The Jamaican Free Zones are a controversial government free trade zone

Free trade zone

A free trade zone or export processing zone , also called foreign-trade zone, formerly free port is an area within which goods may be landed, handled, manufactured or reconfigured, and reexported without the intervention of the customs authorities...

 initiative in Jamaica

Jamaica

Jamaica is an island nation of the Greater Antilles, in length, up to in width and 10,990 square kilometres in area. It is situated in the Caribbean Sea, about south of Cuba, and west of Hispaniola, the island harbouring the nation-states Haiti and the Dominican Republic...

. Designed to encourage foreign investment

Foreign direct investment

Foreign direct investment or foreign investment refers to the net inflows of investment to acquire a lasting management interest in an enterprise operating in an economy other than that of the investor.. It is the sum of equity capital,other long-term capital, and short-term capital as shown in...

 and international trade

International trade

International trade is the exchange of capital, goods, and services across international borders or territories. In most countries, such trade represents a significant share of gross domestic product...

, businesses operating within these zones have no tax

Tax

To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...

 on their profits, and are exempted from customs

Customs

Customs is an authority or agency in a country responsible for collecting and safeguarding customs duties and for controlling the flow of goods including animals, transports, personal effects and hazardous items in and out of a country...

 duties

Duty (economics)

In economics, a duty is a kind of tax, often associated with customs, a payment due to the revenue of a state, levied by force of law. It is a tax on certain items purchased abroad...

 on import

Import

The term import is derived from the conceptual meaning as to bring in the goods and services into the port of a country. The buyer of such goods and services is referred to an "importer" who is based in the country of import whereas the overseas based seller is referred to as an "exporter". Thus...

s and export

Export

The term export is derived from the conceptual meaning as to ship the goods and services out of the port of a country. The seller of such goods and services is referred to as an "exporter" who is based in the country of export whereas the overseas based buyer is referred to as an "importer"...

s (capital goods, raw materials, construction materials, and office equipment

Office supplies

Office supplies is the generic term that refers to all supplies regularly used in offices by businesses and other organizations, from private citizens to governments, who work with the collection, refinement, and output of information .The term includes small, expendable, daily use items such as...

) and import licensing

Import license

An import license is a document issued by a national government authorizing the importation of certain goods into its territory. Import licenses are considered to be non-tariff barriers to trade when used as a way to discriminate against another country's goods in order to protect a domestic...

 requirements. However, they must export 85 percent of their products outside of the Caribbean Community

Caribbean Community

The Caribbean Community is an organisation of 15 Caribbean nations and dependencies. CARICOM's main purposes are to promote economic integration and cooperation among its members, to ensure that the benefits of integration are equitably shared, and to coordinate foreign policy...

 (CARICOM).

There are five Jamaican Free Zones:

• Kingston Free Zone (KFZ) in Kingston
  Kingston, Jamaica
  Kingston is the capital and largest city of Jamaica, located on the southeastern coast of the island. It faces a natural harbour protected by the Palisadoes, a long sand spit which connects the town of Port Royal and the Norman Manley International Airport to the rest of the island...
  
   was established in 1976 on ground adjacent to the Kingston Container Terminal. It was the first free zone established in Jamaica. The 180000 square metres (1,937,503.9 sq ft) site contains 72835 square metres (783,989.4 sq ft) of factory space.
• Montego Bay Free Zone (MBFZ) in Montego Bay
  Montego Bay
  Montego Bay is the capital of St. James Parish and the second largest city in Jamaica by area and the fourth by population .It is a tourist destination with duty free shopping, cruise line terminal and the beaches...
  
   was established in 1985 on a 95 acres (384,451.7 m²) site southwest of the city. It has 488110 square feet (45,346.9 m²) of factory/office space. An additional 103000 square feet (9,569 m²) of space is being added specifically for information technology
  Information technology
  Information technology is the acquisition, processing, storage and dissemination of vocal, pictorial, textual and numerical information by a microelectronics-based combination of computing and telecommunications...
  
  .
• Garmex Free Zone
• Hayes Free Zone
• Cazoumar Free Zone

Kingston and Montego Bay Free Zones are government owned, while Cazoumar is privately owned.

Companies outside of the zones can apply for free zone status as Single Entity Free Zones. Created under the Jamaica Export Free Zones Act, the zones are operated by the government. The zones were initially used to promote textile manufacturing

Textile manufacturing

Textile manufacturing is a major industry. It is based in the conversion of three types of fibre into yarn, then fabric, then textiles. These are then fabricated into clothes or other artifacts. Cotton remains the most important natural fibre, so is treated in depth...

 and related industries, but the program has been expanded to include information technology, with addition clauses added to the act in 1996. Businesses that operate in the zones must be in the fields of manufacturing

Manufacturing

Manufacturing is the use of machines, tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale...

, warehousing and storage

Warehouse

A warehouse is a commercial building for storage of goods. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial areas of cities and towns. They usually have loading docks to load and unload...

, distribution

Distribution center

A distribution center for a set of products is a warehouse or other specialized building, often with refrigeration or air conditioning, which is stocked with products to be redistributed to retailers, to wholesalers, or directly to consumers. A distribution center is a principal part, the order...

, processing

Industrial process

Industrial processes are procedures involving chemical or mechanical steps to aid in the manufacture of an item or items, usually carried out on a very large scale. Industrial processes are the key components of heavy industry....

, refining

Refining

Refining is the process of purification of a substance or a form. The term is usually used of a natural resource that is almost in a usable form, but which is more useful in its pure form. For instance, most types of natural petroleum will burn straight from the ground, but it will burn poorly...

, assembly, packaging

Packaging and labelling

Packaging is the science, art, and technology of enclosing or protecting products for distribution, storage, sale, and use. Packaging also refers to the process of design, evaluation, and production of packages. Packaging can be described as a coordinated system of preparing goods for transport,...

, or service operations.

From 1985-1995 the combined export output of the zones in textiles was US$

United States dollar

The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....

1.31 billion. Around 12,000 people were employed in the textile factories, about 1.6 percent of the total workforce. However since 1995 the industry has been in a serious depression due to structural problems in Jamaica and increased foreign competition.

World Trade Organization

World Trade Organization

The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...

 rule changes agreed at the Doha Development Round will end export subsidies

Export subsidy

Export subsidy is a government policy to encourage export of goods and discourage sale of goods on the domestic market through low-cost loans or tax relief for exporters, or government financed international advertising or R&D. An export subsidy reduces the price paid by foreign importers, which...

 in 2007.

The free zones have been criticized as United States of America-subsidized sweatshop

Sweatshop

Sweatshop is a negatively connoted term for any working environment considered to be unacceptably difficult or dangerous. Sweatshop workers often work long hours for very low pay, regardless of laws mandating overtime pay or a minimum wage. Child labour laws may be violated. Sweatshops may have...

s. The 2001 documentary film

Documentary film

Documentary films constitute a broad category of nonfictional motion pictures intended to document some aspect of reality, primarily for the purposes of instruction or maintaining a historical record...

 Life and Debt

Life and Debt

Life and Debt is a 2001 American documentary film directed by Stephanie Black. It examines the economic and social situation in Jamaica, and specifically the impact thereon of the International Monetary Fund and the World Bank's globalization policies...

features interviews with free zone workers, as well as with several prominent critics such as Michael Manley

Michael Manley

Michael Norman Manley ON OCC was the fourth Prime Minister of Jamaica . Manley was a democratic socialist....

 (the former Prime Minister of Jamaica

Prime Minister of Jamaica

The Prime Minister of Jamaica is Jamaica's head of government, currently Andrew Holness. Andrew Holness was elected as the new leader of the governing Jamaica Labour Party and succeeded Bruce Golding to become Jamaica's ninth Prime Minister on 23 October 2011...

), that support this view.

See also

Entrepôt

Entrepôt

An entrepôt is a trading post where merchandise can be imported and exported without paying import duties, often at a profit. This profit is possible because of trade conditions, for example, the reluctance of ships to travel the entire length of a long trading route, and selling to the entrepôt...

The USA import materials to the free zone, which is then assembled in Jamaica.