106k views
3 votes
When using a free trade zone (FTZ) or free port for exporting, ______________.

1 Answer

0 votes

Final answer:

Using a free trade zone for exporting allows businesses to enjoy benefits such as no trade tax, promoting international trade and economic growth, as seen in the Mauritius SEZ model.

Step-by-step explanation:

When using a free trade zone (FTZ) or free port for exporting, businesses can take advantage of the special economic zone (SEZ) benefits where the government does not tax trade. This tax-exempt status can significantly reduce costs for companies, thereby encouraging international trade and potentially contributing to economic growth. For example, the island of Mauritius, implementing government-supported SEZs, has enjoyed above-average economic growth since the 1980s, showcasing the potential impact of such zones on a nation's economy.

User Antony Ng
by
7.9k points