Cross-border trade – what is it?
Cross-border trade is the exchange of goods or services between companies from different countries. It includes both imports and exports, and its purpose is to expand business beyond the domestic market. In practice, it means selling, buying or distributing products between different customs and tax jurisdictions, often using international trade rules (Incoterms).
Frequently Asked Questions (FAQ)
1. What exactly is the difference between cross-border trade and export?
Exports are the sale of goods from one country to another, while cross-border trade includes both exports and imports, as well as other forms of international cooperation (e.g. warehousing, dropshipping, brokerage).
2. What are the major benefits of cross-border trade?
The main advantages are greater market reach, access to cheaper raw materials, increased sales, flexibility of supply, and diversification of risk.
3. What are the challenges of international trade?
The most common difficulties are differences in regulations, exchange rates, customs duties, quality requirements and customs procedures. Logistical planning, knowledge of trade documentation and working with an experienced partner are key.
4. How to reduce currency risk in cross-border trade?
The most common approach is currency hedging, i.e. hedging the value of the transaction through forward contracts or options. This allows you to set a fixed price regardless of exchange rate changes
5. What documents are needed for cross-border trade?
Depending on the commodity, these can be: commercial invoice, packing list, certificate of quality (COA), certificate of origin (COO), transport documents (CMR, AWB), export or sanitary licenses.
