Entrepot Trade

Hello Anna! This concept of entrepot trade popped up in international market mainly because of higher dependency on transshipment of cargo in Singapore, Hong Kong and Dubai.The external trades of these countries are 90% dependent on transshipment which has played a leading role in their economic boom. Entrepot trade is of the kind of external trade. It is basically a trade in which imported goods are re-exported with or without any additional processing or repackaging. Entrepot is mainly used to refer to duty-free ports with the high volume or re-export trade. At entrepot, goods do not face any import and export duties upon shipment from the port. In simple terms, it can be said that if goods are imported from one country with the purpose of re-exporting to another, it is called Entrepot trade. In this situation the trader becomes the consignee who imports and is also the exporter at the moment of the re-exporting to the third party country where the goods will be ultimately received. For example, if an Indian company imports rubber from Thailand and exports it to Japan then it is called Entrepot trade for India.

Basically, entrepôt trade is the process of re-exporting goods that have been imported into a country without the package having undergone any repackaging or additional processing. When translated, the term means entry port trade, and it avoids the payment of any import or export duties when the package is sent out from that port. In other words, entrepôt trade is a process in which goods are imported in one country with the express purpose of having them end up in a different country. In a case like this, a trader becomes both the importer and the exporter of these goods. For example, if a South African company were to import wool from Australia and export it immediately to Zimbabwe, this would be called entrepôt trade for South Africa.

Good day Anna! Entrepot trade refers to the practice of re-exporting goods with or without processing or re-packaging them again. This type of trade occurs at duty-free ports, where these goods do not have additional import or export duties, or taxes, placed upon them. These ports were particularly important during the period of mercantilism in the Middle Ages and shortly afterward, when they were used to ship goods between Europe and its colonies and outposts in Asia and the Middle East. In mercantilism, a country's government was still the main regulator of the economy, and certain cities were designated as staple ports (which required merchants to unload their goods from ships at that port and trade them within a few days). Traders often did not want to travel along the entire trade route to sell their goods, so they deposited them in entrepots.