Free trade zones at the beginning of the 21st century

The globalisation of trade has resulted in the enhancement of free and freer trade worldwide. In this context, the free trade movement has always been part of the effort to facilitate competitive and free trade which is one of the principles of the World Trade Organisation. Free trade zones and especially export processing zones can be an appropriate way to attract foreign and domestic investment to export-oriented manufacturing in a geographically limited area and they do so by usually offering a wide range of investment tax incentives. However, many of these incentives fall foul of the provisions of the Agreement on Subsidies and Countervailing Measures. This article analyses to what extent the investment incentives offered in free trade zone programmes are still permissible in terms of these provisions. It also looks at the new trends that are emerging in the free trade zone industry.