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2020/08/26

Understanding of CBT (Cross-Boarder Trade)

CBT exists in countries of borders, act of the buying and selling of goods and services between businesses in neighboring countries. CBT is beneficial for reduction of excise tax by buying consumer products from countries with low regulation of tax.

EU
Europe has many countries; CBT is crucial in EU area. Borders between Ukraine and Russia, between Norway and Denmark/Sweden/Finland/Russia/Estonia, between Denmark/Switzerland and Germany, and between Lituania and Poland benefit from CBT.

For example, the tax on alchohol is very low in Estonia than in FInland and Sweden. It is common to purchase massive alcohol from Estonia when returning to their countries. Other examples are down below in EU.

Lithuania - Poland : Food (Poland is cheaper)
Northern Ireland - Republic of Ireland (Petrol is cheaper in the Republic, where as groceries, furniture and clothing are cheaper than in Northern Ireland.
Netherlands - Belgium, Germany, France: Marijuana trade
U.K - France/Belgium: Brooze cruise (Alcohol, tobacco, etc)

North America
Cross-border trading between three countries in Canada, Mexico, and the United States is robust. The North American Free Trade Agreement (NAFTA) has reduced barriers and tariffs, facilitating cross-border trade. Each day from 2008, $2 billion of cross-border trade was conducted between Canada and the United States alone. However, president Trump has announced a new tariff of 10% on Canadian aluminum to protect American industry. The measure is said to be re-established just a month after the NAFTA came into force, which could worsen relations with Canada. 'Era of Nationalism'

Asia
Singapore has cross-boarder trading with Johor Bahru in Malaysia or Batam in Indonesia, to take advantage of price differences and differing product availability. For example, the Singaporean government has a law that requires a car leaving Singapore to have the fuel tank filled by at least 75 percent, to prevent it from being filled with fuel from outside Singapore.

Shenzhen, on the border of mainland China with the special administrative region of Hong Kong, also benefits from CBT. South Korea also benefits from CBT with China by exporting Korean consumer products such as cosmetics and foods.


Source 1: Border Trade
https://en.wikipedia.org/wiki/Border_trade

Source 2: Trump to Reimpose Aluminum Tariffs on Canada

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