Foreign Trade Subzone to Give Apple Supplier Competitive Edge


Mesa and Apple Inc. supplier GT Advanced Technologies are working together to activate a foreign-trade subzone that would facilitate manufacturing and related savings.

Last fall, residents and officials alike applauded the news that an Apple Inc. supplier would begin manufacturing high-tech glass for the technology giant in Mesa.

But the much-heralded announcement was only the first in a series of steps needed to get GT Advanced Technologies — and the 700 people it ultimately plans to employ — churning out the scratch-resistant sapphire glass at the former First Solar factory.

As the plant inches closer to completion, the Mesa City Council is poised to approve one such step, an operator agreement that would offer GTAT a competitive advantage via the creation of a foreign-trade subzone.

Foreign-trade zones are secured areas where Customs and Border Protection considers merchandise to be technically outside the United States’ territory, despite being physically located within the nation’s borders. The designation allows for import-fee savings in general as well as property-tax savings in Arizona, according to Mesa economic-development project manager Shea Joachim.

The zones also provide a workaround for federal import limits on certain materials, such as ammunition.

“Sometimes it might not be a duty-deferral issue, but more the fact that it (a foreign-trade zone) can provide a logistical supply-chain benefit,” Joachim said. “In the case of GTAT and Apple, they have a particular type of material that they’re going to be bringing in from elsewhere, and the foreign-trade zone is a unique opportunity for them to bring that manufacturing and that material to the United States.”

Mesa secured approval for a general-purpose foreign-trade zone, which generally encompasses the Phoenix-Mesa Gateway Airport area, nearly two decades ago. Because the sapphire-glass facility is to the northeast of that zone, at 3740 S. Signal Butte Road, the city needed to create an adjunct subzone to offer GTAT the same benefits.

Though the Foreign-Trade Zones Board approved the subzone in March. the city can act only as a grantee, not an operator.

That’s where the operator agreement, expected to be approved Monday, June 2, comes in.

The arrangement allows the city to delegate responsibility for management of the subzone site, as well as compliance responsibilities linked to federal requirements, to GTAT.

Following approval of the agreement, GTAT must apply to activate the zone. For that step, the city merely acknowledges it has received the application and that it meets its requirements. The technical review falls to Customs and Border Protection.

“Customs actually comes out and inspects the facility and makes sure their security is appropriate, they know how to handle the materials, who will be there when they need to receive things,” said Scot Rigby, Mesa’s senior project manager for the Gateway area.

Joachim already has received a few parts of the activation application, he said, and expects a formal submittal “in the very near future.”

Maria Polletta, The Republic |