Is the receipt and payment of entrepot trade really part of goods trade? Come and find out!
I've been studying trade-related knowledge recently and I'm a bit confused about the receipt and payment of entrepot trade. I want to know if the receipt and payment of entrepot trade belong to goods trade? I understand that goods trade generally refers to the import and export of tangible commodities. However, entrepot trade involves complex situations such as the transshipment of goods in a third country. Are its receipt and payment classified differently? Could you please simply and clearly explain the relationship between the two to me?
Professional consultant answers
William YangYears of service：5Customer Rating：5.0
International logistics consultantConsult
The receipt and payment of entrepot trade are usually classified as goods trade in the balance of payments statistics. Entrepot trade means that the country of production and the country of consumption of goods do not directly buy and sell goods, but conduct goods transactions through a third country, and the actual transportation of goods will pass through the third country. Essentially, entrepot trade still revolves around the cross-border movement of goods, so its receipt and payment belong to the category of goods trade.
However, the receipt and payment of entrepot trade also have their particularities. For example, in the receipt and payment process, multiple parties are involved and the cash flow is relatively complex. It may happen that the payment from the buyer is received first and then paid to the seller, and there may be a situation where the middleman earns the price difference. Therefore, the amount of receipt and payment and the actual value of the goods may be different. But these do not affect its classification as goods trade in terms of trade type.
Sarah ZhangYears of service：8Customer Rating：5.0
Document expertConsult
The receipt and payment of entrepot trade belong to goods trade because the ownership of the goods has been transferred, which conforms to the characteristics of goods trade, except that there is an additional transshipment link.
James LiuYears of service：10Customer Rating：5.0
Foreign trade tax refund consultantConsult
From the perspective of the essence of trade, the receipt and payment of entrepot trade are related to goods trade. After all, it is the financial transactions arising from the buying and selling of goods, which is different from the intangible transactions in service trade.
Emily LiuYears of service：10Customer Rating：5.0
Settlement and payment expertConsult
The receipt and payment of entrepot trade are counted as goods trade because there is an actual circulation of goods. Although the route is complex, it is still fundamentally a cross-border transaction of goods.
Jennifer WangYears of service：4Customer Rating：5.0
Market development consultantConsult
It belongs to goods trade. The goods go from the country of production to the country of consumption. Even if they go through transshipment, its receipt and payment are still based on the buying and selling of goods.
Michelle ChenYears of service：3Customer Rating：5.0
Business coordination consultantConsult
The receipt and payment of entrepot trade are goods trade because the whole process revolves around the goods, and the receipt and payment of funds are also generated due to the transactions of goods.
Robert ChenYears of service：6Customer Rating：5.0
Customer service consultantConsult
It belongs to goods trade because there is an actual physical movement and change of ownership of the goods in entrepot trade. The receipt and payment are based on this, so it is classified as goods trade.
Joseph ZhouYears of service：10Customer Rating：5.0
Senior foreign trade managerConsult
The receipt and payment of entrepot trade belong to goods trade. It is based on goods and conforms to the basic definition of goods trade, although the operation is more complex.
David LiYears of service：6Customer Rating：5.0
Senior customs declaration consultantConsult
It is goods trade because the core is the cross-border transaction of goods. The receipt and payment revolve around the goods, so it is classified here.