A new non-profit organization with a mandate to implement industry best practices and protect the interests of free zones was officially launched in Dubai on Monday.
The World Free Zones Organization (WFZO), which was registered in Geneva in January this year, will be based in the Dubai Airport Freezone (DAFZ). The independent organization will first be funded by the Dubai government for three years and then will rely upon membership fees and service charges.
“The World Free Zones Organization… will promote a spirit of collaboration, dialogue and guidance. It will provide help to nations that can benefit from the free zone model; whose economies require foreign direct investment in order to build strong, robust and diverse economies for the future,” said Dr. Mohammed Al Zarooni, the director general of DAFZ and chairperson of the WFZO.
The WFZO will allow special economic zones to discuss issues and learn from each other. It aims to protect the interests of free zones, promote higher global standards in zone practices, and implement industry standardization. As part of its human development charter, the WFZO aims to set ethical business standards by attempting to eliminate both slavery and cheap labor from special economic zones. It will also conduct in-depth market analysis in order to assist free zones in becoming more efficient. Moreover, the WFZO will hold annual conventions and lobby governments and international multilateral organizations in order to promote the economic and social advantages of free zones.
Membership of the WFZO is open to all member countries of the United Nations. Although full membership and voting rights is only available to individual free zones and free zone associations, individuals and entities working in free zone environments are also open to join. The 14 founding members, which represent free zone associations and established free zones from across the world, will act as the WFZO’s first full board of directors.
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One of the founding members is the Shanghai Free Trade Zone in China, which was launched on September 29, 2013. Their WFZO representative, Wang Xinling, the vice chairman of the China Shanghai Pilot Free Trade Zone Administration, told Xinhua that the WFZO would provide opportunities for enhanced cooperation and knowledge-sharing with other free zones globally.
The Shanghai FTZ currently covers an area of 29 sq km (11 sq miles) in the city’s Pudong New Area. Plans for the zone were personally endorsed by Premier Li Keqiang, who wanted to encourage investment by financial and service sector companies and learn more about how China can alter its economic structure.
At the launch last year, Commerce Minister Gao Hucheng said that the Shanghai Free-Trade Zone would help to “implement a more active opening-up strategy.” In a bid to promote diversity and competition, restrictions have been eased for foreign companies in 18 sectors within the zone, including finance and shipping. Following the launch of the Shanghai FTZ, the Chinese government approved 12 new FTZs, including Tianjin and Guangdong, in January 2014.
There are currently approximately 3,500 free zones across the world, with around 96,000 firms operating within them.
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