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Benefits from Entrepot Trade

Tobacco and Tobacco Substitutes
From Brazil
To Nigeria
2121 views / 0 experts
Sarah E.
Jun 12, 2020
Who benefits from re-export / entrepot trade?

1 answer

Linda M.
Jun 12, 2020
Hello Sarah! The benefit of the entrepot in the past was that it removed the need for ships to travel the whole distance of the shipping route. The ships would sell their goods to the entrepot and the entrepot would in turn sell them to another ship, removing the large risks associated with long distance travel in the past. It is also valid for our days. --- Still, nowadays, a real benefit from re-exporting is the profit for the trader as he is being relieved out of the import duty, by which the value addition to the cargo will only be permitted on bonded warehouse facilities under the supervision by the customs. Therefore, the real purpose of entrepot is to sale to the other country at higher price than imported from the other country. ---Additionally, the entire country involved in the entrepot trade will benefit from it. This facility in the trading business will open up a huge potential of the country in the global market by trading products of other countries in order to generate more revenue based on external resources of the country and to promote the allied services for employment generation. Entrepot trade will provide the country with a relatively easy method of earning foreign exchange either by value addition or by re-exporting at a higher value.
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