The Port of Iberia, along with the Acadiana Regional Airport, has been touted as a great economic asset for Iberia Parish.
Managing that asset can be a challenge, trying to market the port to companies wishing to relocate to the area as well as making sure existing businesses stay here. Not only do the jobs the port attracts provide income for local workers, the products which flow through the port create their own taxable revenue base.
That’s where free trade zones come into play. When cargo or materials are sent to the port from overseas, having a free trade zone established could allow for tax exemptions, which would make using the port more attractive for businesses and gives them more incentive to grow their business here. On the other hand, it could hurt the tax revenues if the other pieces of the economic puzzle — employment and local spending — do not keep up.
This week, the Iberia Parish Council is expected to discuss a resolution endorsing a free trade zone application for Frank’s International at the port. The process has been underway for months, but is now entering the final stages as the company seeks approval of the free trade subzone at the Port of Iberia.
The Daily Iberian reached out to Port of Iberia Executive Director Craig Romero to explain what the subzone would mean for the port as well as the rest of Iberia Parish’s residents.
How did the latest trade zone effort come about?
Frank’s International operates in 64 different countries, so they could use a trade zone. I’m surprised they haven’t done it before. Most of the tools they manufacture here are not used domestically.
What qualifies for tax exemption under the trade zone?
Only inventory for a foreign destination is eligible. The trade zone status doesn’t affect anything for domestic production. Usually they have it fenced off. There’s a weekly report, a computer printout, to make sure you are doing what you say you are doing. The record keeping is pretty tedious. The zone itself is gated, with controlled access.
So what is the trade off for the port and parish?
If we establish a foreign trade zone here, the hope is Frank’s will move more of the production here. I’m hoping so. They used to do a lot more production here.
Has the port done this in the past?
Yes, about a year ago, when SeaDrill came in. I went to the parish council and the school board, and they were both in support. The company operates about 50 rigs, primarily overseas. They just opened a shore base at the port, but they would not talk to us unless we could prove to them we could set up the free trade subzone. They had one in Terrebonne Parish and needed to expand, but Terrebonne said, “No, we want our tax money.” The shore base is not a lot of jobs, but SeaDrill spends about $1 billion a year in the region fixing rig parts. It’s an economy by itself.