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MVP-RV Again Seeks Foreign Trade Zone Status

November 24, 2009 by · Leave a Comment 

Riverside County, Calif., supervisors are expected to approve a resolution today (Nov. 24) urging the federal government to admit a Moreno Valley vehicle manufacturer into the county’s Foreign Trade Zone, which would provide it with immediate import-tariff relief.

In September, MVP-RV sealed a deal with South Korean electric vehicle producer CT&T to make the company’s e-zone and c-zone EVs at MVP-RV’s then-shuttered recreational vehicle manufacturing plant along Interstate 215, according to The Desert Sun, Palm Springs, Calif..

According to MVP-RV President Brad Williams, the partnership could translate into the creation of around 120 jobs on the assembly line and in supporting positions.

MVP-RV has applied several times to the U.S. Department of Commerce for admittance to Foreign Trade Zone 244, which is operated by the March Joint Powers Authority and runs along the I-215 corridor between Moreno Valley and Perris.

The company’s applications have been denied each time, along with the applications of four other local firms, with federal officials citing a lack of customs inspectors to monitor new entrants to the trade zone.

Firms with trade zone status are spared paying import duties on products they bring into the country for use in manufacturing. The goods are treated as though they’re still outside the U.S., and taxes are assessed later, when the finished products go to market, according to federal officials.

Riverside County Foreign Trade Commissioner Tom Freeman said dozens of local businesses are part of the western county trade zone and by saving those businesses import fees, there’s more money for them to reinvest in operations and expand payrolls.

The county has been seeking to have a full-time customs inspector from the U.S. Customs and Border Protection Agency posted to the county’s western trade zone, offering free office space and use of a county vehicle as part of the bargain. But federal officials have rejected the requests.

Sherri Hoffman, assistant director of trade in the Customs and Border Protection Los Angeles field office, said that generally any time a trade zone governed by the Port of Los Angeles Customs and Border Protection office lies more than 60 miles beyond the outer boundary of the port trade zone, a user-fee agreement must be in place for customs officials to service the outlying trade zone.

According to Freeman, that means the county would have to pay $150,000 a year, which he complained was tilting the playing field in favor of businesses closer to the port.

“The Orange County and Los Angeles communities have an advantage over us,” he said recently. “They have a federal subsidy that we don’t enjoy here in Riverside County. Their businesses have the advantage of not having to pay fees” for customs inspectors.

Until last November, three customs inspectors staffed the western Riverside County trade zone. But when freight shipper DHL left March Field, so did the inspectors, whose positions were funded by the company.

Riverside County ranks 47th in exports among the nation’s 3,100 counties, with roughly 1,000 manufacturers in the county shipping to all corners of the globe, according to the county Economic Development Agency.

The export trade in Riverside County is valued at $2.5 billion annually, EDA figures show.

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