Border trade

From Wikipedia, the free encyclopedia

Border trade, in general, refers to the flow of goods and services across the international land borders between countries. In this sense, it is a part of normal trade that flows through standard EXIM frameworks of nations. However, the economic, social and political implications of border trade are far deeper than normal trade that flows through the sea and airports.

Border trade is the increased trade in areas near a national border caused by a price difference, either generally or only for particular products (especially alcohol and tobacco products), in the two countries.

Typical examples of this are the borders between Ukraine and Russia, between Norway and Denmark/Sweden/Finland/Russia, and between Denmark and Germany and between the Northern Ireland and the Republic of Ireland, with the cheaper being petrol in the South and for groceries, furniture and clothing in the North.

The trade across the English Channel, known as the booze cruise is also an example of border trade.

Many American also travel to Canada or Mexico to take advantage of price differences and differing product availability, most notably prescription drugs. However, recently due to the falling dollar, many Canadians are heading to America to pick up bargains.

Many Singaporeans also travel to Johor Bahru in Malaysia or Batam in Indonesia, to take advantage of price differences and differing product availability. The Singaporean government have a law that require a car leaving Singapore to have a fuel tank that is mostly full, to prevent it to be filled with fuel from outside Singapore.

Shenzhen, China, on the border with Hong Kong, also benefits significantly from border trade.