Recently, at a campaign event in Georgia, Donald Trump revealed his ambitious plan to revive American manufacturing. He suggested creating special zones on federal land with low taxes and relaxed rules. These zones would be perfect for moving entire industries back to the U.S. from other countries. But can this actually work?

What Are Special Economic Zones?

Special economic zones (SEZs) are areas where governments relax certain laws and taxes to attract businesses. Although they may sound new, these zones have existed for a long time. The U.S. has hundreds of them designed to help exporters avoid extra costs, while many other countries use them to lure businesses. For instance, before the North American Free Trade Agreement (NAFTA), Mexico created maquiladoras—factories along the Texas border that could produce goods for export without heavy tariffs.

Even in distant places like Laos, you can find an extreme example of an SEZ: Boten, a town run by a Chinese corporation where the clocks are set to Beijing time!

The Hidden Globe: A New Perspective

These SEZs are explored in a fascinating book titled The Hidden Globe: How Wealth Hacks the World by Atossa Araxia Abrahamian. She investigates how wealthy individuals and companies exploit globalization through these special zones, often escaping local laws.

Abrahamian argues that our traditional view of the world—filled with neatly drawn borders—misses a lot. Many of these zones allow businesses to operate without following a country’s laws. They are often hidden in plain sight, but they form a complicated web of economic opportunities.

A Personal Journey

For Abrahamian, this journey also has a personal touch. She grew up in Geneva, a city known for its international organizations like the United Nations. However, she reveals that beneath its official image, Geneva acts as a “capital of the hidden globe.” The city has a long history of banking secrecy, allowing money from all over the world to disappear into its banks.

Geneva also hosts freeports—places where the wealthy can store valuable items without paying taxes or customs duties. These freeports originally helped merchants in Renaissance Italy store goods in transit, but today, they play a secretive role in the global art trade, allowing the rich to hide away masterpieces.

The Dual Nature of Special Economic Zones

Special economic zones can be seen as the industrial version of freeports. They allow not just storage but also manufacturing without the usual taxes and regulations. These zones became popular in the 1970s as countries looked for ways to attract business in a globalized world. They are often seen as a solution for countries with struggling economies, but there are concerns about their effectiveness.

For example, while zones like those in Mauritius and Shenzhen have been successful, Abrahamian points out that many don’t truly solve the underlying problems in a country’s economy. Instead, they can create “corporate enclaves” that offer little value to the local economy.

Global Examples of SEZs

Around the world, different countries have found unique ways to benefit from these zones. For instance, Dubai has set up an international commercial court to resolve disputes for foreign companies. Other nations, like Liberia and Cyprus, allow ships to register under their flags to bypass labor and environmental laws. Luxembourg is even promoting itself as a safe haven for companies interested in mining asteroids!

Engaging Characters and Complex Narratives

Abrahamian fills her book with interesting characters, like Geneva’s “freeport king,” who made his fortune trading art until he clashed with a powerful Russian client. Through interviews and stories, she presents a lively history of these zones and their impact on globalization.

While she highlights the problems with these special zones, she doesn’t simply condemn them. She believes that, in our global economy, these zones can be necessary for some countries to thrive. However, she is concerned about how globalization allows money to flow freely while keeping people stuck in their countries.

A Cautionary Tale for the Future

Trump’s plan for manufacturing zones could end up mirroring these global patterns. He wants to create high tariffs around the country while setting up manufacturing zones inside, effectively turning the U.S. into a place that resembles developing countries looking to attract business at any cost.

Abrahamian’s book isn’t directly about Trump, but it serves as a warning. As the election approaches, it raises questions about whether these plans will truly benefit American workers or if they will simply repeat mistakes made in other countries.