In many ways, Rhode Island’s petite geography is a dual-edged sword.
On the one hand, it doesn’t take long to get to Newport or Providence or Bristol or even a PawSox game in Pawtucket (hopefully something that won’t come to an end in the near future).
But if you are a business that sells a product or service, the Ocean State’s diminutive size is not always a friendly thing. In a very real way, it is a limiting factor on growing your markets and thus improving the health of your enterprise.
For that reason, the state’s recent application to expand its foreign trade zone to include the entire state is far more than a bureaucratic nicety. It is an opportunity for more local businesses to grow their activity.
The benefit of foreign trade zones relates to duties and taxes. If a product is imported to the zone and then moved on to a foreign market, the company does not have to pay all the tariffs that would apply if it were sold domestically. That is especially useful for a company such as North Atlantic Distribution Inc., which is one of the largest automobile importers in the nation, and is located at the Port of Davisville in the Quonset Business Park, part of the state’s FTZ.
NORAD makes after-market improvements to autos that arrive there, and the tariff is not applied to the improvements if that car is then shipped out of the country.
If more local companies take advantage of this opportunity, not only will they be better off, but the state in its entirety would benefit as well, which seems fitting for the nation’s smallest state.