Handling transshipment trade business, there are doubts about filling in the transshipment country. For example, if goods transit from China to the United States via Singapore, it is unclear whether to write Singapore, and there are concerns about different ways of writing due to trade terms and other factors. The best answer states that the country or region where the goods are actually transshipped and commercial transactions occur is usually filled in. For example, if there are commercial transactions in Singapore in this case, it can be written, and consistency of documents and regulations of various countries should also be noted.
Does entrepot trade include transit trade? Come and find out!
Resolved
Recently, I have been studying international trade related knowledge and am somewhat confused about the concepts of entrept trade and transit trade. I would like to ask everyone, does entrept trade include transit trade? What are the specific differences between them? I feel that these two trade methods can easily be confused in actual business operations, and I hope that professionals can help answer them so that I can clearly distinguish them.
Trade Expert Insights Answers
Entrepôt trade does not include transit trade; they are different trade methods in international trade.
Entrepôt trade refers to the trade of import and export goods in international trade, which is not conducted directly between the producing country and the consuming country, but rather through a third country. This type of trade is entrepôt trade for the transit country. For example, country A produces goods, and country C needs these goods. The goods are first transported to country B, and then country B sells them to country C. Country B is engaged in entrepôt trade, and the traders in country B own the goods.
Transit trade, on the other hand, refers to the trade activities in which export goods from another country pass through a country's territory and are transported to another country without substantial processing or change in the state of the goods, while basically maintaining their original form. For example, goods are transported from country A to country C, passing through country B midway. Country B only provides the transportation channel and does not participate in the sale of the goods, and the ownership of the goods is not transferred to country B. Therefore, they are different concepts and there is no inclusion relationship.
The differences between entrepôt trade and transit trade are obvious. Entrepôt trade involves a change in ownership of goods, and traders make profits from the price difference; transit trade is merely the transportation of goods through a territory, without any change in ownership or sale. Transit fees, such as port fees, are collected. Therefore, entrepôt trade does not include transit trade.
From a tax perspective, the transit country in entrepôt trade may levy import and export tariffs on the goods, as the goods are considered imported and exported in the transit country. In transit trade, the transit country generally only collects a small handling fee and does not impose as many trade taxes as in entrepôt trade, which also indicates the difference between the two. Entrepôt trade does not cover transit trade.
The purpose of traders in entrepôt trade is to profit from reselling goods, and they may carry out certain operations such as storage and sorting of the goods. In transit trade, the transit country basically does not handle the goods, but only provides passage convenience. It is clear that entrepôt trade does not include transit trade.
In entrepôt trade, goods may stay in the transit country for a period of time for trade operations. However, in transit trade, goods stay in the transit country for a short period and are rapidly transshipped. This difference in time characteristics also indicates that entrepôt trade does not include transit trade.
The operational process of entrepôt trade is relatively complex, involving the signing of multiple trade contracts. The process of transit trade is simple, mainly involving transportation arrangements. Thus, it is evident that entrepôt trade does not include transit trade.
Entrepôt trade can transport goods through various means of transportation, and different warehousing locations can be chosen in the transit country. Transit trade relies more on fixed transportation routes and ports, which is also a difference between the two. Entrepôt trade does not include transit trade.
Entrepôt trade focuses on the secondary development of the commercial value of goods, such as repackaging to increase the selling price. Transit trade only ensures the smooth passage of goods. The business focus of the two is different, so entrepôt trade does not include transit trade.
In entrepôt trade, traders bear risks such as the transportation of goods and market fluctuations. In transit trade, the transit country only bears the risk of custody during the short stay of goods. The types and degrees of risk are different, indicating that entrepôt trade does not include transit trade.
From a trade statistics perspective, entrepôt trade is included in the trade volume of the transit country, while transit trade is usually statistically accounted for separately and not included in the trade volume of the transit country. This also shows the difference between the two, and entrepôt trade does not include transit trade.