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Difficulty: MediumMeaning and Classification of Trade

A commercial firm operating in Kano imports processed cocoa powder from Côte d'Ivoire and subsequently re-exports the goods to Niger Republic without altering or further processing them. Which sub-classification of foreign trade is demonstrated by this transaction?

  1. Entrepôt tradeAnswer
  2. B
    Bilateral commerce
  3. C
    Direct service
  4. D
    Invisible import trade

Answer

Entrepôt trade
The correct response is Entrepôt trade because this specific branch of international trade covers instances where goods are imported into a country not for local consumption, but for re-exportation to another sovereign nation.

Step-by-Step Solution

1
Identify the core activity taking place in the scenario
The firm imports tangible merchandise from Côte d'Ivoire and sells it to another foreign destination (Niger Republic).
Determining whether the transaction involves home trade or foreign trade establishes the main branch of classification.
2
Classify the specific foreign trade activity
The activity of importing goods from one sovereign nation solely to re-export them to another without modifying them is defined as entrepôt trade.
Re-exporting imported goods forms the defining characteristic of entrepôt trade within foreign trade classifications.

Key Concept

Entrepôt trade as a branch of foreign trade
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Topics

Meaning and Classification of Trade

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