The Morgan City Harbor and Terminal District discussed the possibility and weighed the benefits and responsibilities that would come along with the designation at its meeting Monday.
The foreign free trade zone would be an area outside of the U.S. Customs’ jurisdiction, where certain merchandise would be able to be held at the port, changed into a different product and then exported to another country with no tariff paid on it, said Mike Knobloch, special projects coordinator for the Port of Morgan City.
“It provides a competitive edge for our businesses to compete against other companies around the world,” Knobloch said.
Port Commission President Jerry Gauthier cautioned that the designation would require significant attention from the port. “It is not simple. … It’s going to be a lot of work. It would take someone on our payroll to manage it,” Gauthier said.
Gauthier suggested the commissioners read the report Knobloch presented on the foreign free trade zone closely before the next meeting and then discuss it again. “I’m not putting down the idea, but I think it’s prudent for all of us … to read this report in detail to see what we might be getting into,” Gauthier said.
If the port does decide to become a foreign free trade zone, the port would pay a $3,200 application fee, Knobloch said.
A business applying for port trade zone status would pay an annual fee set by the port, but the fee would probably be in the $10,000 to $13,000 range, he said.
“We don’t want it to be more than what they’d pay in tariff, because then it would not be advantageous for them to do this,” Knobloch said.
Businesses in other parishes could send products through the Port of Morgan City, he said. “Right now, we have some businesses in St. Mary Parish that are going through the Port of South Louisiana, out of Gramercy, for their foreign trade zone.” Businesses pay $13,000 annually to the Port of South Louisiana to use the port’s foreign free trade zone, he said.