Port considers foreign free trade zone
MORGAN CITY, La. — The Port of Morgan City is considering applying to establish a foreign free trade zone at the port.
The Morgan City Harbor and Terminal District discussed the possibility and weighed the benefits and responsibilities that would come along with the designation at its meeting Monday.
The foreign free trade zone would be an area outside of the U.S. Customs’ jurisdiction, where certain merchandise would be able to be held at the port, changed into a different product and then exported to another country with no tariff paid on it, said Mike Knobloch, special projects coordinator for the Port of Morgan City.
“It provides a competitive edge for our businesses to compete against other companies around the world,” Knobloch said.
Port Commission President Jerry Gauthier cautioned that the designation would require significant attention from the port. “It is not simple. … It’s going to be a lot of work. It would take someone on our payroll to manage it,” Gauthier said.
Gauthier suggested the commissioners read the report Knobloch presented on the foreign free trade zone closely before the next meeting and then discuss it again. “I’m not putting down the idea, but I think it’s prudent for all of us … to read this report in detail to see what we might be getting into,” Gauthier said.
If the port does decide to become a foreign free trade zone, the port would pay a $3,200 application fee, Knobloch said.
A business applying for port trade zone status would pay an annual fee set by the port, but the fee would probably be in the $10,000 to $13,000 range, he said.
“We don’t want it to be more than what they’d pay in tariff, because then it would not be advantageous for them to do this,” Knobloch said.
Businesses in other parishes could send products through the Port of Morgan City, he said. “Right now, we have some businesses in St. Mary Parish that are going through the Port of South Louisiana, out of Gramercy, for their foreign trade zone.” Businesses pay $13,000 annually to the Port of South Louisiana to use the port’s foreign free trade zone, he said.
The commission also passed a resolution of support for the proposed construction of a new marine safety center at South Central Louisiana Technical College’s Young Memorial Campus in Morgan City.
An approximately $250 million capital outlay bill is being put together in the Legislature for all the state’s community colleges and vocational technical colleges that are not part of a community college, said state Rep. Sam Jones. South Central Louisiana Technical College is trying to get funding out of the bill to build a new $9.6 million marine safety training center. Getting funding for the center would take probably a couple of years and then five to six years to finish building the center, Jones said.
The technical college is focusing on expanding the programs that make it unique, bringing people from all over the world to the campus, said Earl Meador, regional director for SCLTC.
“It looks like a portable building city,” Meador said of the college’s current marine safety training center. “What’s happened is those buildings are getting old, are falling apart … and it’s also due to use. Last year, 2012, we issued over 7,000 training certificates … impacting 3,600 students. … That’s how busy that place is,” he said. “We have just completely outgrown our facility.”
The college offers marine safety and petroleum industry safety training, Meador said. “We are one of the only public schools to offer a commercial diving program in the nation,” Meador said.
Funding from the state capital outlay bill would require a 10 to 15 percent local match with a maximum of $1 million on a $10 million project, Jones said. The first project to come out of the bill will probably be in 2015, he said.
In other business,
—The commission approved a resolution to purchase new doors for a warehouse at the port used by the U.S. Coast Guard at a cost not exceeding $4,000.
—The commission approved Gauthier to sign an agreement with J. Ray McDermott Inc.
—Mike Lowe of the U.S. Army Corps of Engineers said emergency dredging in the Horseshoe Bend in the Atchafalaya River was completed on March 9. The dredging was timed to coincide with the sail out of a McDermott vessel on its way to West Africa, said Jerry Hoffpauir, port of Morgan City executive director.
—Dredging has been completed in the Atchafalaya Bay Channel, Lowe said.