What does “re-export” in international trade mean? What is the process?
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Entrepot trade, also known as Intermediary Trade or Re-Export Trade, is a special form of international trade. It refers to the sale and purchase of imported and exported goods not directly between the producing country and the consuming country, but through a third country (or region) as a transit station. This form of trade constitutes re-export trade for transit countries.
The definition and characteristics of entrepot trade
The core of re-export trade is that during the import and export process, goods are not shipped directly from the producing country to the consuming country, but are transited through one or more third countries. During this process, the goods can be simply processed in a third country, such as changing packaging, sorting, picking, sorting, etc., but these operations are not considered processing. The ownership of the goods is transferred from the exporter in the producing country to the intermediary in a third country, and from the intermediary to the importer in the consuming country.
Re-export trade has the following characteristics:
1. Cargo distribution and transfer:Entrepot trade countries usually have superior geographical locations, good infrastructure and convenient trade environments, and can serve as distribution centers and warehouses for goods to promote the smooth flow of international trade.
2. Document processing trade:With the development of entrepot trade, document processing trade methods have gradually become mainstream. This method avoids the complicated procedures for customs clearance, import and export of goods in third countries, saves freight, insurance and handling fees, reduces risks, shortens delivery time, and helps importers seize good sales opportunities.
3. Flexible trade forms:Re-export trade can be pure re-export, that is, the goods are re-exported without processing in a third country; it can also be processed re-export, that is, the goods are processed in a third country to add value and then exported.
Types of re-export trade
Depending on whether the goods are processed in the transit place, re-export trade can be divided into two types: pure re-export trade and processing re-export trade.
1. Pure re-export trade:Third-country intermediaries in transit re-export the imported goods without processing. Middlemen can perform operations such as grading, mixing, packaging, and labeling of goods, but these operations do not change the form, nature, structure, or utility of the goods.
2. Processing and re-export trade:After the goods are cleared through customs and imported into the transit country, they are processed and added value before being exported to the importing country. This trade method can not only obtain re-export profits, but also processing profits. Processing and transit trade requires a large labor force, low wage levels, good infrastructure, bonded warehouses or bonded zones in the transit area.
The significance and development of entrepot trade
Re-export trade plays an important role in international trade and is of great significance to transit countries, producing countries and consumer countries.
1. Income from the transit country:Through re-export trade, transit countries can obtain considerable re-export profits and income from warehousing, transportation, loading and unloading, taxation and other income. At the same time, re-export trade also promotes the development of local finance, transportation, telecommunications and other industries.
2. Convenience for producing and consuming countries:Re-export trade provides producing and consuming countries with a broader market and more trade opportunities. Through transshipment in third countries, producing countries can more easily sell products to the global market, while consuming countries can more easily obtain the goods they need.
3. Trade risks and opportunities:Although re-export trade reduces market risks (because most market risks are in foreign sales), it also faces some challenges, such as restrictions on export destinations and international market access supervision. However, with the continuous development of international trade, re-export trade will continue to play an important role in the future, bringing more trade opportunities and benefits to various countries.
The operation process of re-export trade
The operation process of re-export trade usually includes the following steps:
1. Preparing goods and leaving the port:The exporting country prepares the goods and ships them out of the port, and provides relevant information to the transit country.
2. Arrival and declaration of goods:After the goods arrive at the port of the transit country, the transit agent exchanges the order and declares the cargo information to the bonded area or customs.
3. Customs declaration and warehousing:After customs declaration is completed, the goods are transported to a bonded warehouse or designated location for storage.
4. Information modification and inspection and quarantine:Modify cargo information according to customer instructions and conduct inspection and quarantine before shipment.
5. Re-export of goods:After passing inspection and quarantine, transportation will be arranged to the designated location for shipment, and the goods will be re-exported to the consumer country.
As an important form of international trade, re-export trade provides countries with more trade opportunities and benefits with its unique trading methods and flexible operating modes.
