Foreign-Trade Zone 86-Tacoma, Washington Application For Foreign-Trade Subzone Status Matsushita Kotobuki Electronics Industries of America, Inc. (9- and 13-inch Television/Video Cassette Recorder Combination Units) Vancouver, Washington

An application has been submitted to the Foreign-Trade Zones Board (the Board) by the Port of Tacoma, Washington, grantee of FTZ 86, requesting special-purpose subzone status for the manufacturing and warehousing facilities (9- and 13-inch television/video cassette recorder combination (“TV/VCR”) units) of Matsushita Kotobuki Electronics Industries of America, Inc. (MKA), located at sites in Vancouver, Washington. The application indicates that MKA's Vancouver facilities also produce TV/VCR units in sizes larger than the 9- and 13-inch units, but that the company is not seeking authority to produce the larger sizes under FTZ procedures. The application was submitted pursuant to the Foreign-Trade Zones Act, as amended (19 U.S.C. 81a-81u), and the regulations of the Board (15 CFR part 400). It was formally filed on August 2, 2000.

The MKA facilities are located at four sites in Vancouver, Washington (five buildings and two trailers, 427,300 sq. ft. total): Site #1 (one manufacturing building, one warehouse building and two office trailers/282,800 sq. ft.)—located at 2001 Kotobuki Way; Site #2 (one warehouse building/8,500 sq. ft.)—located across the street from 2001 Kotobuki Way; Site #3 (one warehouse building/108,000 sq. ft.)—located at 3201 Lower Port Road; and Site #4 (one warehouse building/28,000 sq. ft.)—located at 1923 Elevator Way.

The facilities (475 full-time employees and 160-180 contract employees) are used for the assembly and warehousing of MKA's TV/VCR units. Some of the components used in the manufacturing process are purchased from abroad, and account for 72% to 73% of finished product value. The imported components and their duty rates are as follows: 9-inch cathode ray tube (7.5% duty rate); 13-inch cathode ray tube (7.5%); speakers (4.9%); remote control (2.7%); and TV/VCR chassis (duty-free).

Zone procedures would exempt MKA from Customs duty payments on foreign components used in export production. FTZ procedures will help MKA to implement a more efficient and cost-effective system for handling Customs requirements. On its domestic sales, MKA would be able to choose the lower duty rate that applies to the finished products (duty-free) for the foreign components noted above. The company also could benefit from duty savings on scrap and waste resulting from the production process. FTZ status may also make a site eligible for benefits provided under state/local programs. The application indicates that the savings from zone procedures would help improve the facilities' international competitiveness.

In accordance with the Board's regulations, a member of the FTZ Staff has been designated examiner to investigate the application and report to the Board.

Public comment on the application is invited from interested parties. Submissions (original and three copies) shall be addressed to the Board's Executive Secretary at the address below. The closing period for their receipt is October 13, 2000. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period to October 30, 2000.

A copy of the application and the accompanying exhibits will be available for public inspection at each of the following locations:

Office of the Executive Secretary, Foreign-Trade Zones Board, U.S. Department of Commerce, Room 4008, 14th and Pennsylvania Avenue, N.W., Washington, DC 20230.

U.S. Department of Commerce Export Assistance Center, One World Trade Center, 121 SW Salmon Street, Suite 242, Portland, OR 97204.