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Re-exportation, also calledentrepot trade, is a form ofinternational trade in which a countryexports goods which it previouslyimported without altering them. One such example could be when one member of afree trade agreement charges lowertariffs to external nations to win trade, and then re-exports the same product to another partner in the trade agreement, but tariff-free. Re-exportation can be used to avoidsanctions by other nations.
Re-exports consist of foreign goods exported in the same state as previously imported, from the free circulation area, premises for inward processing or industrial free zones, directly to the rest of the world and from premises for customs warehousing or commercial free zones, to the rest of the world.
When dealing with trade data, it is essential to subtract re-exports from normal exports to arrive at the final value of exports. This is necessary because re-exports do not undergo any value-added processes, so cannot be counted towards a nation's exports.
For example, theUnited Arab Emirates may have engaged in re-exportation of goods toIran as a way for Iran to avoid U.S.trade sanctions against it.[1] Thus re-exportation involves export without further processing or transformation of a good that has been imported. In contrast,Finland imported crude oil from theSoviet Union as part of bilateral trade between these two countries and refined the oil for export to other Western European countries but this was not re-exportation because the crude oil was refined before selling.Dubai has emerged as the major re-export center for the entireMiddle East region.