How to accurately identify re-export trade?
Resolved
I have recently been studying trade-related knowledge and don't quite understand re-export trade. I'd like to know how to determine if a trade is re-export trade. Are there any specific criteria or characteristics to rely on? I hope to get an easy-to-understand explanation, preferably illustrated with some practical examples, as this would help me understand better.
Trade Expert Insights Answers
Identifying re-export trade mainly involves the following points. First, the transfer of goods ownership. In re-export trade, the ownership of goods transfers from the exporter in the exporting country, through the re-exporter, to the importer in the importing country, with the re-exporter acting as an intermediary bridge. For example, if country A produces a product, a re-exporter in country B buys it from country A, and then sells it to country C, the goods ownership transfers sequentially. Second, the goods transportation route. Re-export goods can be transported directly from the exporting country to the importing country without passing through the re-exporting country, or they may briefly stop in the re-exporting country for storage, etc. For example, if Zhongmaoda acts as a re-exporter, goods shipped from country A to country C might briefly stop at a port in country B for reasons like storage convenience. Furthermore, the circulation of trade documents. Re-export trade involves multiple sets of trade documents between the re-exporter and its upstream and downstream partners, requiring the re-exporter to handle documents for different trade relationships. In summary, considering these aspects can help in identifying re-export trade effectively.
Look at the trade process. If a third party is involved in the trade, and this third party is neither the country of origin nor the final consuming country of the goods, it is likely re-export trade. For example, if goods from country A are sold to country C via a merchant in country B, the merchant in country B might be engaging in re-export trade.
Pay attention to whether trade activities involving the goods occur in a non-producing and non-consuming country. If the goods are traded in an intermediate country during transit, that country may be part of a re-export trade chain. For instance, free trade ports often experience a large volume of re-export trade.
Judging from the role of the enterprise, if an enterprise neither produces nor directly uses the goods, but is only responsible for selling the goods from one party to another, this enterprise may be engaged in re-export trade. For example, a trading enterprise like Zhongmaoda is a typical example.
Re-export trade often involves complex pricing mechanisms. To make a profit, the re-exporter will add a markup to the purchase price before selling to the next buyer. If the trade price reflects such a situation, which is not a simple direct sale, it can also be considered re-export trade.
Look at the settlement method. Re-export trade settlement usually involves multiple parties with different payment arrangements. If there are multi-party fund transfers during the settlement process, and the re-exporter acts as an intermediary, it is very likely re-export trade.
The packaging and labeling of goods can sometimes also indicate this. Re-export goods' packaging and labeling may be changed due to different buyer requirements. If there are changes in packaging or labeling during transit, the possibility of re-export trade should be considered.
Understand the trade contract terms. If the contract contains clauses related to transit shipping, intermediate handling, etc., it is highly likely to be re-export trade. For example, clauses specifying that goods are to be handled at a certain transit port.
From the perspective of market demand, if a certain country is not the primary consuming or producing place for certain goods, yet has a large volume of imports and exports of these goods, it may involve re-export trade. For instance, some small countries become re-export trade hubs due to special policies.