Letter to Mr. Andrew McGilvray, Executive Secretary, Foreign-Trade Zones Board, U.S. Department of Commerce
Letter
Today, U.S. Senator Charles E. Schumer called on the Foreign Trade Zone Board within the Department of Commerce to grant Liberty Pumps, Inc., in Genesee County, the FTZ manufacturing designation it needs to remain competitive with foreign manufacturers and expand production of pump products in New York. Foreign-trade zones are designated sites in the United States, licensed by the FTZ Board, where companies can benefit from delayed or reduced customs duties. Currently, without the FTZ manufacturing designation, Liberty Pumps is at a competitive disadvantage at home and abroad with manufacturers in China, Mexico and elsewhere.
"Liberty Pumps has been producing top rated products in Genesee County for decades, and it is critical that the Commerce Department grant them Foreign Trade Zone manufacturing status to level the playing field so American manufacturers like Liberty Pumps are better able to compete against foreign manufacturers," said Schumer. "Liberty Pumps wants to grow its company and its 125 employees in Genesee, but anticompetitive tariffs are hampering their ability to do business. We need to do everything we can to avoid flushing jobs and business success out of Genesee County, and that is why I'm strongly urging the Foreign Trade Zone Board to do the right thing for the region, and give this terrific company the designation and flexibility it needs to expand jobs right here in New York."
Liberty Pumps is an independent, locally-owned, and family-operated manufacturer of pumping products for groundwater and wastewater removal used in both residential and commercial applications. Founded in 1965, Liberty Pumps now employs over 125 people at its sole production facility located in Bergen, NY. The share of imported pumps into the U.S. market has ballooned to 75% in just the last 5-10 years and Liberty Pumps must compete with Chinese, Mexican and other foreign manufacturers that enjoy significant cost advantages. Liberty Pumps currently pays high duties -- thousands of dollars a month -- on the components it uses in manufacturing finished pumps. Not only do competing foreign pump manufacturers have duty-free access to components, their exports of finished pumps to the U.S. also are not subject to duties.
Without FTZ manufacturing authority, Liberty Pumps is at a competitive disadvantage at home and abroad. Schumer today called on the FTZ Board to grant Liberty Pumps' request for manufacturing authority which would allow Liberty Pumps to source the components it needs to make pumping products free of duties, lowering the company's costs and helping grow jobs in Genesee County.
Liberty Pumps, a company in Genesee County that employs over 125 people, has asked the Foreign Trade Zone Board for manufacturing authority which would allow it to import components needed to produce its pumping products duty free. With FTZ Board approval, Liberty Pumps could realize a savings of thousands of dollars per month, grow jobs, and be better able to compete with overseas manufacturers.
The text of Senator Schumer's letter to the head of the Foreign-Trade Zones Board appears below:
Andrew McGilvray
Executive Secretary, Foreign-Trade Zones Board
U.S. Department of Commerce, Rm 2111
1401 Constitution Avenue, NW
Washington, DC 20230
Dear Mr. McGilvray,
I understand the Genesee Gateway Local Development Corporation has submitted a request for manufacturing authority on behalf of Liberty Pumps, Inc. (new Foreign-Trade Zone; docket no. 05-2012). I write to express my strong support for Liberty Pumps' application. Approval for manufacturing authority will benefit the retention of existing industry and employment in Bergen, New York, by improving Liberty Pumps' international competitiveness.
Liberty Pumps is an independent, locally-owned, and family-operated manufacturer of pumping products for groundwater and wastewater removal used in both residential and commercial applications. Founded in 1965, Liberty Pumps now employs 125 people at its sole production facility located in Bergen, NY, a rural Upstate community located near Rochester. Liberty Pumps is an integral part of the local economy and FTZ manufacturing authority is critical to ensuring Liberty Pumps can remain competitive with foreign suppliers.
Liberty Pumps and its Bergen, NY, facility currently compete with imports from China and Mexico, as well as other countries. As a result of so-called "inverted tariffs," Liberty Pumps faces a significant competitive disadvantage vis-à-vis foreign suppliers. In particular, the duties on imports of finished pumps are significantly lower than the duties on imports of the pump components -- specifically, import duties on finished pumps are zero, while import duties on pump components run as high as 10.1 percent. This "tariff inversion" means that foreign manufacturers and exporters have a significant cost advantage over U.S. manufacturers like Bergen's Liberty Pumps.
Mr. McGilvray, as you well know, FTZs are intended to create and maintain employment by supporting manufacturing and value added in the United States which, for customs reasons, might otherwise be carried on abroad. The tariff inversion faced by Liberty Pumps -- and the impact on its domestic and international competitiveness -- is exactly the scenario contemplated under FTZ rules and a compelling reason why the Board should grant Liberty Pumps' manufacturing authority request.
I believe that Liberty Pumps has demonstrated the need for FTZ services and I respectfully urge the Board to grant the manufacturing authority request submitted by the Genesee Gateway Local Development Corporation on behalf of Liberty Pumps. FTZ manufacturing authority will allow Liberty Pumps to remain competitive with offshore producers of competing products and keep jobs in Bergen, NY. I ask that you please keep me apprised of developments with respect to Liberty Pumps' application, and I thank you for your consideration of this matter.
Sincerely,
Charles E. Schumer
United States Senator
Source