Re-exportation, also called entrepot trade, is a form of international trade in which a country exports goods which it previously imported without altering them. One such example could be when one member of a free trade agreement charges lower tariffs to external nations to win trade, and then re-exports the same product to another partner in the trade agreement, but tariff-free. Re-exportation can be used to avoid sanctions by other nations.
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👉 Re-exportation in the context of Entrepôt
An entrepôt (English: /ˈɒntrəpoʊ/ ON-trə-poh; French: [ɑ̃tʁəpo] ) is a transshipment port, city, or trading post where merchandise may be imported, stored, or traded, usually to be exported again. Entrepôt also means 'warehouse' in modern French, and is derived from the Latin roots inter 'between' + positum 'position', literally 'that which is placed between'. Typically located on a crossroads, river, canal, or maritime trade route these trade hubs played a critical role in trade during the age of sail. Modern logistics, supply chain networks, and border controls have largely made entrepôts obsolete, or reduced them in number, but the term is still used to refer to duty-free ports or those with a high volume of re-export trade.
Railways, Container Ships, Air-Freight, and Telecommunications have created a world in which commodities and manufactured goods are shifted from one part of the globe to another in regular, controlled, and reliable streams; see Just-in-Time Manufacturing. Eliminating the factors which once made the entrepot phenomenon central to trade networks. But, as pointed out by the Dutch economist T.P. van der Kooy and has been more recently restated by P.W. Klein, before the Industrial Revolution the flow of goods from one part of the world to another, even one region of a country to another, was so irregular and unpredictable that there was no possibility of achieving any sort of steady distribution, any balancing of supply and demand, or any sort of price stability except by stockpiling great reserves of commodities in central storehouses; ie entrepots.
In this Dossier
Re-exportation in the context of Common external tariff
A common external tariff (CET) must be introduced when a group of countries forms a customs union. The same customs duties, import quotas, preferences or other non-tariff barriers to trade apply to all goods entering the area, regardless of which country within the area they are entering. It is designed to end re-exportation; but it may also inhibit imports from countries outside the customs union and thereby diminish consumer choice and support protectionism of industries based within the customs union. The common external tariff is a mild form of economic union but may lead to further types of economic integration. In addition to having the same customs duties, the countries may have other common trade policies, such as having the same quotas, preferences or other non-tariff trade regulations apply to all goods entering the area, regardless of which country, within the area, they are entering.
The main goal of the Custom Unions is to limit external influence, liberalize intra-regional trade, promote economic development and diversification in industrialization in the Community.
Re-exportation in the context of Commerce
Commerce is the organized system of activities, functions, procedures and institutions that directly or indirectly contribute to the smooth, unhindered exchange of goods, services, and other things of value—predominantly through transactional processes—at the right time, place, quantity, quality and price through various channels among the original producers and the final consumers within local, regional, national or international economies. The diversity in the distribution of natural resources, differences of human needs and wants, and division of labour along with comparative advantage are the principal factors that give rise to commercial exchanges.
Commerce consists of trade and aids to trade (i.e. auxiliary commercial services) taking place along the entire supply chain. Trade is the exchange of goods (including raw materials, intermediate and finished goods) and services between buyers and sellers in return for an agreed-upon price at traditional (or online) marketplaces. It is categorized into domestic trade, including retail and wholesale as well as local, regional, inter-regional and international/foreign trade (encompassing import, export and entrepôt/re-export trades). The exchange of currencies (in foreign exchange markets), commodities (in commodity markets/exchanges) and securities and derivatives (in stock exchanges and financial markets) in specialized exchange markets, typically operating under the domain of finance and investment, also falls under the umbrella of trade. On the other hand, auxiliary commercial activities (aids to trade) which can facilitate trade include commercial intermediaries, banking, credit financing and related services, transportation, packaging, warehousing, communication, advertising and insurance. Their purpose is to remove hindrances related to direct personal contact, payments, savings, funding, separation of place and time, product protection and preservation, knowledge and risk.
Re-exportation in the context of List of countries by exports
This list of countries and territories by their exports, including both merchandise exports and service exports, is based on data from the World Bank. Merchandise exports are goods that are produced in one country and sold to another country. Service exports refer to the cross-border sale or supply of services by residents of one country to residents of another country. Some countries have significantly high export figures relative to their economy's size (i.e. Netherlands, Singapore and UAE) due to their high amount of re-exports.