Free ports are locations from which goods can be imported
and exported without the exporter or importer having to pay tariffs that are levied on
the same products when they are brought into the nation through other locations. There
is also a reduction in the restrictions that apply for the same products entering or
exiting from elsewhere.
Free ports are created to encourage
foreign trade. Normal tariffs are to be paid only when products leave a free port to the
rest of the nation. An example of the utility of free ports is that they allow
manufacturers to import raw materials, process them and export them without paying
tariffs that make it uneconomical to do the same and organizations would opt for
importing the finished products directly. The creation of free ports is very useful in
encouraging local industries.
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