The Economic Development Tool Hiding in Plain Sight: Why FTZ Growth Is a Development Strategy

For economic developers, zone grantees, and community leaders.

Every economic development organization is searching for the same things: tools that help existing employers stay, assets that help win new projects, and stories worth telling a board. Most communities already own a tool that does all three, and most of them barely use it.

There are 261 Foreign-Trade Zones granted across the United States. In 2024, operations inside them received $964 billion in merchandise and employed more than 543,000 Americans. Yet in the average community, the local zone is a fraction of one person's job, a paragraph on a website, and a line item nobody has looked at since the grant was approved.

That gap between what zones do and how they are treated is one of the stranger inefficiencies in economic development. Here is the case for closing it.

Retention: the zone is a BRE tool wearing a customs disguise

The most valuable companies in any portfolio are the ones already there, and tariff exposure has quietly become one of the biggest threats to them. A manufacturer paying elevated duties on imported components is a manufacturer whose corporate parent is running the math on production elsewhere. Duty deferral, inverted tariff relief, and weekly entry are, functionally, a cost-competitiveness package for existing employers, delivered through a federal program the community already controls access to.

When an economic developer walks into a business retention visit with a credible answer to "our landed costs are killing us," the conversation changes. The zone is that answer more often than most developers realize, and asking about import exposure is one of the most underused questions in BRE work.

Attraction: site selectors screen for it

For distribution and manufacturing projects with import exposure, FTZ availability functions like infrastructure. It shows up in RFPs alongside power, rail, and workforce. A community that can say "our zone covers this site, here is the grantee, here is the activation path" clears a screening question. A community that cannot may never learn the question was asked.

The 2024 data shows what capturing those projects looks like. South Carolina generates roughly 27,600 FTZ jobs from just three zones. Kentucky produces about 26,100 from three. Arizona, with seven zones, is now the number two FTZ employment state in America on the strength of its semiconductor buildout, and the single largest zone workforce in the country is FTZ 75 in Phoenix at more than 56,000 employees. These are not customs statistics. They are attraction wins that landed, in part, because zone infrastructure was ready when the project asked.

The proof that mid-sized communities can move

The most encouraging pattern in the 2024 numbers is not at the top of the rankings. Twenty-five zones moved up a full activity tier from 2023 to 2024, and the list is dominated by mid-sized regional economies: Huntsville, the Quad-Cities, Shreveport, Knoxville, Cincinnati, St. Louis. The largest single move in the country belongs to Albany, New York, where a semiconductor manufacturer's zone activation took FTZ 121 from under $10 million in annual activity to the $10 to 25 billion tier in one year.

Zone growth is not reserved for Gulf Coast petrochemical complexes and megaports. It happens where companies in the service area learn the program exists and someone helps them through the door.

The asset is already paid for

Sixty-three American communities hold FTZ grants that have never been activated. Dozens more hold zones reporting minimal activity. Every one of those communities already did the hard part: the application, the federal approval, the governance. What remains undone is the cheapest part of the entire program, which is telling companies about it.

For an economic development organization, that is a rare shape of opportunity. No new authority is needed. No incentive dollars are at risk. The federal approval sits on the shelf, fully depreciated, waiting for marketing.

And yes, the story counts

Economic development runs on credible activity: meetings held, companies assisted, programs launched, rankings climbed. An active zone program generates exactly that. A company connected to the zone is a reportable assist. A benchmark ranking is a board slide. An activation is a press release with a federal program behind it. Communities that treat the zone as a living program, rather than a dormant designation, find that it produces both real economic outcomes and the reportable evidence of effort that keeps programs funded.

The zones that grew in 2024 were not luckier than the ones that did not. They were simply in use.

Zone activity figures are compiled from FTZ Board public records. See the full rankings in the National FTZ Benchmark Report, available at americasftznetwork.com. America's FTZ Network is an independent education platform and does not provide legal or customs advice.