What is a Free Trade Zone?

A free trade zone is a geographic location in which products and goods can arrive, be handled, reconfigured, or manufactured, and then sent out again without approval or mediation of customs clearance. Areas include New York, Los Angeles, Hong Kong, and Singapore to name a few. If the items that arrive at those cities’ ports is going to be distributed within that country, that’s when customs gets involved.

Some of the major benefits and reasons for free trade zones to exist is that they remove the formality and complexity of customs regulations and are able to avoid high tariffs. This also allows for quicker turnaround times at these ports which means goods get delivered faster. This is especially the case for international shipping.