A type of special economic zone in which firms can import inputs duty-free and produce goods mainly for export, usually with simplified customs and tax incentives.
In more detail
Export processing zones spread from Shannon in Ireland (1959) and Kaohsiung in Taiwan (1966) to many developing countries, where they helped build labour-intensive manufacturing in garments and electronics. They have been criticised for weak labour rights, limited links to domestic firms and dependence on tax incentives. Evidence suggests that they work best as part of wider trade reform and near ports and large labour markets.