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As we are discussing Free Ports: Let me tell you the story of the Hamburg Free Port. Der Hamburger Freihafen. 
Hamburg became a state of the newly founded German Empire in 1871. But it did not become part of the Empire’s customs territory.
In 1881 finally the citizenship of Hamburg signed a treaty with the Empire to join the customs territory. However, a bit of the territory was declared a free port and would not join the customs territory.
As part of that deal Hamburg received 40 million gold marks. It took the money and built the “Speicherstadt”. Pretty, right?
Anway. The treaty came into force in 1888. The Hamburg Free Port was born. And it was rather successful at the time for a couple of industries that took hold there.
EU law did not kill the free port either. The free port became a free zone. But the economics of free ports changed...
The average tariff - at the time the free port had been set up a staggering 30% - was now a mere 3. US post 9/11 security requirements meant that security requirements reduced the “free” in free ports.
Then most of the goods were traded within the EU context, so not subject to even the 3% tariff. hamburg.de/wirtschaft/auf…
And then there was another legal change: EU law does not only allow free zones but also free storage procedures. Here’s the UCC
In short, the Free Port was now more of a hassle: 120 customs officers were busy checking an actual border within the German territory. And they found some fun things...
A min-torpedo with Marihuana (really, guys?) a container with 122000 fake gucci bags from China and (this is fun) - 5000 fake pallets that cannot transport as much as the standard euro-pallets. spiegel.de/wirtschaft/soz…
In short: the economic need for a free port was gone, it was now a location for increased bureaucracy, producing cost and procedures that were less flexible than the ones under the UCC. The citizenship of Hamburg decided to abolish the free port.
But Hamburg alone could no longer do so, it took a federal law. Here it is
On 1 January 2013 the free port was abolished, the inner-German border fell. Of course, at first there was a bit of administrative hassle etc, but one year later the consensus was: it was the right decision...
The most telling statement was from the head of the committee for trade of the chamber of commerce: “... the traffic in the port flows better, there are less customs formalities for goods from the EU, and companies in the port can now act without regard to customs opening hours”
The source for the latter statement is here: hamburg.de/pressearchiv-f…
That’s it folks. Back to our daily lives, which in my case means writing about the WTO crisis. Enjoy!
