Which of the following is true of free trade zones (FTZs)?
A. In an FTZ, payment of import duties is postponed until the product leaves the FTZ area and enters the country.
B. FTZs operate throughout the world, replacing imported goods with domestic goods.
C. An FTZ is, in essence, a taxable enclave and considered part of the country as far as import regulations are concerned.
D. An FTZ benefits export companies but does not offer any advantages to an importer.
E. The creation of FTZs typically increases taxes, duties, surcharges, and freight charges on imported goods.
Answer: In an FTZ, payment of import duties is postponed until the product leaves the FTZ area and enters the country.