COMMENTARY: Expert Warns Eastern Shore –
Special Trade Status Slipping Away

Foreign Trade Zone status is crucial to attracting wind energy development. Cape Charles — and the entire Eastern Shore — is in danger of losing FTZ status.


October 23, 2012

Earlier this month I attended the American Wind Energy Association Offshore Windpower conference in Virginia Beach. Coastal Virginia wind-related project sites are in various stages of development.  Investors have amassed, and logistics are being refined in hopes that offshore leases will head towards steel in the water.

Yet, as corporate forces are gearing up, the Virginia Port Authority is changing the Eastern Shore’s most vital investment and trade incentive — how they allocate Foreign Trade Zone designations and to whom.

Politics and competing economic interests from Hampton Roads may leave the Eastern Shore high, dry, and out of the game.

A little background: In July 2009 I toured sites along the Delmarva coast in a project development visit for wind energy companies and manufacturers.

Since then, several domestic and foreign interests have proposed, built, and still have site agreements for future wind developments — both onshore and offshore on the Eastern Shore and in the Atlantic Ocean.

But much more work needs to be done.

My business centers on U.S. incentives to attract foreign investment. That’s why I came to Northampton and Accomack counties — to see U.S. Foreign Trade Zone sites firsthand at Wallops Island, Accomack Airport Industrial Park, and the Cape Charles Sustainable Technologies Industrial Park (part of the Southport development).

There is also a tiny sliver of land in Cape Charles used to dump dredged materials designated as a Foreign Trade Zone.

Cape Charles Mayor Dora Sullivan raised FTZs in a 2011 letter to Governor McDonnell urging focus upon her town in the offshore wind energy game.


Foreign Trade Zones are secure sites authorized by the Foreign-Trade Zone Board having special tax and customs benefits. Foreign Trade Zones can be places where pharmaceuticals are made, cars are built, planes are assembled, wind turbines are manufactured, and — in the case of Wallops Island — rockets are launched.

Foreign Trade Zones have been around since 1934 as a reaction to tariff spikes from the Great Depression’s protectionist Smoot-Hawley increases.

Locally, Hampton Roads’ FTZ No. 20 has existed since 1975. See

U.S. FTZs are a needed component to our National Export Initiative for such companies as Boeing and John Deere.  The U.S. FTZ usage exceeded $500 billion in 2010.

Every state in the Union has at least one Foreign Trade Zone.  Texas leads with 33 FTZs, with usage and inputs exceeding $160 billion — mostly for oil production and storage.

Virginia has five FTZs plus a joint FTZ with Tennessee.  Stihl, Canon, and Merck are Virginia’s leading FTZ users.

Most of Virginia’s FTZ business volume, exceeding $1.6 billion, occurred in and around Hampton Roads, with more than 1,900 jobs attached in 2010.

According to the Congressional Research Service, China employs more than 40 million workers in their more than 20 special trading areas.

Contrast that with less than 320,000 workers in the United States.

Folks on the Eastern Shore ought to get busy lobbying to keep or expand Foreign Trade Zone incentives across Northampton and Accomack Counties — or you may not get them back anytime soon.

Contact the Virginia Port Authority today.  Tell them you want “Magnet Site” designations for your FTZs.  Demand that they not be phased out.  Tell them you don’t want to lose your FTZs, because wind turbines and rockets are important to your community.

Michael W. O’Beirne, a private international trade consultant and industrial real estate developer, lives and works in Washington D.C., New York City, and Colorado.  Email [email protected]
Submissions to COMMENTARY are welcome on any subject relevant to Cape Charles. Shorter articles will be published as a Letter to the Editor.





One Response to “COMMENTARY: Expert Warns Eastern Shore –
Special Trade Status Slipping Away”

  1. Michael W. O'Beirne on December 29th, 2013 4:51 pm

    Dear Cape Charles Readers —

    As predicted in my Oct. 2012 editorial above, this past May your town lost U.S. Foreign-Trade Zone site designation. Although an application is currently pending before the U.S. FTZ Board, no decision has been rendered as of this writing.

    Thank you,

    Michael W. O’Beirne
    East Coast Zone Operations
    [email protected]