The World Trade Centers Association (WTCA) is advocating for the expansion of free trade zones (FTZs) across the Asia Pacific region, highlighting their potential to drive global trade, attract investments, and promote inclusive and sustainable growth within local communities.
During the recent WTCA Asia Pacific Regional Meeting (APRM) hosted by World Trade Center (WTC) Haikou in Haikou, China, WTCA representatives pointed to the success of the Hainan Free Trade Port as a model that can be replicated in other countries in the region.
“Haikou, as the gateway to the Hainan Free Trade Port, stands as a symbol of what can be achieved when we embrace open trade, innovation, and global collaboration,” said Crystal Edn, WTCA Executive Director–Member Services. She emphasized that the Hainan Free Trade Port represents not just a strategic economic zone but a vision for the future of trade, where goods, services, and ideas flow freely across borders, bringing prosperity to all stakeholders.
Located on Hainan Island, the Hainan Free Trade Port is set to become the world’s largest Free Trade Port when it begins independent customs operations at the end of 2025. WTC Haikou’s primary goal is to support Hainan’s special economic zone as a global investment hub.
The Philippines has recognized the potential of FTZs—also known as Special Economic Zones (SEZs)—to attract foreign direct investment (FDI) and stimulate business growth in designated areas, thereby enhancing national economic development.
The country's development of ecozones began with the implementation of the Special Economic Zone Act of 1995, which aimed to establish SEZs in strategic locations nationwide to attract legitimate and productive foreign investments. Today, the Philippines has over 400 SEZs managed by the Philippine Economic Zone Authority (PEZA) under the Department of Trade and Industry, offering businesses within these zones customs tax exemptions, incentives, and regulatory benefits.
A study by the Hong Kong Trade Development Council (HKTDC) underscored the significant impact of these FTZs on the Philippine economy. They contribute to approximately 56% of the country’s commodity and goods exports and over 16% of its gross domestic product (GDP). The zones have attracted FDIs in industries such as manufacturing, processing, and assembling for export, with major investors including the Netherlands, Japan, Singapore, the U.S., and more recently, South Korea.
The 2021 Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act expanded the scope of activities within SEZs, covering sectors under the Strategic Investment Priority Plan (SIPP), regardless of export orientation. Various SEZs now cater to a broad range of industries, including manufacturing, IT, and medical tourism.
In 2023, PEZA approved ₱175.7 billion (USD 3.05 billion) in investments, reflecting a 24.9% year-on-year increase. During the first eight months of 2024, PEZA reported approving ₱61.69 billion (USD 1.11 billion) in investments, which are expected to generate 31,827 new jobs and substantial export revenue.
“The establishment of FTZs across the region will continue to generate new business and foreign investments as the innovation, economic cooperation, and ease of trade in these areas lead to more jobs and increased productivity for all countries involved,” said Scott Wang, WTCA Vice President, Asia Pacific.
WTCA is committed to promoting international trade and investment into local FTZs through its world-class facilities and annual networking events, such as the upcoming 2024 WTCA Member Forum, which will be held from October 27 to 29, 2024, in New York City.
The growth and development of FTZs will be a central theme at the Forum, where founding member of the World Free Zones Organization, Martin Ibarra, will discuss how special economic zones present significant opportunities to connect manufacturing, logistics, services, and other businesses through international trade.
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