is zero profit tax for ten years, then 7.5% for six, against a 15% standard rate, tied to investment and job targets. Poland exempts corporate, personal income and real estate taxes.

Madeira charges 5% through 2027. So a company's choice in Europe often hinges on whether it can hit the headcount and capital thresholds under state-aid limits, more than on customs savings.

The next U.S. report covers 2025, the first full year under the new tariffs. I couldn't find it yet. Whether exports keep sliding from $133.5 billion is the open question.