There are various forms of transit trade, which can be divided into re-export trade and document processing trade according to the different circulation channels of goods:
Re-export Trade method
It refers to the trade mode in which the exporter has a buying and selling relationship with the importer through the middleman, and then the goods are transported directly from the exporting country to the importing country. In this case, the goods are not cleared for import and export in a third country, and the middleman is only involved in the processing of the transaction documents. This type of documentary trade is, in effect, the re-export of ownership of goods. The mode of re-export trade occurs in the early stage of the development of transit trade. Due to the lack of experience and communication equipment, transit trade is completed through the import and export of two goods. With the development of transit trade, the way of document processing trade has gradually developed, which can avoid the complicated formalities of customs clearance of goods in the third country, save costs such as freight, insurance and handling fees, reduce risks, and shorten the delivery time, which is conducive to importers to seize the good opportunity of goods sales, so as to achieve greater profits. Therefore, the way of document processing trade gradually replaces the way of re-export trade and becomes the main way of entrepot trade today.
Transit trade can be divided into pure transit trade and processing transit trade according to whether the goods are processed in the transit place.
① Pure entrepot trade
The so-called pure entrepot trade refers to the re-export of imported goods without processing by middlemen in the third country in transit. Of course, the middleman can grade the imported goods in the local bonded warehouse, mix, add packaging, label and so on. These activities do not change the form, nature, structure or utility of the original imported goods, so they do not fall within the scope of processing.
② Processing entrepot trade
Refers to the trade mode in which goods are imported to the transit country through customs clearance, processed and value-added before being exported to the importing country. Goods undergo a certain degree of processing, so that the processed goods and the original raw goods in the form, nature, structure or utility of certain changes. This way of trade can not only obtain re-export profits, but also obtain processing profits. Processing transit trade requires a large number of labor forces in the transit area, low wage levels, good infrastructure, and bonded warehouses or bonded areas, so as to make the processing cost of goods low, with international competitiveness. Transshipment trade may process and assemble the whole batch of goods; It can also purchase some parts from abroad and assemble them into large equipment for export with the original equipment.
