Archives For Free Zones

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Forget increasing the number of Free Trade Zones at and around UK ports, real thought should be given to whether Britain could become a nationwide FTZ, a panel discussion at Multimodal heard today.

The discussion, organised by the Chartered Institute of Logistics and Transport, weighed the advantages and disadvantages of setting up more FTZs as Britain’s starts its exit journey from the European Union.

While Geoff Lippitt, business development director at PD Ports, said that there was no “desperation for the traditional type of FTZ”, he conceded that as UK ports enter a new post-EU member era, any method that could improve the competitiveness of the nation’s exports should be considered.

Tony Shally, managing director of Espace Europe, added that FTZs would give the UK a great opportunity to bring manufacturing back to the country.

Bibby International Logistics’ managing director Neil Gould went a step further, calling for the creation of a ‘UK FTZ’, to facilitate a joined up environment in which it is easier to move trade. “We need to think how we work together as an industry and how we join everything up to make the UK more competitive,” he said.

However, Barbara Buczek, director of corporate development at Port of Dover, sounded a word of caution, warning that FTZs could actually be detrimental for ro-ros, an important cargo mode for the south UK port. “It’s a great concept, but we also have to be mindful of the guys on the other side who we have to ‘play’ with,” she said, adding that she is “a bit sceptical” about how an FTZ plan could pan out. Originally published by Port strategy.com

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sezFree zones are often seen as a cure-all remedy to the problems developing economies encounter when trying to attract FDI. However, the reality is that such projects need careful planning and long-term support if they are to fulfil such wishes. A report published by fDI Magazine, and featured online – fdiintelligence.com – covers the topic quite comprehensively. While the article it is titled ‘Free Zones’ it’s not quite certain whether all developments sited follow the same business model. Nonetheless it provides some interesting insight to developments across the globe. Of particular interest for Africa are references to developments in Rwanda, Botswana, and the Gambia. In the case of the latter, the Gambian government’s decision to legally enable companies to operate as standalone zones, whereby businesses are permitted to enjoy the benefits of being a ‘free zone’ entity without having to establish in the country’s business park, could enable Gambia to attract investors who wish to have a greater degree of choice over the location of their premises.

Some of the key messages of the article come in the form of cautionary’s –

“the ‘build it and they will come’ assumption over SEZs will not guarantee investor interest”

“while governments are quick to launch them with great fanfare, a lack of on-going support afterwards hinders the zone from developing to a competitive and world-class standard…many projects remain just that – a project”

“while the idea of clustering several companies from a few specific sectors sounds promising on paper, in practice this can be detrimental to foreign enterprises”.

Read the full report here!