What are free ports and free zones/special economic zones in general and do they differ today from the ones you examined in your article?
Special economic zones (SEZs) are geographically delimited areas within which states grant private companies exemptions from the tax and administrative regulations that apply to the national territory. In the mid-20th century, these sites were often called export processing zones or free zones, or in the United States, foreign-trade zones. There are thousands of such zones around the world, operating in more than a hundred countries. Data from the International Labour Organisation, now almost 10 years old, suggest that about 65 million people, 70-90% women, are employed in zones, mostly in Asia. We can imagine many classic industries operating in these spaces, such as sweatshops for textiles and electronics, but zones can be found in almost any sector: jewelry, high-tech industries, agriculture, pharmaceuticals, food processing, or simply warehouses where goods are stored. Free ports also exist and have existed in the past in a wide range of forms, from the Italian porto franco to other forms such as colonial entrepots in the Caribbean in the late 18th century. Many iterations are explored in this special issue of Global Intellectual History. Essentially, they were also spaces that had distinct administrative structures for the purpose of facilitating trade.
The free port with which I begin the article, an 1830s plan for Bombay, remained unrealized. By the end of the article, I come to the zones that India implemented in the 1960s-1980s. These zones have been viewed through the standard academic and policy lens as spaces of deterritorialized capital flows, but in reality they were places that neither offered substantial tax breaks (they allowed exports while the rest of India was governed by import substitution policies) nor suspended labor laws (until the 1980s). Moreover, they were designed to attract investment from the Indian diaspora, which used the zone, at least in the case of Kandla Free Trade Zone, to trade with the USSR. This example doesn't really fit with the goals for zones adopted by the UN in the 1970s, nor with the warnings of scholars and activists about zones as sites of exploitation by the global North. To be clear, it's hugely important to study worker exploitation, but I think it's also important to ask what else there is to see here.
In your paper you focused less on the trade relationships at the time and more on the spatial frameworks of port planning. What exactly does that mean?
In my article, I address the problem that policymakers, journalists, and scholars often associate SEZs with the current iteration of the free port. Conversely, some scholars claim that free ports are the SEZs of the past. This is unfounded. But I want to take seriously the question of why this association is so compelling, which means thinking about how these sites and other spaces of exception work, and what policymakers of the past thought about this question.
How does a policy like an SEZ, which on paper includes proposals for types of tax breaks and vague references to goals of increasing exports, become a spatial format informed by ideas about how it should be institutionalized, what economic and political spaces it should connect, what kinds of "flows" (from trade to technology to ideas) it should enable? If many economists agree that zones do not achieve the economic goals for which they are prescribed, why are they still booming? Here I want to look beyond policy, trade, and investment patterns to how policymakers have thought about the zone's place in a larger economic and political framework: connecting networks of ports to each other, or how the zone fits into national or regional policy goals that may have little to do with pure economic prescriptions.
Using Bombay as an example, you analyze the free port and free zone debates of the time. You emphasize the diversity of concepts and policy models that existed in this context. How have these concepts changed over time and what impact have they had on policy decisions?
I think the first thing to recognize is that in the mid-20th century, when policymakers in decolonizing states began to implement zones, there were several models circulating. By the time the UN became a major player in supporting the implementation of zones after the 1970s, they were trying to standardize a much broader practice of carving out certain spaces for trade and investment. We should not underestimate its role in standardizing the policies of existing zones. But other forms have continued to proliferate. I explore in the article how references to these other models also included ideas about how spatial frameworks determine the relevance of particular models, for example, the idea that the port of Bombay should not be compared to free ports in its trade network but only to the incentives and management structure of other Indian ports.
How can the historical developments of free ports and free zones in Bombay offer insights for today's global economy, and are there relevant parallels or adaptations to current trade policies and economic models?
These sites are generally seen in the social sciences as a ubiquitous part of the infrastructure inherent to global capitalism. Or they are remnants of imperial capitalism. Either way, they are designed to displace national sovereignty and are extractive in form to the benefit of corporations in the Global North and at the expense of workers, states, and industries in the Global South. They are part and parcel of the interconnectedness of globalization and its resulting spatial fractures.
Especially since the Covid-19 pandemic, but the discussion began earlier, we've been hearing about deglobalization (both as a reality and as an as yet unrealized goal for securing supply chains), i.e. that supply chains will become shorter and closer to "home". In the United States, this has meant a slight shift from goods produced in China to production in maquiladoras on the U.S.-Mexico border, not a shift away from production in zones.
However, Indian zones also emerged in another context of planned deglobalization of the Indian economy through import substitution to achieve self-sufficiency in national production. Moreover, planners saw the possibility of using spaces of exception to better integrate a fragmented and divided postcolonial state. It's worth taking seriously how historical actors understood the role of free ports and SEZs in these projects to remake societies and their positionality in the world.
Original publication in Global Intellectual History
Megan Maruschke: Spatial Frameworks of Comparison: Planning Western India’s Free Ports and Free Trade Zones, 1830s–1980s. https://doi.org/10.1080/23801883.2023.2280068