Zones established by many countries in the periphery and semi-periphery offering favorable tax, regulatory, and trade arrangements to attract foreign trade and investment are known as ...

• A. Free Trade Zones
• B. Special Economic Zones
• C. Industrial Parks
• D. Export Processing Zones

Answer: (D)

Export Processing Zones are areas where governments grant incentives such as tax holidays, eased regulations, and streamlined customs to attract foreign investment and promote production for export. In many developing economies these zones near ports or airports become hubs for manufacturing and assembling goods that are shipped abroad, helping integrate the country into global trade networks while creating jobs and technology transfer. This setup is distinct from Free Trade Zones, which focus more on storage and transshipment with minimal duties rather than on export-focused production. Special Economic Zones involve broader policy reforms beyond tax and customs, often targeting both exports and domestic markets, while Industrial Parks emphasize infrastructure and clustering of industries without the explicit export-orientation and trade facilitation seen in EPZs.