Entrepot trade, also known as intermediary trade or re-export trade, refers to import and export transactions not directly carried out between the producing country and the consuming country, but through a third country. This kind of trade is a re-export trade for the transit country.
The country where re-export trade happens is general endowed with two conditions:
① Natural conditions, that is, the port of the transit country must be a deep water port, with a good handling capacity and a convenient geographic location, it is usually situated at the hub of communications or on major international routes.
② Artificial conditions: The transit country tends to implement special preferential tariff policies and trade policies, and it can be a free port or a free trade zone, so that the transfer costs will not be too high. Meanwhile, the infrastructure, transportation, finance, information and other service systems are developed and complete so as to facilitate re-export trade.
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