Entrepot trade:

Entrepot trade refers to a type of trade where goods are imported from one country and re-exported to another country without undergoing any significant change in their form or quality. This trade is also known as re-export trade. An entrepot is a place where these goods are stored before being re-exported to their final destination.

Example:

Singapore is a classic example of an entrepot trading hub, where goods from various countries are imported and stored before being re-exported to other countries. For instance, Singapore imports crude oil from the Middle East, refines it and then exports it to other countries. Similarly, it imports various goods such as textiles, electronics, and machinery from China and other Asian countries, stores them, and then re-exports them to other countries.

Advantages of Entrepot Trade:

- Entrepot trade enables countries to take advantage of their strategic geographic location and become a hub for trade between different regions.
- It helps to reduce transportation costs as goods can be consolidated in one place before being re-exported to their final destination.
- It facilitates international trade by providing a platform for countries to import and export goods without having to deal with complex customs procedures and regulations.
- It can also generate employment opportunities in the entrepot location.

Disadvantages of Entrepot Trade:

- It can lead to a lack of diversification in the economy of the entrepot location as it becomes overly dependent on the re-export trade.
- It can also lead to a lack of innovation in the entrepot location as most of the goods are imported and re-exported without undergoing any significant change.
- Entrepot trade can be vulnerable to changes in global trade policies and regulations, which can have a significant impact on the economy of the entrepot location.

Entrêpot 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 entrêpot trade for South Africa.