The proposal aims to restore fair treatment for U.S. manufacturers shipping goods to Canada and Mexico while reinforcing regional supply chains and trade flows

The National Association of Foreign-Trade Zones (NAFTZ) welcomed the introduction of companion Senate legislation by U.S. Sen. Tim Scott (R-S.C.) that seeks to improve the position of American firms active in U.S. Foreign-Trade Zones.

The bill, backed by Sen. Katie Britt (R-Ala.), tracks closely with House legislation known as the Foreign-Trade Zone Export Enhancement Act. It would extend duty relief to qualifying products made or processed inside U.S. FTZs and later sent to Canada or Mexico. The measure corrects an imbalance created by the U.S.-Mexico-Canada Agreement that has left FTZ operators at a disadvantage compared with similar firms located in Canada and Mexico.

Yearly commerce among the three nations reaches nearly 1.8 trillion dollars, and many companies depend on integrated cross-border production and sourcing. Current USMCA provisions nevertheless require FTZ users to pay duties on imported inputs before exporting finished items northward, even when those goods meet preferential standards.

Manufacturers in Canada and Mexico avoid similar expenses thanks to programs such as Mexico PROSEC and Canadian tariff relief measures.

Sen. Scott stated that South Carolina businesses located in Foreign-Trade Zones contribute substantially to the state economy. He noted that the legislation creates equal conditions so domestic manufacturing stays competitive, increases exports of U.S.-made goods, and sustains American employment.

The legislation would update trade rules to grant duty relief for eligible FTZ products exported to Canada and Mexico, thereby returning the program to its original 1934 purpose of encouraging domestic output and overseas sales.

NAFTZ President Jeff Tafel observed that U.S. Foreign-Trade Zones were meant to attract investment yet current USMCA implementation has raised costs for zone operators that competitors elsewhere often escape. He said Sen. Scott proposal prevents penalizing firms simply for using the FTZ system.

NAFTZ has pressed for such corrections since the NAFTA period and through USMCA rollout. The group stresses that the bill preserves the agreement while giving U.S. operators treatment comparable to that already enjoyed by producers in partner countries.

The association added that the measure supports national goals of reshoring, supply-chain resilience, and industrial expansion.

NAFTZ Director of Advocacy Melissa Irmen remarked that policymakers currently emphasize stronger North American supply lines and greater U.S. manufacturing investment. She said the bill fixes a long-standing inconsistency, lowers cost gaps for qualifying operators, spurs further domestic investment, and realigns USMCA rules with the original FTZ mission.

Irmen expressed appreciation for Sen. Scott leadership and a desire to collaborate with lawmakers in both chambers.

South Carolina fiber-optic manufacturer AFL voiced support for the effort. CEO Jaxon Lang thanked the senator for advancing policies that aid U.S. manufacturing and said the bill would allow efficient exports to Canada and Mexico, helping firms compete fairly while expanding jobs and innovation at home.

NAFTZ plans to engage Congress, the administration, and industry partners to move the proposal forward. The related House bill remains under review by the Ways and Means Committee.

About the National Association of Foreign-Trade Zones (NAFTZ)

The National Association of Foreign-Trade Zones serves as the leading voice for the U.S. Foreign-Trade Zones community. It represents public and private members nationwide and promotes the program through advocacy, education, and partnership. NAFTZ works to advance policies that enhance U.S. competitiveness, attract domestic investment, create jobs, and facilitate secure global trade. Additional details are available at www.naftz.org.

SOURCE National Association of Foreign-Trade Zones