Where are free-trade zones established?
Free-trade zones are designated areas using customs and tax arrangements to attract production, storage or re-export.
Formation process and geographic mechanism
Proximity to ports, airports, borders or major markets reduces cargo time. Reliable energy, communications, land and labor influence investment. Although inside national territory, a zone has special customs treatment. Success depends on suppliers, skills and links to the domestic economy, not tax advantages alone.
Spatial outcomes, measurement and management
Import-based assembly may create little local value, while training and supplier programs increase spillovers. Weak environmental or labor enforcement can shift costs to society. Performance should measure durable jobs, technology transfer and infrastructure cost as well as exports. Firm retention after incentives matters.